Morning Market Update – French Elections Stir the Market

So Far

The People’s Bank of China has set the Yuan reference rate at 6.8947 versus Friday’s rate at 6.8884.

Australia Building Permits (MoM) came in at -13.4%, below expectations (-4%) in March

Australia ANZ Job Advertisements saw an increase to 1.4% in March from the previous value of 0.3%

National Australia Bank’s Business Confidence also saw an increase to 13. The previous value was at 6.

Australia Building Permits (YoY): -19.9% (March) vs previous -4.9%

Last week, the RBA had warned about a likely housing market shock that would weigh on consumer spending and inflation.

China Trade Balance CNY increased to 262.3B in April from previous 164.34B

China Exports (YoY) CNY: 14.3% (April) vs previous 22.3%

China Exports (YoY) below forecasts (10.4%) in April: Actual (8%)

China Imports (YoY) came in at 11.9%, below forecasts (18%) in April

China Trade Balance USD registered at $38.05B, above forecasts ($35.5B) in April causing mixed reactions in the market.

Coming up

Moving on with the major release we have FOMC Member Mester speech for the US to be heard. And later in the day with Labor Market Conditions Index, the economy continues to see growth in the labor markets. The April jobs report suggested some steady job growth, job market made some improvement with the household survey showing better growth as well. The unemployment rate continued to fall and now is currently at the lowest in recent times.

The Canadian Housing Starts s.a (YoY) have been producing mixed results in recent past. It could be interesting to see the release later in the day followed by BoC Review.

We don’t have any major release for the day that should impact the trading for the day.

Macron has won the second round of the French elections, in accordance with popular expectations, and this has hurt the EUR. The ensuing tensions and market risks have obscured the Fed policy.

As a result, the markets have paid minimal attention to the Fed balance sheet normalization. We could see this from the drop in the US dollar against the EUR.

 
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