Impact on Europe & US Sessions: ECB and Fed in Focus

Stay updated on the Impact on Europe and the US Sessions. The latest forecast offers insights on currencies, commodities, and central bank actions.

What happened in the Asia session?

China released its April industrial production and retail sales data for April. Industrial activity surged, growing from 4.7% in March to 6.7% year-on-year, surpassing expectations of 5.5%. Manufacturing, utilities, and mining sectors expanded significantly, driven by ongoing government support measures. However, retail sales growth decelerated, rising only 2.3% year-on-year, missing the market forecast of 3.8%. This represents the ninth consecutive month of retail trade increases but marks one of the most minor gains in this period. Despite mixed data, the stronger-than-expected industrial activity will likely sustain high demand for crude oil in China. Consequently, WTI oil traded around $79.50 per barrel, poised to achieve its first notable weekly gain in four weeks.

What does it mean for the Europe & US sessions?

Analysts expect headline and core CPI in the Euro Area to continue easing in April, forecasting them at 2.4% and 2.7% year-on-year, respectively. As inflation nears the 2% target amid sluggish economic activity, the European Central Bank (ECB) may consider cutting interest rates following the Swiss National Bank’s (SNB) example.

Federal Reserve Governor Christopher Waller will speak about payments innovation and the Fed’s roles at the International Organization for Standardization Technical Committee 68 Financial Services 44th Plenary Meeting in Minneapolis. Following recent ‘soft’ CPI and consumer spending data, his remarks could offer insights into future monetary policy, potentially signaling a dovish shift by Fed officials.

The Dollar Index (DXY)

Key news events today:

• FOMC Member Waller Speaks (2:15 pm GMT)

What can we expect from DXY today?

Governor Waller’s speech could provide crucial insights into the Federal Reserve’s future monetary policy stance, especially in light of recent economic data suggesting a potential dovish shift. This could influence the Dollar Index, which has a weak bearish bias.

Central Bank Notes

• The Federal Funds Rate remains unchanged at 5.25% to 5.50% for the sixth consecutive meeting.
• The Committee focuses on achieving maximum employment and maintaining inflation at 2% over the long run.
• The outlook remains uncertain despite easing inflation, with the Committee attentive to inflation risks.
• Economic activity continues solidly, with strong job gains and low unemployment.
• The next Federal Reserve meeting is from 11 to 12 June 2024.

Next 24 Hours Bias: Weak Bearish

Gold (XAU)

Key news events today:

• FOMC Member Waller Speaks (2:15 pm GMT)

What can we expect from Gold today?

Governor Waller’s speech could impact the dollar’s strength. A dovish stance may support gold prices in the near to medium term. The following 24 hours show a weak bullish bias for gold.

Next 24 Hours Bias: Weak, Bullish

The Australian Dollar (AUD)

Key news events today:

• No major news events.

What can we expect from AUD today?

The AUD fell to 0.6654 overnight but rebounded to 0.6680 as Asian markets opened. Current support and resistance levels are 0.6640 and 0.6720, respectively.

Central Bank Notes

• The Reserve Bank of Australia (RBA) kept the cash rate at 4.35%.
• Analysts forecast inflation to return to the 2-3% target range by late 2025.
• The next RBA meeting is on 18 June 2024.

Next 24 Hours Bias: Weak, Bullish

Impact on Europe & US Sessions: ECB and Fed in Focus

The Kiwi Dollar (NZD)

Key news events today:

• No major news events.

What can we expect from NZD today?

The NZD dropped to 0.6095 during the US session but climbed to 0.6120 by the start of the Asia session. Support and resistance levels are 0.6075 and 0.6180, respectively.

Central Bank Notes

• The Reserve Bank of New Zealand (RBNZ) kept the OCR at 5.50%.
• Inflation remains above the 1-3% target range.
• The next RBNZ meeting is on 10 July 2024.

Next 24 Hours Bias: Weak, Bullish

The Japanese Yen (JPY)

Key news events today:

• No major news events.

What can we expect from JPY today?

Despite weak industrial output, USD/JPY hit 155.54 overnight and traded around 155.40 as Asian markets opened. Support and resistance levels are 153.60 and 156.60, respectively.

Central Bank Notes

• The Bank of Japan (BOJ) continues its QQE with Yield Curve Control.
• The next BOJ meeting is on 14 June 2024.

Next 24 Hours Bias: Weak, Bullish

The Euro (EUR)

Key news events today:

• CPI (9:00 am GMT)

What can we expect from EUR today?

Moreover, analysts expect Euro Area CPI for April to ease, forecasting headline and core CPI at 2.4% and 2.7% year-on-year, respectively. Consequently, the ECB may consider interest rate cuts if inflation continues to align with the target.

Central Bank Notes

• The ECB has kept interest rates unchanged at 4.50%.
• The next ECB meeting is on 6 June 2024.

Next 24 Hours Bias: Weak, Bullish

The Swiss Franc (CHF)

Key news events today:

• No major news events.

What can we expect from CHF today?

Despite higher US unemployment claims, USD/CHF hit 0.9057 overnight and traded around 0.9060 at the start of the Asia session. Support and resistance levels are 0.8980 and 0.9090, respectively.

Central Bank Notes

• The SNB reduced its key policy rate to 1.50%.
• The next SNB meeting is on 20 June 2024.

Next 24 Hours Bias: Weak, Bullish

The Pound (GBP)

Key news events today:

• No major news events.

What can we expect from GBP today?

GBP/USD fell to 1.2643 overnight but recovered to 1.2670 as Asian markets opened. Support and resistance levels are 1.2640 and 1.2700, respectively.

Central Bank Notes

• The Bank of England (BoE) maintained its Official Bank Rate at 5.25%.
• The next BoE meeting is on 20 June 2024.

Next 24 Hours Bias: Weak, Bullish

The Canadian Dollar (CAD)

Key news events today:

• No major news events.

What can we expect from CAD today?

Despite weak US industrial production output, USD/CAD hit 1.3640 overnight but retreated to 1.3615 as the Asia session began. Support and resistance levels are 1.3590 and 1.3650, respectively.

Central Bank Notes

• The Bank of Canada held its overnight rate at 5.0%.
• The next BoC meeting is on 5 June 2024.

Next 24 Hours Bias: Weak, Bullish

Oil

Key news events today:

• Industrial Production (2:00 am GMT)
• Retail Sales (2:00 am GMT)

What can we expect from Oil today?

China’s stronger-than-expected industrial activity suggests sustained demand for crude oil, with WTI oil trading around $79.50 per barrel. The mixed data from China could positively influence oil prices.

Next 24 Hours Bias: Weak, Bullish

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