S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
ING’s Chris Turner notes that risk assets and Asian currencies have stabilised, but expects the US Dollar (USD) to stay supported on dips as markets await key US data and central bank meetings. He highlights focus on United States (US) Consumer Price Index (CPI) and Producer Price Index (PPI), a less dovish Federal Open Market Committee (FOMC), and sees US Dollar Index (DXY) finding support near 99.80 before retesting the upside.
Dollar steadies as traders eye data
“The good news for investors is that Friday’s sell-off in tech stocks saw little follow-through selling yesterday. And overnight, some of those stocks which led the sell-off, such as the Korean chipmakers, have bounced back strongly.”
“The volatility of tech stocks, however, looks to be a distraction to the dominant cyclical story in FX markets, which is the potential for the Fed to tighten policy. Last week was all about the strength of the US labour market and this week the market will be focused on US price data. “
“Today’s focus is on the NFIB small business optimism data, the weekly ADP jobs data and the April trade balance. On the subject of trade, China released another healthy set of trade data overnight, which is lending some support to the renminbi and the Asian currency complex in general.”
“On a related subject, the US Treasury market should take note of likely FX intervention across a large swathe of Asia and what it means for US Treasury sales. Fed custody holdings data show another $71bn decline in foreign official holdings of Treasuries since the start of May – which will add further pressure to the market.”
“This starts with tomorrow’s May CPI and is followed by PPI on Thursday. The market looks positioned for some firm data here and a far less dovish FOMC meeting in a week’s time.”
“DXY is consolidating after a strong rally on Friday, and we would expect it to find support around the 99.80 area before another look at the upside later this week.”
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