Key overnight events:
- The S&P 500 Index rose 1.0%, rebounding from a third weekly decline, its longest sliding streak since January. Apple, Inc. rallied 3.7% after Berkshire Hathaway disclosed it had built more than a $1 billion-stake at the end of the first quarter.
- WTI futures expiring in June climbed 3.3% to $47.72/bbl, its highest close in more than five months, with data showing China’s refineries processed crude at record rates in April, helping ease a supply glut as the number of active rigs in the US declines. Goldman Sachs increased its price forecast of oil, saying the market had moved into a supply deficit earlier than expected.
- The US dollar held near its strongest levels since March as the Bloomberg Spot Dollar Index was unchanged after rallying 2.6% since the start of May.
- Richmond Fed President Jeffrey Lacker commented that the central bank should consider raising rates at its June meeting, citing strong inflation moving decidedly towards 2%, tightening labor markets and a recent dissipation of downside risks.
- Billionaire investor George Soros cut his firm’s investment in US equities by 37% in the first quarter and bought a $264 million-stake in the world’s biggest bullion producer Barrick Gold Corp.
- Spot 1.3671
- Non-oil domestic exports fell 7.9% year-on-year in April, less than the predicted 8.4%-fall and the prior month’s decline of 15.7%.
- USDSGD declined back below the 1.3700 handle, by as much as 0.2% today to 1.3665, earlier today.
- Spot 0.7347
- In its minutes of its latest policy meeting, the RBA said that a “broad-based” weakening of inflation pressures led to an interest-rate cut even as growth outlook remained steady and board members debating holding rates steady so they can await more information.
- AUDUSD bounced off its 200-day moving average yesterday and extended its rebound today by a further 1.0% to 0.7366, following the release of RBA’s minutes.
- Key resistance level lies around the 0.7400 handle.
- Spot 1.2858
- USDCAD fell by as much as 0.5% to 1.2845 today, as it continues to be sandwiched between the 50-day moving average resistance of 1.2949 and the support level at 1.2832. The latter is in danger of being breached as crude oil resumes its intraday ascent to fresh highs.
- Spot 6.5399
- USDCNH declined 0.1% back towards its 100-day moving average of 6.5394. The yuan traded in Hong Kong’s offshore market strengthened against the US dollar for the second day after data signalled outflows moderated further last month.
- Chinese banks sold less foreign exchange for clients in April compared with March, according to the nation’s currency regulator. Outflows slowed further, while companies and individuals have become less willing to hold foreign exchange.
- Spot 8.1414
- USDNOK fell 0.3% to 8.1345 earlier today, helped on by an overnight rally in oil prices.
- Over the medium-term, the currency pair is likely to maintain its range within the resistance around 8.2500 and the psychological support of 8.0000.