Sample Category Title

• Euro strengthens on French election result
• Sterling remains strong as Gross Domestic Product (GDP) data awaited
• USD slips on softer data

The political establishment has been shunned in favour of a far-right woman and a party that only came into existence a year ago, with a leader who married his school teacher. Emmanuel Macron was ahead by a couple of percentage points from Marine Le Pen as the pair swung through into the second round. Those who know more than I do about French politics seem to believe Macron will take the Presidency but those in the know also told us that Trump would fail and 'Remain' would win the Brexit vote. We shall see. For now though, the Euro has gained a cent or so against most other currencies but was less successful against the emboldened Sterling.

For its part, the Pound had a very positive week last week. The calling of a UK election, which should favour the incumbent has boosted the Pound. Both ICM and Yougov polls suggest a solid majority for the Conservatives. UK data has done its part to assist the Sterling strength. This week brings an expected rise in UK economic growth data and perhaps more clarity on the Budget when Philip Hammond testifies to the Treasury Select Committee, potentially offering more insight into the strength of the UK economy.

The US Dollar, on the other hand, had a poor week. Weak retail sales and softer inflation, plus hints that tax reform plans could be delayed, all weighed on the USD. This week will bring further news on those tax reforms and perhaps developments on the replacement for Obamacare. All will influence the USD, as will an expected slip in US GDP data and a forecast dip in US Consumer Confidence. If the forecasters have got their sums right, there may be further weakness in the USD this week.

As well as the UK and US GDP data, we'll also get Canadian economic growth figures and the forecasts are mixed. The Canadian Dollar, which has slipped with its US counterpart, has some volatile trading due this week as those numbers emerge.

This week will include New Zealand's trade balance. Last month's data was wildly at odds with forecasts and quite negative. There is a belief that this month's figures will be an improvement and may even offer up a trade surplus. The Kiwi Dollar will be heavily influenced by that news.

And 'those things will kill you' was a standard expression for anyone who didn't smoke as they attempted to stop their friends from doing so. Now e-cigarettes are under the spotlight. One 'vaper' felt his e-cigarette getting hot in his pocket and when he removed it and threw it across the room, it exploded, punching a hole in his wall. And researchers at Johns Hopkins University believe the new devices are as damaging to health as tobacco. Apparently those things'll kill you in new ways.

Car humour

• Apparently I snore so loudly that it wakes my passengers.
• My son had his driving test the other day. He got 4 out of 5. The other chap managed to leap clear.
• Isn't it strange how you can feel reassured by seeing policemen walking the street, but paranoid when they are behind you in a car.
• He died doing the two things he loved most; checking Facebook while driving.

The first round of the French Presidential election produced one of the most market-friendly outcomes with centrist Emmanuel Macron leading against the right wing Marine Le Pen.

The margin – Macron +23.75%, Le Pen +21.53% – suggests that he is the heavy favorite against the anti-euro Le Pen in round two on May 7.

This week, the BoJ and the ECB meet and neither is expected to change its monetary policy. The ECB will do little if anything given the easing of inflation last month along with the considerable risks of the French elections.

The BoJ's Governor Kuroda has already indicated on the weekend that stimulus is here to stay for sometime and given the yen's (¥110.00) recent strength, they cannot afford to discuss changes.

Also, in Europe, Q1 growth data will be released in the U.K and France, while Japan will release its slew of end-of-month numbers. In Australia, dealers get to pick apart the important quarterly CPI data.

The geopolitical focus again turns to the Korean peninsula with more saber rattling by the North.

Stateside, investors are also watching Washington this week, as Congress and White House standoff on funding for a southern border is expected to come to a head.

On Friday, U.S GDP is due and the economy is expected to expand at a +1.5% annualized rate in Q1 – the weakest pace in 12-months.

1. Chinese stocks buck the trend

Trading in Shanghai spoiled the global markets celebration of Macron's first round French presidential victory.

The selloff in Chinese equities deepened overnight as concern grows that authorities will step up measures to crack down on leveraged trading.

The Shanghai Composite dropped -1.4% to the lowest since Jan., after the index tumbled -2.3% last week.

In contrast, in Hong Kong, the Hang Seng increased +0.4% and the Hang Seng China Enterprises Index rallied +0.5%.

In Japan, the broad based Topix increased another +1%, after last week's first weekly advance in more than a month.

The “feel good” factor has volatility measures slumping – the gauge for the Eurostoxx plunged -29%, while the measure for the Nikkei 225 Stock Average lost -17%, the most in six-months.

In Europe, equity indices are trading sharply higher as risk-on prevails after Macron's first round win and German sentiment data (see below). Banking stocks are supporting the Eurostoxx and French banks have pushed the CAC 40 to outperform. Energy, commodity and mining stocks are also trading higher and supporting the FTSE 100.

U.S stocks are set to open in the 'black' (+1.1%).

Indices: Stoxx50 +3.9% at 3,579, FTSE +1.9% at 7,246, DAX +2.9% at 12,394, CAC-40 +4.6% at 5,292, IBEX-35 +3.4% at 10,730, FTSE MIB +4.0% at 20,530, SMI +1.5% at 8,684, S&P 500 Futures +1.1%.

2. Oil recovers lost ground, but market remains under pressure, gold lower

Following last week's big losses, oil prices have recovered some lost ground overnight, driven by expectations that OPEC will extend a pledge to cut output to cover all of this year. However, a relentless rise in U.S drilling is expected to cap most market gains.

Brent crude futures have rallied +35c, or +0.67%, to +$52.31 per barrel, while U.S West Texas Intermediate (WTI) crude added +32c, or +0.64% to remain trading below the psychological +$50 handle at +$49.84 a barrel.

Oil prices fell steeply last week on the back of stubbornly high crude supplies, despite a pledge by OPEC to cut production by almost -1.8m bpd for six-months from Jan. 1.

Note: On the weekend, a panel made up of OPEC and other producers has recommended an extension of output cuts by another six-months from June.

Capping market gains are being capped by U.S drillers who added more rigs' for a 14th consecutive week last week, to 688 rigs.

Note: Both the Brent and WTI oil benchmarks are down more than -7.5% since Dec. 31, 2016.

Gold has fallen after the French election result revives 'risk-on' sentiment. The precious metal is down over -1% at +$1,270.80 per ounce, after falling to a near two-week low of +$1,265.90 earlier.

3. Yields soar after French result

A percentage of the risk premium that has been priced into the fixed income market this year has been taken off ahead of the U.S open as Macron won the first round voting in the French presidential election and solidified his prospects of becoming the country's next leader.

German benchmark yields rose +9 bps and those in the U.K added +6 bps, while the yield on French 10-year notes dropped -11 bps to yield +0.83%, the lowest level since mid-Jan.

The spread between 10-year French OAT's and German bunds narrowed -20 bps to +49 bps.

Elsewhere, U.S 10-year yields have rallied +5 bps to +2.30%, while similar Aussie maturities yields jumped +6 bps to +2.60%.

4. EUR supported after Macron win

With the French election first hurdle cleared, risks to the EUR (€1.0867) might move to the upside. The “bulls” believe that EUR needs to overcome last night's high area (€1.0933) to improve the medium term outlook, otherwise the pair will likely be stuck in a range until the round two results are known.

U.S fiscal policy is also expected to limit the EUR's upside in the short-term, so don't be surprised many to fall into a 'buy-the-dip' strategy with the potential to rise towards €1.12 or €1.13 into June assuming a Macron French Presidential win.

Elsewhere, USD/JPY has also benefitted from the risk-on environment to hold above the ¥110.00 level ahead of the U.S open.

5. German Ifo sentiment rises

Data this morning shows that German business sentiment has picked up further in April, beating forecasts in a sign that Europe's largest economy “is growing strongly.

The Ifo business climate index rose to 112.9 points from 112.4 points in Mar. – the highest level in six-years.

Digging deeper, the monthly survey showed that businesses were upbeat about their current situation, but slightly trimmed their six-month outlook. The mood among German construction companies has hit a record-high.

Note: Europe's largest economy is forecast to expand around +1.5% this year and +1.8% in 2018.

Financial markets received a solid boost during early trading on Monday, after Centrist Emmanuel Macron secured a position in the second round of the French presidential elections. With Macron's market-friendly, first round victory dissolving some risks associated around a potential anti-establishment shocker, the Euro lurched to fresh five-month highs above 1.0930. Although this risk-on sentiment could support the Euro in the short term, upside gains may face obstacles if uncertainty starts to mount once again ahead of the second round of voting on 7 May. While expectations remain somewhat elevated over Macron becoming the next French President, the live threat of an unexpected Trump-style victory by Marine Le Pen could still expose the Euro to downside shocks.

From a technical standpoint, although the sharp appreciation on the EURUSD has made prices bullish on the daily charts, questions should be asked about the longevity of the current rally. Bulls need to secure a daily close above 1.0900 to open a path towards 1.1000. In an alternative scenario, weakness below 1.0800 could open a path towards 1.0750 and lower.

Greenback stumbles into new week

The Dollar Index found itself pressured below 100.00 last week, after the combination of soft economic data and fading rate hike expectations enticed sellers to attack. Although U.S President Donald Trump has announced that a big tax reform and tax reduction will be announced this Wednesday, markets have received this news with a big pinch of salt. The skepticism over Trump's ability to deliver is becoming quite visible and the growing threat of fiscal spending falling short of expectations may potentially punish the Dollar further. From a technical standpoint, prices have commenced the trading week under renewed pressure and a break below 98.80 could open a path lower towards 98.50.

Stock markets uplifted by Macron

Global stocks were mostly higher during Monday's trading session, as participants mulled over the market-friendly outcome of the first round of the French Presidential elections. With Macron's impressive performance and victory in the first round easing some Frexit-related concerns, stocks in Asia and Europe marched into gains. The newly found appetite for risk should support Wall Street this afternoon. While stock markets have the ability to edge higher in the short term as a result of this relief, potential anxiety ahead of the second round of voting and ongoing Trump uncertainties still have the ability to limit gains.

Commodity spotlight – Gold

The renewed appetite for riskier assets has reduced Gold's glimmer on Monday, with the metal trading around $1270 as of writing. While the current risk-on environment has the ability to expose the yellow metal to further losses, bulls remain in control above $1260. With uncertainty likely to heighten ahead of the second round of the French elections in the coming fortnight and Brexit developments weighing on sentiment, bulls still have a chance to send prices higher. From a technical standpoint, the candlesticks are still trading within the daily bullish channel while the MACD points to the upside. A break back above $1280 could open a path higher towards $1280. A daily close below $1260 invalidates this daily bullish setup.

EUR/USD has rebounded since April 11, as a result of the weakening of the dollar.

The outcome of the first-round voting of the French presidential election was revealed on Sunday night April 23.

As consensus, the top two candidates: the independent centrist Macron and the far-right wing Le Pen, won 23.7% and 21.7% of votes respectively. They will the second-round of voting on May 7.

As Macron got the first place, surpassing Le Pen with 2% of votes, market concerns over the EU’s collapse after Le Pen’s presidency has been eased to an extent.

Markets’ confidence on Macron’s victory in the second-round has also been lifted.

The outcome of the first-round voting pushed the Euro up.

EUR/USD soared and broke the resistance level at 1.0800, hitting the highest level of 1.0918 since November 11 on Sunday night.

However, the price retraced afterwards, as the pressure at the 1.0900 resistance level is heavy.

The price has been consolidating during early European session.

The 4-hourly and the daily Stochastic Oscillator readings are both above 70, be aware of a correction prior to the next rally.

The resistance level is at 1.0880, followed by 1.0900 and 1.0920.

The support line is at 1.0835, followed by 1.0820 and 1.0800.

USD/JPY - 110.20

USD/JPY – Wave V of larger degree circle V has possibly ended at 75.31 and major correction has commenced and already met indicated target at 125.00.

Although the greenback opened higher today and jumped to 110.60, dollar’s broad-based weakness suggests upside would be limited and bring retreat later, below 109.85-90 would bring test of previous resistance at 109.49, however, a daily close below there is needed to suggest top is possibly formed, bring weakness to 108.88 but 108.40-45 would hold from here. Below 108.40-45 would bring retest of 108.13 but only break there would confirm early decline from 118.66 top has resumed and extend further fall to 107.85-90 (61.8% Fibonacci retracement of 101.19-118.66), then towards 107.10-20 but reckon 106.75-80 (1.236 times projection of 118.66-111.59 measuring from 115.51) would limit downside and 106.00 should hold, bring rebound later.

Our preferred count is that, triangle wave IV (with circle) ended at 101.45 and the circle wave V brought dollar down to the record low of 75.31 in 2011 and the subsequent rebound signal major correction has commenced with A leg ended at 84.19, followed by wave B at 77.14 and impulsive wave C is now unfolding (indicated upside target at 125.00 had been met) for gain towards 127.00 level. In the event dollar drops below support at 99.01, this would confirm medium term decline from 125.86 top (2015 high) has resumed for subsequent weakness to 98.00 and possibly 97.00.

Under this count, this wave C is unfolding as impulsive waves with (1) (2), 1 2 ended at 80.67, 79.07, 82.84 and 81.69 respectively, hence the extended wave 3 has ended at 103.74 and wave 4 correction of recent upmove should bring weakness to 92.57, then towards 90.88 but psychological support at 90.00 should limit downside and bring another rally later in wave 5, indicated target at 125.00 had been met and gain to 127.00 cannot be ruled out but reckon price would falter below 130.00.

On the upside, above 110.60 would extend the rebound from 108.13 to 111.00 but only a daily close above resistance at 111.58 would signal a temporary low has been formed at 108.13 instead, bring a stronger rebound to resistance at 112.20 first.

Recommendation: Hold short entered at 110.60 for 108.60 with stop above 110.60.

On the monthly chart, we have changed our preferred count that an impulsive wave is unfolding with major wave III with circle ended at 79.75, then followed by wave IV with circle and is labeled as a triangle with A: 147.64 (11 August, 1998), B: 101.25, C: 135.20, D: 101.67 and E leg ended at 124.14 to end the wave IV with circle. Hence, wave V with circle commenced from there and hit a record low of 75.31, however, the subsequent strong rebound signals this circle wave V has possibly ended there, hence gain to (indicated upside target at 122.00 and 125.00 had been met), the retreat from 125.86 suggests wave A of major correction has ended there and wave B correction back to 99.00, then 95.00 would be seen, however, reckon downside would be limited to 90.00, bring another rebound in wave C next year.

The DAX has posted strong gains on the weekend, boosted by the results of the French presidential election. which showed Emmanuel Lacron and Marine Le Pen advancing to the second round. The DAX is currently trading at 12,398.50, up 2.9 percent since the Friday close. There was more positive news as German Ifo Business Climate improved to 112.9, beating the forecast of 112.4 points.

German business confidence levels continue to improve as Ifo Business Climate climbed to 112.9 in April, up for 112.3 a month earlier. This was its highest level since July 2011. This excellent reading underscores a strong German economy, which has been the locomotive pulling the eurozone, which as showed stronger growth in the first quarter. Germany releases consumer confidence and Preliminary CPI on Thursday.

Nervous stock markets eyed the Sunday French election with bated breath, but investors cheered the results, pushing the euro and European stock markets over the weekend. The best news was what didn’t happen in the first round, as the nightmarish scenario of a runoff between Le Pen and far-Left candidate Jean-Luc Mélenchon was averted. The first round featured 11 candidates, and the election whittled the field down to just 2 candidates – centrist Emmanuel Lacron and far-right Marie Le Pen. Lacron garnered 24% of the vote and Le Pen 22%, which was what most polls leading up to the election predicted. The runoff vote takes place on May 7 and French voters will have a clear choice between Lacron, who served as an economic minister, and Le Pen, who is running on an anti-EU platform. We can expect daily opinion polls to be market-movers, as was the case before the first round. Lacron goes into next week’s vote as a heavy favorite, and two candidates in the first round have thrown their support behind Lacron – center right François Fillon and Socialist Benoit Hamon.

What’s next for the Federal Reserve? The Fed has broadly hinted that it will gradually raise rates in 2017, but it’s unclear how many times Janet Yellen will press the rate trigger. Most analysts are expecting two more moves this year, but there have been calls from some Fed policymakers for three more hikes. However, soft retail sales and CPI numbers in March have made the Fed more dovish, and on Tuesday, the Atlanta and New York Federal Reserve lowered their outlook for US economic growth for the first quarter. The Fed can point to a labor market that is close to capacity as well as strong consumer confidence, but surprisingly, this has not translated into stronger consumer spending, a key driver of economic growth. Will the Fed raise rates in June? The CME Group shows the odds of a June hike have dropped to 50%, compared to 64% earlier in April.

Mid-Market Update: Relief rally as Macron won the 1st round voting in the French presidential election and solidified his prospects of becoming the country's next leader

Notes/Observations

France Presidential election moves to the 2nd round with Macron (Centrist) faces Le Pen (Far Right) settting the stage for a runoff that would pit Globalism vs. Nationalism

Relief rally underway as Macron solidified his prospects of becoming the country's next leader

German Apr IFO Business Climate Survey beats expectations to highest level since summer 2011 (112.9 v 112.4e)

Overnight/Weekend:

France Election Results:

Macron 23.75%; Le Pen 21.53% (both move onto 2nd round that held on Sunday, May 7th)

Macron:

Will seek to build Parliament majority as soon as Monday (Apr 24th)

Wants to relaunch European project and break with a system unable to address France's problems

Have changed French politics over the course of one year

Le Pen:

Election result is historical

Time to free French people from the arrogant elite

Calls on all patriots to back her as survival of France is at stake

Fillon:

Conceded defeat

Will vote for Macron and Le Pen would lead to failure of France

Melenchon:

Will not endorse any candidate for 2nd round

Asia:

PBOC Gov Zhou: China's 2017 GDP target is "within reach"; Financial risks were under control. Reiterated PBoC to keep pursuing a prudent and neutral monetary policy.

China Fin Min Xiao Jie: confident in reaching GDP target as global economic recovery and market sentiment were improving

China President Xi reiterates his call on all sides to exercise restraint on North Korea during a recent phone conversation with President Trump. Hoped all sides avoid doing anything to worsen tense situation on Korean peninsula

Japan Fin MIn Aso: Trade imbalances could not be fixed through FX adjustments alone. Unclear what immediate results would be from US/Japan dialogue talks, possible some results on energy and train infrastructure but no guarantees for US in any bilateral deal with Japan

Europe:

ECB's Nowotny (Austria): Any change to policy will be considered in H2. Have decided on its interest rate and bond purchases for the remainder of the year; Any changes to its policy path beyond 2017 will be considered in H2

EU to tighten guidance on Brexit bill, guidelines expected to be finalized during week of Apr 24th

IMF Members Steering Committee Statement said to exclude anti-protectionism pledge, adopted G20 language on trade. Members pledged to refrain from competitive devaluations; would not target exchange rates for competitive purposes

Germany Fin Min Schaeuble: board consensus has not changed at G20 meeting in Washington

Greece Fin Min Tsakalotossaid to be aiming for Eurogroup Finance Ministers to sign off on staff-level agreement of 2nd review of current bailout program at upcoming May 22 meeting - Fitch cuts Italy sovereign rating one notch to BBB from BBB+; outlook Stable from Negative; cites fiscal slippage and weak bank sector

Americas:

Office Management & Budget (OMB) Director Mulvaney: a short-term stopgap funding bill is more likely than a govt shutdown. White House will offer specific governing principles for its tax plans this week together with indications of what new rates would be but complete proposal won't be ready till June

Energy:

Weekly Baker Hughes US Rig Count: 857 v 847 w/w (+1.2%) (14th straight weekly rise)

Economic Data

(SG) Singapore Mar CPI M/M: 0.0% v 0.0%e; Y/Y: 0.7% v 0.7%e; CPI Core Y/Y: 1.2% v 1.2%e

(CZ) Czech Apr Business Confidence: 14.3 v 13.1 prior; Consumer Confidence: 6.0 v 6.3 prior

(TW) Taiwan Mar Industrial Production Y/Y: 3.2% v 6.0%e

(DE) Germany Apr IFO Business Climate: 112.9 v 112.4e (highest since July 2011); Current Assessment: 121.1 v 119.2, Expectations Survey: 105.2 v 105.9e

Fixed Income Issuance:

(PH) Philippines sold total PHP15B vs. PHP 15B indicated in 3-month, 6-month and 12-month Bills

(KR) South Korea Central Bank sold KRW900B v KRW 900B indicated in 3-month Monetary Stabilization Bonds (SMB); Avg yield: 1.34% v 1.34% prior

(NO) Norway sold NOK3.0B vs. NOK3.0B indicated in 6-month Bills;Avg Yield: 0.47% v 0.50% prior; Bid-to-cover: 3.55x v 2.15x prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Index snapshot (as of 10:00 GMT)

Indices [Stoxx50 +3.9% at 3,579, FTSE +1.9% at 7,246, DAX +2.9% at 12,394, CAC-40 +4.6% at 5,292, IBEX-35 +3.4% at 10,730, FTSE MIB +4.0% at 20,530, SMI +1.5% at 8,684, S&P 500 Futures +1.1%]

Market Focal Points/Key Themes: European equity indices are trading sharply higher as risk-on prevails after the first round of French elections showed Macron the front runner to be the next French President; Banking stocks trading sharply higher as a result with French banks SocGen and BNP Paribas leading the gains in large volume in the Eurostoxx; CAC 40 outperforming the board as a result; shares of LafargeHolcim the one notable laggard in the index after announcing executive changes; Banking shares Barclays and Standard Chartered leading the gains in the FTSE 100; energy, commodity and mining stocks also trading higher as copper and oil prices trade higher intraday; German IFO results beating consensus expectations adding to risk-on sentiment.

Upcoming scheduled US earnings (pre-market) include Halliburton, Hasbro, Illinois Tool Works, Kimberly-Clark, Lennox International, Nustar Energy, Precision Drilling, and TCF Financial.

Equities (as of 09:50 GMT)

Consumer Discretionary: [Jimmy Choo CHOO.UK +9.8% (to conduct review of strategic alternatives)]

Financials: [Kennedy Wilson Europe Real Estate KWE.UK +13.8% (Agrees on recommended all-share combination transaction with Kennedy-Wilson Holdings)]

Healthcare: [Koninklijke Philips PHIA.NL +3.2% (Q1 results), UCB UCB.BE -2.9% (Q1 sales)]

Industrials: [Anglo American AAL.UK +1.9% (Q1 production), Syngenta SYNN.CH +0.7% (Q1 sales)]

Materials: [LafargeHolcim LHN.CH -0.6% (confirms executive changes)]

Technology: [Computacenter CCC.UK +7.5% (Q1 sales), First Derivatives FDP.UK +1.8% (trading update)]

Telecom: [Tele2 TEL2B.SE +7.1% (Q1 results)]

Speakers

BoE's Hogg will leave central bank at end of week

German IFO Economists noted that the domestic economy was growing strongly. Brexit was not an issue pre-occupying German business at this time. Dip in Expectation Survey mainly due to industrial sector but did not signify change in sentiment in overall economy

Turkey Econ Min Zeybekci noted there were no expectations of Cabinet changes in the short term. GDP must growth at 4.5% to keep unemployment rate constant

Russia 1st Dep PM Shuvalov: Any decisions on taxes will not go into effect before 2019

Currencies

Risk appetite was the session's theme as there were no surprises in the French 1st round Presidential election. Centrist Emmanuel Macron and far-right politician Marine Le Pen now move on to a May 7th run-off vote that pits Globalism vs. Nationalism. Macron thus solidified his prospects of becoming the country's next leader. Macron has led in poll by approx. 20 points in recent weeks and thus offered encouragement for the EU

The EUR/USD surged to a 5-month high during Asia to test 1.0933 as the French Presidential results likely produced the most market-friendly outcome,. Euro zone money markets saw more chance of ECB hike in early 2018 after French vote

USD/JPY benefitted from the risk-on environment to hold abovce the 110 level in the session

Fixed Income

Bund futures trade at 161.20 down 156 ticks falling sharply following the French election results which provided no surprises as well as strong IFO readings out of Germany. A break of 160.93 lows targets 160.72 followed by 160.15. Resistance moves to 162.52 gap fill followed by 162.94.

Gilt futures trade at 127.83 down 91 ticks falling on risk on flows with continued downside targeting 127.70. A reversal eyes 128.81 followed by 129.14. Short Sterling futures trade down 1 to 4bp across the curve in steepening trade with Jun17Jun18 steepening 3bp to 12.5/13bp.

Monday's liquidity report showed Friday's excess liquidity fell to €1.561T a fall of €7B from €1.568T prior. Use of the marginal lending facility fell to €218M from €223M prior.

Corporate issuance saw no activity on Friday rounding the week off with $23.78B coming to market. Issuance is expected to pick up as earnings ramp up during the week. In Euro denominated issuance last week saw €6.2B come to market in the 2nd lowest issuance week so far this year. For the year issuance broke the €500B mark, slightly ahead of last year. For the week ahead issuance is forecasted between €10-15B.

Looking Ahead

(DE) Germany Fin Min Schaeuble speaks at Hospitality Lobby Event, Stuttgart

(DE) German Chancellor Merkel and Ivanka Trump attend G-20 Women's Summit in Berlin

05:30 (BE) Belgium Debt Agency (BDA) to sell €1.8-2.5B in 2023 and 2027 OLO Bonds

06:00 (UK) Apr CBI Industrial Trends Total Orders: 6e v 8 prior, Selling Prices: 27e v 29 prior, Business Optimism: 12e v 15 prior

06:00 (IL) Israel to sell 2019, 2020, 2021 2025, 2027 and 2047 bonds

06:45 (US) Daily Libor Fixing - 07:00 (PT) Portugal Feb Current Account: No est v €0.0B prior

07:00 (IN) India announces details of upcoming bond sale (held on Fridays)

07:25 (BR) Brazil Central Bank Weekly Economists Survey

07:30 (TR) Turkey Apr Real Sector Confidence (Seasonally adj): No est v 106.7 prior; Real Sector Confidence (unadj): No est v 108.1 prior

07:30 (TR) Turkey Apr Capacity Utilization: No est v 74.9% prior

08:00 (CL) Chile Mar PPI M/M: No est v -0.3% prior - 08:15 (UK) Baltic Dry Bulk Index

08:30 (US) Mar Chicago Fed National Activity Index: 0.50e v 0.34 prior

08:30 (CA) Canada Feb Wholesale Trade Sales M/M: -1.0%e v 3.3% prior

08:50 (FR) France Debt Agency (AFT) to sell combined €4.8-6.0B in 3-month, 6-month and 12-month BTF Bills

09:00 (CN) China Mar Conference Board Leading Economic Index: No est v 1.2 prior

09:00 (MX) Mexico Feb IGAE Economic Activity Index (Monthly GDP) Y/Y: 1.1%e v 3.0% prior

09:30 (EU) ECB announces Covered-Bond Purchases

09:35 (EU) ECB calls for bids in 7-Day Main Refinancing Tender

10:30 (US) Apr Dallas Fed Manufacturing Activity: 17.0e v 16.9 prior

11:30 (US) Treasury to sell 3-Month and 6-month Bills

11:30 (US) Fed's Kashkari (Dove dissenter) speaks at UCLA in Los Angeles

16:00 (US) Weekly Crop Progress Report

The EUR/JPY had formed a huge marubozu candle(purple highlight) on 4h time frame after it was announced that Emmanuel Macron won the first round of the French presidential elections. If you followed my Price Action Trading School, than you should know that marubozu candle appears during high momentum in the market. Equities and EUR/USD went bullish, especially CAC40 as I predicted and analysed in the blog post before the elections.

Today POC zone comes within 117.50-80 (W H3, M L3, order block, inner trend line, 78.6 fib of marubozu candle, ATR low) and if the pair retraces we should see another spike to the upside targeting 118.54 and 119.90 followed by 120.30 and 121.00 (M L4). If we don’t see a retracement to POC, than pay attention to a retest of W H4 and close above (118.54) as it could also spike the pair towards above mentioned levels.

GOLD Bearish consolidation.

Gold has faded near the hourly resistance at 1295 (18/04/2017 high), suggesting a pickup in selling pressures. Support can be located at 1265 (intraday low).

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

SILVER Weakening.

Silver has broken strong support at 18.16 (rising trendline) indicating further downside risk. Hourly support is given at 17.65 (intraday low) then 16.82 (15/03/2017 low). Strong resistance is given at a distance at 19.00 (09/11/2017 high).

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

CRUDE OIL Ready for further downside.

Crude oil has declined sharply, breaking the support at 50.71, yet now has paused. Support now lies at 49.63 (08/12/2017 low). Resistance for a short-term bounce can be found at 50.71 (old support) and 53.70 (12/04/2017 high).

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

EUR/JPY Consolidating after short-term increase.

EUR/JPY has broken the resistance at 117.43 (23/11/2016 low). Other resistance stands at 122.88 (13/03/0217 high). Major support is given at 114.90 (18/04/2017low).

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Moving sideways.

EUR/GBP is now pausing after unsuccessfully challenged its key support at 0.8304. Resistances for a temporary rebound are given by 0.8500 (intraday high) and 0.8512 (18/04/2017 reaction high). The short-term technical structure is negative as long as the resistance at 0.8596 holds. Expected to show renewed weakness.

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

EUR/CHF Bouncing higher very sharply.

EUR/CHF has exited the downtrend channel. However, despite the bullish breakout, the medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low). Expected to see further decline.

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).