Midday brief – US data in focus

The New Zealand Treasury indicated in the Annual Budget Release that they are no longer forecasting a recession to hit the country. The employment data from Australia supported an easy stance on monetary policy decisions from the RBA. President Joe Biden is in Japan for the G-7 meetings.

AUDUSD went under selling pressure after data from the Australian Bureau of Statistics showed a weakness in the employment sector. The number of people employed in April fell sharply to -4.3K from a previous reading of 61.1K, pushing up the unemployment rate to 3.7% from 3.5%. The data has made investors anticipate an unchanged policy decision by the RBA which has weighed on the AUD.

The US dollar maintained gains as the US Government says it will not get to a default which is expected as early as the first of June. Focusing ahead, the US Philly Fed Manufacturing Index, Initial Jobless Claims, and Existing Home Sales will be released later in the day. The pair lost -0.28% sliding towards 0.6600, a psychological low.

NZDJPY traded flat around the 86.00 mark in the aftermath of economic data releases from both countries. The New Zealand Producer Price Index Input slumped to 0.2% missing estimates of 0.5% in the first quarter while outputs fell to 0.3% vs 0.8% surveyed.

Exports and imports in Japan disappointed in the year ending April coming at 2.6% and -2.3% respectively. This saw the trade balance settle at -432.4 billion. A move higher may give bulls 86.80 and 87.30 in the near term while an extended move higher may give up 88.00.

EURCAD fell -0.13% as the Euro weakened amid a continued risk-off mood. The ECB President Christine Lagarde signalled more rate hikes to curb high inflation although market participants were not moved by the comments amid a cautious mood. The Euro area observes the Ascension Day Holiday today.

The Canadian economic file will feature New Housing Price Index, the BoC Financial System Review, and a speech from BoC Governor Macklem. Sellers took over from 1.4600 and may slide down to 1.4500 and 1.4450.

European stocks soared amid a cautious mood in the European session. DAX in Germany was the biggest gainer, rising +1.28% after breaching the 16 000 mark as it closed in on a multi-year high at 16 300. FTSE 100 in the UK was up +0.23% although 7800 remains a hurdle to the upside. CAC 40 in France rose +0.37% trimming a 3-day losing streak above 7400.

US stock futures traded higher ahead of the Initial Jobless Claims. US 100 futures were up +0.29% after moving above 13 600, with targets at 14 00 on the rally. US 30 futures were up +0.14% trading between 33 500 and 33 350. US 500 futures rose +0.24% as buyers may soar to 4180.

Additionally, gold dropped further extending its 3-day slump as the dollar continues to strengthen on the anticipated debt limit deal. XAUUSD was down -0.26% trading below $1980 as bears may reclaim $1950.