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No major data points? No problem!
Major forex pairs and asset classes still chalked up pretty good moves, despite U.K. and U.S. traders being out on a holiday.
Read on to find out how the markets fared.
Headlines:
- BOJ Governor Ueda: Central bank will proceed cautiously with inflation-targeting framework, as Japan “made progress in moving away from zero and lifting inflation expectations.”
- German Ifo business climate index for May: 89.3 (90.4 expected, 89.3 previous)
- Belgian NBB business climate index for May: -11.0 (-10.8 expected, -11.9 previous)
- ECB member Olli Rehn: “[T]he time is ripe in June” to cut rates as inflation falls to the 2% target in a “sustained way”
- ECB member Philip Lane: “The subsequent pace of rate cuts” will depend on underlying inflation strength
- U.K. banks closed in observance of Spring Day
- U.S. markets out on Memorial Day holiday
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Commodities were off to a running start, as gold and crude oil kicked the week off on a positive note and carried on with their climb for the rest of the day.
WTI crude oil is up more than 1% on Monday, buoyed by geopolitical jitters on news that an Egyptian soldier was killed in gunfire with Israeli military in Rafah.
Bitcoin tossed and turned early in the day before riding a late risk rally that also lifted the S&P 500 index while dragging the safe-haven dollar lower.
FX Market Behavior: U.S. Dollar vs. Majors
Overlay of USD vs. Major Currencies Chart by TradingView
Forex market liquidity was thinner than usual, as both the U.K. and U.S. markets were closed on holiday. There was not much to work with on the economic calendar either, save for a speech by BOJ Governor Ueda and a couple of business sentiment surveys from the eurozone.
The dollar started off moving sideways against its peers before breaking lower and carrying on with last Friday’s selloff. It chalked up its steepest losses versus the commodity currencies while putting up a decent fight against its fellow lower-yielders, the yen and franc.
ECB officials Lane and Rehn also had some dovish remarks in their testimonies, leading to a bit of a EUR selloff before the shared currency joined the rest of the forex gang in climbing against USD.
Upcoming Potential Catalysts on the Economic Calendar:
- Australian retail sales at 1:30 am GMT
- SNB Chairman Jordan’s speech at 4:55 am GMT
- BOJ core CPI at 5:00 am GMT
- U.S. S&P/CS Composite-20 HPI at 1:00 pm GMT
- U.S. CB consumer confidence at 2:00 pm GMT
Today’s schedule has a bit more going on, starting off with the Australian retail sales release and the BOJ core CPI.
The bigger market mover might come much later on, though, as the U.S. economy will be printing its CB consumer confidence index for May and might have some clues about spending activity moving forward.
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