The AUD is the strongest and the JPY is the weakest as new week, the new month and the North American session begins. The USD is mixed with the USD stronger vs the JPY, GBP, CAD, NZD and EUR and down vs the AUD and the CHF. Europe is mostly closed for May Day/Labour Day holiday.
The AUDUSD moved above its 100 hour MA and swing lows from March 24 and April 10 were broken between 0.6618 and 0.6625, and that helped to push the pair higher. The next target goes between 0.6649 and 0.6852 (see green numbered circles in the chart below).
Over the weekend, First Republic Bank has been taken over by Californian authorities, with JPMorgan Chase assuming its deposits, after more than $100 billion in deposits left the bank in Q1. It is the 3rd bank failure this year.
This week, the big news will include the Fed meeting on Wednesday. The Federal Reserve is expected to increase interest rates by a quarter percentage point in its policy-setting meeting which some believer could be the last increase in its year-long tightening cycle. US GDP rose by a modest 1.1% last week. U.S. stock futures are traded cautiously ahead of the Fed meeting today.
On Friday, the monthly jobs report will be released with expectation at 182,000 increase. The number would mark the third straight month of decelerating employment growth.
About 50% of S&P 500 companies have reported earnings so far with declines of -3.7% for the period which is less than the -6.7% decline projected at the end of March. Earning this week will be highlighted by Apple on Thursday. Some other big-name companies set to report in the coming week include Ford, Starbucks, AMD. Marriot, Pfizer, Moderna and Uber. Last week Microsoft, Amazon, Alphabet, Boeing, Caterpillar, Intel, 3M, Bristol-Myers Squibb, Merck or reported, so most of the big names have already reported. Apple (Thursday) and Nvidia (May 24 expected release date).
Crude prices fell on weak Chinese manufacturing data and concerns that another interest rate hike by the Fed would limit economic activity.
Economic results over the weekend and economic results for today include Japan's Final Manufacturing PMI coming in at 49.5 as expected, Australia's MI Inflation Gauge at 0.2% m/m vs 0.3% last month, and ANZ Job Advertisements at -0.3% m/m vs -2.4% last month. . Japan's Consumer Confidence is at 35.4. Australia's Commodity Prices y/y is at -19.2%.
On the economic calendar today, Canada's Manufacturing PMI will be released at 9:30 AM and is expected at 50.2 vs 48.6 last month. The U.S. Final Manufacturing PMI from S&P global is estimated at 50.4 vs 50.4 preliminary (at 9:45 AM ET), ISM Manufacturing PMI at 46.8 vs 46.3 last month with ISM Manufacturing Prices at 49.4 (vs 49.2 last - at 10 AM), and Construction Spending m/m at 0.2% vs -0.1%(also at 10 AM). Bank holidays are observed in Switzerland, the UK, France, Germany, and Italy.
A snapshot of the markets currently shows:
- Spot gold is trading down around $1 or -0.05% at $1988.
- Spot silver is up $0.19 or 0.77% at $25.23
- WTI crude oil is down $1.65 at $75.13
- Bitcoin traded as low as $28,289. The current price trades at $28,528
As we head into the new month of May where traders are supposed to "sell in May and go away":
- Dow industrial average is down -8.16 points after Friday's 272 point rise. Last week the Dow industrial average rose 0.86%. Last month the Dow industrial average rose 2.48%.
- S&P index -4.25 points after Friday's 34.15 point rise. Last week the S&P rose 0.87%. Last month the S&P index rose 1.46%.
- NASDAQ index after last Friday's 84.35 point rise. Last week the NASDAQ index rose 1.28%. Last month the NASDAQ index squeaked out a 0.04% gain
In May of last year:
- Dow industrial average rose 0.04%
- S&P index was unchanged
- NASDAQ index fell -2.5%
In the US debt market:
- 2 year yield 4.091% +2.7 basis points
- 5 year yield 3.553% +1.5 basis points
- 10 year yield 3.478% +2.7 basis points
- 30 year yield 3.714% +3.7 basis points
