- Trump announced he’ll meet with Xi next month and said “we’ll know in 3-4 weeks if China trade deal is to be successful”, which saw a mini-bout of risk-on for FX markets. JPY is today’s weakest major and NZD and AUD are the strongest, allowing NZD/JPY and AUD/JPY to bounce from their lows and place them as today’s biggest gainers.
- On the data front, Australia’s business confidence came in at ‘0’ and April’s read was revised lower to -1, with conditions falling to its lowest level this year at 3. Most importantly, the employment component fell below average for the first time since 2016 ahead of Thursday’s all-important employment set. With employment remaining the stronger economic read, any weakness here will surely increase the odds of RBA cutting.
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BOJ’s Kuroda expects rates to stay in place beyond spring 2020, but will consider further easing if price momentum is lost.
- US10Y has found support above 2.4%, index futures point cautiously higher and gold has retreated below $1300 after hitting a 1-month high. USD/CNH has also retraced below resistance after its most bullish session since October. All in these moves appear to be technically driven and too soon to call a turnaround.
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