S&P 500 Talking Points:
- NZ Dollar falls with Asian shares, Yen retreats from 19-month high
- Soft ISM, ADP figures may weigh against Fed rate hike speculation
- S&P 500 futures hint risk aversion may limit US Dollar weakness
The Japanese Yen and the New Zealand Dollar faced selling pressure in overnight trade. The sentiment-sensitive Kiwi tracked Asian share prices lower, tipping risk aversion as the catalyst behind the move. The Australian Dollar managed to hold up better than its New Zealand counterpart, trading little-changed as corrective flows after yesterday’s sharp post-RBA selloff helped offset risk-off pressure.
Meanwhile, the Yen’s losses appeared to reflect a retracement after the currency hit a 19-month high yesterday. The typically anti-risk currency may have managed to diverge from sentiment trends with Japanese markets closed for a holiday.
Looking ahead, a relatively quiet economic calendar in European trading hours is likely to see investors looking ahead to US news-flow. An estimate of payrolls growth from ADP and April’s ISM Non-manufacturing Composite gauge take top billing.
The former is expected to show the economy added 195,000 private sector jobs in April, marking a bit of a slowdown from the 200k gain recorded in the prior month. The latter is projected to reveal that the pace of service-sector activity growth accelerated to the fastest in four months.
US data outcomes have increasingly underperformed relative to consensus forecasts in recent months, opening the door for disappointments. Such outcomes may inform pre-positioning ahead of Friday’s much-anticipated release of official employment figures, weighing on the US Dollar as traders bet that soft data will scatter chances for a Fed rate hike next month.
Continued risk aversion may offer a lifeline to the greenback however. The benchmark unit reclaimed its safe-haven credentials yesterday, pushing broadly higher against the majors as stocks declined. S&P 500 futures are pointing meaningfully lower overnight, warning that more of the same may cap data-inspired USD weakness.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
22:45 | NZD | Unemployment Rate (1Q) | 5.7% | 5.5% | 5.4% |
22:45 | NZD | Employment Change (QoQ) (1Q) | 1.2% | 0.6% | 1.0% |
22:45 | NZD | Employment Change (YoY) (1Q) | 2.0% | 1.3% | 1.4% |
22:45 | NZD | Participation Rate (1Q) | 69.0% | 68.6% | 68.5% |
22:45 | NZD | Pvt Wages Ex Overtime (QoQ) (1Q) | 0.4% | 0.3% | 0.4% |
22:45 | NZD | Pvt Wages Inc Overtime (QoQ) (1Q) | 0.4% | 0.3% | 0.4% |
22:45 | NZD | Average Hourly Earnings (QoQ) (1Q) | 0.3% | 0.5% | 0.2% |
23:00 | USD | Fed's Lockhart Speaks to World Affairs Council | - | - | - |
23:01 | GBP | BRC Shop Price Index (YoY) (APR) | -1.7% | -1.7% | -1.7% |
23:30 | AUD | AiG Perf of Services Index (APR) | 49.7 | - | 49.5 |
0:00 | NZD | QV House Prices (YoY) (APR) | 12.0% | - | 11.4% |
1:00 | NZD | ANZ Commodity Price (APR) | -0.8% | - | -1.3% |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
6:00 | CHF | UBS Real Estate Bubble Index (1Q) | - | 1.41 | Low |
6:45 | EUR | France Trade Balance (MAR) | -4200m | -5177m | Low |
6:45 | EUR | France Current Account Balance (MAR) | - | -3.9b | Low |
7:45 | EUR | Markit/ADACI Italy Services PMI (APR) | 51.9 | 51.2 | Low |
7:45 | EUR | Markit/ADACI Italy Composite PMI (APR) | - | 52.4 | Low |
7:50 | EUR | Markit France Services PMI (APR F) | 50.8 | 50.8 | Low |
7:50 | EUR | Markit France Composite PMI (APR F) | 50.5 | 50.5 | Low |
7:55 | EUR | Markit Germany Services PMI (APR F) | 54.6 | 54.6 | Medium |
7:55 | EUR | Markit/BME Germany Composite PMI (APR F) | 53.8 | 53.8 | Medium |
8:00 | EUR | Markit Eurozone Services PMI (APR F) | 53.2 | 53.2 | Medium |
8:00 | EUR | Markit Eurozone Composite PMI (APR F) | 53.0 | 53.0 | Medium |
8:30 | GBP | Markit/CIPS UK Construction PMI (APR) | 54.0 | 54.2 | Medium |
9:00 | EUR | Eurozone Retail Sales (MoM) (MAR) | -0.1% | 0.2% | Medium |
9:00 | EUR | Eurozone Retail Sales (YoY) (MAR) | 2.6% | 2.4% | Medium |
10:15 | EUR | ECB's Weidmann Speaks in Frankfurt | - | - | Medium |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EUR/USD | 1.1296 | 1.1416 | 1.1457 | 1.1536 | 1.1577 | 1.1656 | 1.1776 |
GBP/USD | 1.4129 | 1.4370 | 1.4453 | 1.4611 | 1.4694 | 1.4852 | 1.5093 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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