Investors Avoid Risking (Weekly Review)

Last week was favorable for bears in the euro and the British pound, as well as for the bulls in the Japanese yen, the Swiss franc and gold. The euro remained under pressure from sellers triggered by differential in interest rates, sluggish growth rates in the eurozone economy, and political and economic risks in Italy. As a result, the single European currency again approached strong support from the 11th figure paired with the US dollar, but here it is still bought out. However, below the 12th figure, its prospects will remain negative, and the downside risks in the direction of 1.1000 will prevail.

Existing risks of a British exit from the European Union without a corresponding deal continue to negatively affect the dynamics of the British pound. On the fall against the USD to 1.2560, profit taking on short positions was noted, which returned the pair to 1.2655, but there are still no reasons for the trend reversal at this stage, therefore, the pound bulls will have to fight for the resistance area 1.2665-1.2700.

The trade war between the United States and China provoked investors to avoid risks and buy such ‘safe haven’ assets like the franc, yen and gold. Thus, the USD continued to fall against the yen, and as a result support was reached around 108.07. Here, the bulls may attempt to take over the initiative, and the pair may develop a recovery towards 108.50-108.70, where a fresh selling interest should be expected. Sales on the stock markets can continue, together with attempts of bears on the dollar / yen to break through the 108th figure.

Schedule for this week:

Monday, June 3 
07:55 GMT – Germany. Markit Manufacturing Purchasing Managers Index (PMI) (May);
08:30 GMT – United Kingdom. Markit Manufacturing Purchasing Managers Index (PMI) (May);
13:30 GMT – Canada. Manufacturing Purchasing Managers Index (PMI) (May);
13:45 GMT – USA. Markit Manufacturing Purchasing Managers Index (PMI) (May);
14:00 GMT - USA. ISM Manufacturing Purchasing Managers Index (PMI) (May);
14:00 GMT - USA. ISM Prices Paid Index (May).

Tuesday, June 4 
01:30 GMT - Australia. Retail Sales (MoM) (Apr);
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Interest Rate Decision;
04:30 GMT - Australia. Reserve Bank of Australia (RBA) Rate Statement;
09:00 GMT - Eurozone. Consumer Price Index (CPI);
09:00 GMT - Eurozone. Core Consumer Price Index (CPI);
09:00 GMT - Eurozone. Unemployment Rate;
09:30 GMT - Australia. RBA Governor Lowe Speaks;
14:00 GMT - USA. Factory Orders (MoM) (Apr).

Wednesday, June 5
01:30 GMT - Australia. GDP (QoQ) (Q1);
01:45 GMT - PRC. Caixin Services PMI (May);
07:15 GMT - PRC. Industrial Production (QoQ) (Q1);
08:00 GMT - Eurozone. Markit Composite Manufacturing Purchasing Managers Index (PMI);
08:30 GMT - United Kingdom. Markit Services Purchasing Managers Index (PMI);
09:00 GMT - Eurozone. Retail Sales;
12:15 GMT - PRC. ADP Nonfarm Payrolls (May);
13:45 GMT - USA. Markit Composite Purchasing Managers Index (PMI);
14:00 GMT - USA. ISM Services Purchasing Managers Index (PMI);
18:00 GMT – USA. Beige book.

Thursday, June 6
23:50 GMT - Japan. Foreign Investments in Japanese Stocks;
01:30 GMT - Australia. Trade Balance;
01:30 GMT - Australia. Import/Export;
06:00 GMT - Germany. Factory Orders;
09:00 GMT - Eurozone. GDP;
11:45 GMT - Eurozone. ECB Deposit Facility Rate;
12:30 GMT - Eurozone. ECB Press Conference and Monetary Policy Statement;
12:30 GMT - USA. Initial Jobless Claims;
12:30 GMT - USA. Trade Balance;
12:30 GMT - USA. Unit Labor Costs;
14:00 GMT – Canada. Ivey Purchasing Managers Index (PMI).

Friday, June 7
22:30 GMT - Australia. AIG Construction Index (May);
23:30 GMT - Japan. Household Spending;
01:30 GMT - Australia. Home Loans (Apr);
05:00 GMT - Japan. Leading Index;
05:45 GMT - Switzerland. Unemployment Rate;
06:00 GMT - Germany. Trade Balance;
06:00 GMT - Germany. Industrial Production;
08:00 GMT - PRC. FX Reserves (USD);
12:30 GMT - USA. Nonfarm Payrolls;
12:30 GMT - USA. Average Hourly Earnings;
12:30 GMT - USA. Unemployment Rate;
12:30 GMT - USA. Average Weekly Hours;
12:30 GMT - Canada. Employment Change;
12:30 GMT - Canada. Unemployment Rate.

Author: Anthony Porter, IAFT Analyst