Key overnight events:

  • US durables goods orders rose 3.4% in April from a month before, beating estimates of a 0.5%-increase. Core orders, however, slipped 0.8% over the same period; a 0.3%-increase was predicted.
  • Jobless claims for the previous week fell for the second week to 268,000, lower than the 275,000 expected. Pending home sales in April rose 5.1% month-on-month, the most since 2010, soundly beating the median estimate of a 0.7%-rise.
  • The S&P 500 Index fell less than 0.1% as declines led by financial shares were offset by gains in utility and consumer staple companies; investors’ attention will be now placed on tonight’s GDP numbers and a speech by Fed Chair Janet Yellen.
  • The US dollar weakened slightly, with the Bloomberg Spot Dollar Index declining 0.2%, as market pricing for odds of a June hike, as reported by Bloomberg, fell to 28% from 34%.
  • Front-month crude oil futures settled 0.2% lower at $49.48/bbl, after briefly edging past the $50 handle earlier in the session. US inventories slid by 4.23 million barrels last week, exceeding an expected drop of 2 million barrels, while attacks in Nigeria have cut production to a 20-year low and Venezuela is struggling to maintain output amid power cuts.
  • Federal Reserve Governor, Jerome Powell, who votes on the committee this year, said he backs a sooner hike but sees no reason to hurry and is keeping watch on economic data as well as global risks.
  • Japan had earlier sought to add a warning that the global economy is at risk of “falling into crisis” to the final G-7 communique to be released Friday, according to a copy of a draft obtained by Bloomberg News. The economy section of the draft statement outlined risk and called for a mix of investment and policy tools to spur growth.
  • Japan’s CPI in April fell 0.3% from a year earlier, raising pressure for more stimulus by the BOJ. Local newspapers reports speculated that Prime Minister Abe has decided to delay a sales-tax increase, initially scheduled for April 2017.



  • Spot 1.3746
  • Industrial production for April surprised positively, rising by 2.9% year-on-year; a 0.2%-decline was expected.
  • Positive industrial production numbers and a weaker US dollar overnight has sent USDSGD lower, with the currency pair declining 0.3% to a session low of 1.3720 earlier.



  • Spot 0.7221
  • AUDSUD continues to be capped by the resistance at 0.7253, its 200-day moving average. The currency pair rose 0.3% last night, before paring back all gains earlier this morning.
  • AUDUSD remains on course to test the next key support level at 0.7000.



  • Spot 1.2994
  • Following a 1.3% decline the previous day, USDCAD briefly extended losses last night to 1.2911, before recovering to trade 0.4% higher to the 1.3000 handle.
  • The Canadian dollar has surpassed the yuan to become the world’s fifth most-used payments currency, regaining the fifth spot for the first time in 2 years, behind the US dollar, euro, sterling pound and the yen.



  • Spot 6.5650
  • Industrial profits in April rose 4.2% year-on-year, slowing from the 11.1%-rise the prior month.
  • USDCNH continues to remain steady, as it has throughout this week, rising less than 0.1% after the PBOC raised its daily fixing.
  • The spread between, or discount of, offshore yuan versus the onshore yuan – a key gauge of pessimism among foreign investors, has almost disappeared after reaching a record 2.9% in January. Yuan options are pricing in a 13% chance of a more than 6%-drop to 7.000 yuan per US dollar by year-end. The probability has declined from more than 30% in January.



  • Spot 8.2727
  • USDNOK pared declines, after falling by as much as 1.5% over the past 3 days. The currency pair traded 0.5% lower to register a session low of 8.2407, its lowest in a week, following Brent crude’s advance to a 6-month high.


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