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Market movers today

In the Euro area, it's quiet on the data front ahead of 'Super Thursday', but markets will stay tuned for any policy hints from ECB President Draghi when he opens a farewell colloquium in honour of the departing Chief Economist Peter Praet at 09:30 CEST.

In the UK, European elections kick off today. Normally, the elections would not be a major market mover but, given Brexit, it is more interesting this time, not least because the Conservative Party is likely to suffer a heavy defeat and Nigel Farage's new Brexit party may be the biggest party of all. In our view, it is likely this would increase pressure on Prime Minister Theresa May to resign. Furthermore, CPI inflation for April is also on the agenda.

In the US, markets will keep an eye on the FOMC minutes from the May meeting set to be released later in the day. As the Fed has clearly communicated that it expects to be on hold for some time, focus will likely be mainly on the reasoning behind the surprise cut in the Interest on Excess Reserves (IOER).

In Scandinavia, the Riksbank will publish the first Financial Stability Report for 2019 (see next page).

Selected market news

Global financial markets are watching every little aspect of the renewed trade dispute between the US and China, which currently shows no sign of ending. Yesterday, US equity markets saw some relief on the back of a decision from the Trump administration to issue a licence that will allow US companies to keep doing business with Huawei for the next three months in a bid to contain the fallout from the export restrictions on the Chinese telecoms equipment maker. However, recovery in Asian equity markets fizzled out following news that the Trump administration is considering curtailing the flow of American technology to China's top makers of surveillance gear.

In the UK, Prime Minister Theresa May yesterday proposed to give Parliament a vote on whether to call another referendum to ratify Britain's divorce from the EU conditional on MPs backing her overall withdrawal bill first. However, the proposal seemed to have little effect in winning over sceptics, with prominent Brexiteers, such as conservative MP Boris Johnson and Labour Party leader Jeremy Corbyn, and May's Northern Irish allies condemning her proposal. Indeed, consensus is increasingly shifting towards a scenario where either Brexiteer Boris Johnson or Labour's Corbyn is set to take the UK through some form of Brexit and both are seen by markets as pound-negative. In reality, we will not have more certainty before May steps down and domestic politics is reshuffled. Either candidate may indeed show to be more pragmatic but for now a bit more pound volatility has been introduced.

For the 24 hours to 23:00 GMT, the EUR slightly declined against the USD and closed at 1.1164.

On the macro front, the Euro-zone's flash consumer confidence index advanced to a 7-month high level of -6.5 in May, surpassing market consensus for a rise to a level of -7.7. The index had recorded a level of -7.9 in the previous month.

In the US, data showed that the existing home sales unexpectedly fell by 0.4% on monthly basis to a level of 5.19 million in April, compared to a level of 5.21 million in the prior month.

Separately, the Organization for Economic Cooperation and Development (OECD), in its latest report, trimmed its global growth forecast for 2019 to 3.2% from 3.3% estimated in March, citing the escalation in trade wars. The global outlook for 2020 was maintained at 3.4%. According to the report, the US economy is forecasted to grow 2.8% in 2019 before slowing to 2.3% in 2020. Growth in euro area is estimated at 1.2% this year and 1.4% for the next year. Moreover, Britain's growth is forecasted to climb 1.2% in 2019 and 1.0% in 2020. Meanwhile, China's growth is expected to ease to 6.2% in 2019 and to 6% in the next year. However, the agency warned that US and China's growth would likely decline to 0.2%-0.3% on an average by 2021 and 2020 if they do not end the tariff war.

In the Asian session, at GMT0300, the pair is trading at 1.1161, with the EUR trading a tad lower against the USD from yesterday's close.

The pair is expected to find support at 1.1139, and a fall through could take it to the next support level of 1.1118. The pair is expected to find its first resistance at 1.1185, and a rise through could take it to the next resistance level of 1.1210.

Going forward, traders would await the European Central Bank President, Mario Draghi's speech, due to release in a few hours. Later in the day, the US FOMC meeting minutes along with the MBA mortgage applications, will keep traders on their toes.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP declined 0.18% against the USD and closed at 1.2704, after Chancellor, Philip Hammond, warned over the potential impact of no-deal Brexit on the economy.

The OECD increased UK's economic growth forecast to 1.2% from 0.8% in 2019, amid delay in Brexit. Additionally, the agency expects Britain's GDP to rise 1.0% in 2020.

In the Asian session, at GMT0300, the pair is trading at 1.2715, with the GBP trading 0.09% higher against the USD from yesterday's close.

The pair is expected to find support at 1.2662, and a fall through could take it to the next support level of 1.2610. The pair is expected to find its first resistance at 1.2790, and a rise through could take it to the next resistance level of 1.2866.

Moving ahead, traders would keep an eye on UK's consumer price index, producer price index, public sector net borrowing and the retail price index, all for April, along with the house price index for March, slated to release in a few hours.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages

For the 24 hours to 23:00 GMT, the USD rose 0.46% against the JPY and closed at 110.56.

The Paris-based international organization (OECD) slashed Japan's growth forecast for 2019 to 0.7% from 0.8% and to 0.6% from 0.7% for 2020, citing effects of declining trade flows in the economy.

In the Asian session, at GMT0300, the pair is trading at 110.55, with the USD trading slightly lower against the JPY from yesterday's close.

Overnight data indicated that Japan's merchandise (total) trade surplus narrowed to ¥60.4 billion, undershooting market expectations for a surplus of ¥232.7 billion. The nation had posted a surplus of ¥528.5 billion in the prior month. Moreover, the nation's machinery orders declined 0.7% on a yearly basis in March, less than market anticipation for a fall of 3.4%. In the previous month, machinery orders had registered a fall of 5.5%.

The pair is expected to find support at 110.19, and a fall through could take it to the next support level of 109.83. The pair is expected to find its first resistance at 110.79, and a rise through could take it to the next resistance level of 111.03.

Looking ahead, traders would keep an eye on Japan's Nikkei manufacturing PMI for May, slated to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.26% against the CHF and closed at 1.0110.

In economic news, Switzerland's M3 money supply climbed 3.5% on an annual basis in April, compared to a revised rise of 3.6% in the prior month. Markets participants had expected M3 money supply to record a rise of 3.8%.

The Organisation for Economic Cooperation and Development (OECD) expects Switzerland's economic growth for 2019 to decrease to 1.0%, compared to 2.5% in 2018. However, it expects economic growth in 2020 to improve to 1.5%.

In the Asian session, at GMT0300, the pair is trading at 1.0116, with the USD trading 0.06% higher against the CHF from yesterday's close.

The pair is expected to find support at 1.0097, and a fall through could take it to the next support level of 1.0079. The pair is expected to find its first resistance at 1.0127, and a rise through could take it to the next resistance level of 1.0139.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.20% against the CAD and closed at 1.3402.

In the Asian session, at GMT0300, the pair is trading at 1.3402, with the USD trading flat against the CAD from yesterday’s close.

The pair is expected to find support at 1.3387, and a fall through could take it to the next support level of 1.3371. The pair is expected to find its first resistance at 1.3426, and a rise through could take it to the next resistance level of 1.3449.

Trading trend in the Loonie today, is expected to be determined by Canada’s retail sales for March, set to release later in the day.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the AUD declined 0.35% against the USD and closed at 0.6886.

LME Copper prices rose 0.3% or $19.0/MT to $6004.0/MT. Aluminium prices declined 1.1% or $20.0/MT to $1766.0/MT.

In the Asian session, at GMT0300, the pair is trading at 0.6880, with the AUD trading 0.09% lower against the USD from yesterday’s close.

Overnight data showed that Australia’s Westpac leading index declined 0.09% on a monthly basis in April, compared to a revised rise of 0.28% in the prior month.

The pair is expected to find support at 0.6859, and a fall through could take it to the next support level of 0.6837. The pair is expected to find its first resistance at 0.6909, and a rise through could take it to the next resistance level of 0.6937.

Looking forward, traders would closely monitor Australia’s CBA manufacturing and services PMI for May, scheduled to release overnight.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Gold declined 0.21% against the USD and closed at USD1274.40 per ounce, amid broad strength in the US dollar.

In the Asian session, at GMT0300, the pair is trading at 1273.10, with gold trading 0.10% lower against the USD from yesterday’s close.

The pair is expected to find support at 1269.23, and a fall through could take it to the next support level of 1265.37. The pair is expected to find its first resistance at 1276.73, and a rise through could take it to the next resistance level of 1280.37.

The yellow metal is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Silver marginally declined against the USD and closed at USD14.44 per ounce, tracking losses in gold prices.

In the Asian session, at GMT0300, the pair is trading at 14.42, with silver trading 0.14% lower against the USD from yesterday’s close.

The pair is expected to find support at 14.36, and a fall through could take it to the next support level of 14.31. The pair is expected to find its first resistance at 14.46, and a rise through could take it to the next resistance level of 14.51.

The white metal is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Crude Oil declined 0.57% against the USD and closed at USD62.94 per barrel, after the American Petroleum Institute (API) reported that US crude oil inventories advanced 2.4 million barrels to 480.2 million barrels in the week ended 17 May 2019.

In the Asian session, at GMT0300, the pair is trading at 62.60, with oil trading 0.54% lower against the USD from yesterday's close.

The pair is expected to find support at 62.15, and a fall through could take it to the next support level of 61.69. The pair is expected to find its first resistance at 63.42, and a rise through could take it to the next resistance level of 64.23.

Crude oil is trading below its 20 Hr and 50 Hr moving averages.