Eyes on Eurozone inflation and GDP

1 min read

Following a volatile opening to the week, markets remain relatively quiet on Tuesday, as gross domestic product (GDP) data for the first quarter from the Euro area and Germany will be watched closely.

Eurostat will also release the preliminary Harmonized Index of Consumer Prices (HICP) for April.

The US economic docket will feature housing data and the Federal Reserve’s two-day meeting will get underway.

The US Dollar weakened against its major rivals on Monday and the USD Index (DXY) closed the day in negative territory. In European trading on Tuesday, the index recovered toward 106.00.

In the meantime, the benchmark 10-year US Treasury bond yield holds above 4.6% and US stock index futures trade marginally lower. CB Consumer Confidence for April and Employment Cost Index data for the first quarter will also be watched closely later in the day.

Following Japan’s suspected intervention in foreign exchange markets, USDJPY fell to 154.50 in Asian trading on Monday. The pair erased a portion of its daily losses later in the day and continued to recover toward 157.00 early Tuesday.

Japan’s top currency diplomat, Masato Kanda, said that he has no comment on foreign exchange intervention for now, when asked by media if authorities had stepped into markets to support the Yen. Kanda added that the Ministry of Finance will release figures on currency intervention at the end of May.

EURUSD registered small gains on Monday, but lost its traction on Tuesday. The pair was last seen trading at around 1.0700.

The data from Germany showed earlier in the day that Retail Sales rose 1.8% on a monthly basis in March following the 1.9% contraction recorded in February.

The Australian Bureau of Statistics reported on Tuesday that Private Sector Credit grew 5.1% on a yearly basis in March, while Retail Sales declined by 0.4% (MoM).

Meanwhile, Caixin Manufacturing PMI in China edged higher to 51.4 in April from 51.1 in March and NBS Non-Manufacturing PMI declined to 51.2 from 53.

AUDUSD came under heavy bearish pressure following mixed data releases and declined toward 0.6500 during Asian trading.

GBPUSD rose more than 0.5% on Monday, but reversed its direction early Tuesday. As of writing, the pair was down 0.25% near 1.2530.

Gold struggled to find direction on the first trading day of the week and closed virtually unchanged.

XAUUSD remains on the back foot in the European session and trades below $2,330.

(Source: OANDA)