The risk-off mood continues for the third straight session; global equity benchmark indices rallied. European benchmark indices up between 0.80%-1.70% overnight. Besides Nasdaq up by a percent, S&P and Dow Jones up by 0.85% each.

FX update: US 10year Treasury yield up 3bps closed at 2.40, and the dollar rose to a week high. We believe robust US data brings risk appetite. The US-China trade war has cooled down a bit compared to last week.
Danske Bank said, “We expect markets to look for signs of negotiations restarting.”

AUDUSD, EURUSD, GBPUSD, and NZDUSD were among G10 currencies closed near the day’s low. At close, the cable closed below the 1.2860 its parallel support. We are waiting for the 100.fe target.

In commodities, Gold lost 10$ whereas Brent crude oil up by a percent and settled above 20MA again. Turning to cryptocurrency Bitcoin down nearly 4.5 %, currently trading at 7900$ up by 3.00% this morning.

Data review:

Australia April unemployment rate lifts sharply and full-time employment modestly. On the higher unemployment and underutilization rate, AUD remains underperformed in among G10.

Turning to the other macro data, Philly Fed surprisingly increased from 8.5 to 16.6 this month, according to the official data.

Looking at the day ahead, it’s a quiet day in terms of data releases except for EZ April CPI.

Chart of the day: CHFJPY

As long as 108.30 is supported, we expect a break out with a target at 109.70

 

It is important to always keep in mind the risks involved in trading with leveraged instruments.

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