Markets steady after a weak week

Most markets still in the red, despite rebound

Friday’s action was one of consolidation in the Asian session, with most assets classes still in the red for the week, despite the rebound seen in the last few days. The US30 index is down 0.33% on the week after bouncing off the 55-week moving average at 25,267. The NAS100 has fallen 0.14% and the SPX500 0.35%.

In the currency sphere, AUD/USD is languishing near 4-1/2 month lows after a disappointing week as the market interpreted recent data releases as an input that would push the RBA to an easing bias, possibly as early as next month’s meeting. AUD/USD is up 0.07% today at 0.6893. USD/JPY has seen some profit-taking and a scaling back of safe haven yen buying this week and is almost flat on the week. It’s now at 109.88 after touching 109.01 earlier in the week. The FX pair could snap a four-week losing streak this week.

USD/JPY Weekly Chart

Source: OANDA fxTrade

Singapore exports contract further

Singapore’s non-oil domestic exports contracted again in April, the second month in a row and this time by 10.0% y/y following an 11.8% decline in March.  The major culprits for the decline were a 31.1% decline in shipments to Japan and -25.4% to the Euro-zone. Shipments to the US increased by 2.2% from a year ago.

The Singapore dollar weakened further after the release of the data, falling as much as 0.1% versus the US dollar to 1.3735, the weakest level since December 27. USD/SGD is now trading above the 61.8% Fibonacci retracement of the decline from October to January. The 78.6% retracement will be found at 1.3780.

USD/SGD Daily Chart

Source: OANDA fxTrade

Are we due a Hong Kong growth revision?

Hong Kong releases final economic growth numbers for the first quarter of this year later today. The first estimate showed the economy expanded 0.5% from a year earlier with government spending the major contributor. Despite the fact that China reported steady growth of +6.4% y/y in the same quarter, there is still a risk that the Hong Kong numbers could be revised lower.

Such an outcome could indicate that Q2 performance might not be as buoyant and could result in a negative reaction across asset classes. The data is released at 0830GMT.

Euro-zone consumer prices feature

Consumer prices in the Euro-zone are expected to show a slower pace of increase in April, according to the latest survey of economists. Prices probably rose 0.7% m/m after spiking to +1.0% in March, the highest reading in 13 months.

It’s a slow calendar in North America, with US Michigan sentiment seen improving to 97.5 in May from 97.2. Speeches from Fed’s Clarida and Williams complete the week.

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

It’s a public holiday in Singapore on Monday so the next update will be on Tuesday 21^st.

Have a great (long) weekend.

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