Forex news from the European morning session - 1 May 2019
Headlines:
- US MBA mortgage applications w.e. 26 April -4.3% vs -7.3% prior
- de Guindos: ECB is 'open-minded' about tweaks to inflation target
- ECB's de Guindos: Central bank doesn't have a bank profitability mandate
- ECB's de Guindos: Low interest rate environment is with us for the foreseeable future
- UK March mortgage approvals 62.3k vs 64.5k expected
- UK April manufacturing PMI 53.1 vs 53.1 expected
- Mnuchin says concluded productive meetings with China's Liu He
Markets:
- CHF leads, NZD lags on the day
- E-minis +0.3%
- US 10-year yields down 0.5 bps to 2.496%
- Gold down 0.1% to $1,282.14
- WTI down 0.4% to $63.64
- Bitcoin up 1.3% to $5,306
It was a quiet session overall as major European markets - except for London - are closed today in observance of Labour/May Day. That said, currencies did move around a little with the dollar notably losing ground with the FOMC meeting later today coming into focus.
EUR/USD crept higher from 1.1220 at the start of the morning to near 1.1240 levels currently, where large expiries are seen close to 1.1240-50 today. Meanwhile, cable also extended overnight gains as the pound continues to look perky after breaking above key resistance levels. The pair made its way from 1.3040 to 1.3076 and trades just below that currently.
At the same time, USD/JPY also inched lower from highs of 111.55 at the start of the session to a low of 111.26 and is closer to 111.30 now with Treasury yields not offering much help.
Meanwhile, the swissie is the lead gainer as USD/CHF sellers seized near-term control by breaking below the 200-hour moving average after having flirted with the support level since trading yesterday. That accelerated the drop in the pair as it fell from 1.0180 to a low of 1.0152 during the European morning.
Other than that, the kiwi is still the laggard as it fell in Asia Pacific trading after the NZ Q1 labour market report disappointed expectations and reignited the RBNZ rate cut debate. However, NZD/USD did creep higher on the back of dollar weakness rising from 0.6640 levels to near 0.6660 currently.
Looking ahead, the attention turns to the FOMC meeting later today as markets are angling towards a more dovish Fed with inflation worries seen growing especially after the US Q1 preliminary GDP report and this week's PCE data. Let's see what Powell & co. has in store for us as we begin the month of May.
