Key overnight events:

  • US ISM Manufacturing in April came in at 50.8, from 51.8 the prior month and lower than the estimated reading of 51.4. According to the ISM’s report, factory payrolls shrank in April for the fifth consecutive month, while export orders crept up to 52.5, the highest since Nov 2014.
  • The S&P 500 Index advanced 0.8%, its biggest gain in almost 3 weeks, as consumer and financial shares paced gains. The US dollar remained on the back foot as it continued to weaken broadly; the Bloomberg Spot Dollar Index is down 2.0% from about a week ago, and is approaching 15-month lows.
  • WTI futures expiring in June settled 2.5% lower at $44.78/bbl, declining for the second day as near-record Iraqi output added barrels to a worldwide supply glut. Future prices however remain comfortably above their 200-day moving average of $44.02/bbl.
  • The euro area manufacturing PMI crept up to 51.7 in April, from 51.5, beating the expected figure of 51.5 as well. The ECB’s Mario Draghi said that, faced with a persistent output gap and too-low inflation, the central bank’s policy is stimulating the economy by steering market rates below long-term levels.
  • The Fed’s John Williams said that the future “new normal” for interest rates might be lower than the Fed’s median estimate.
  • The BOJ’s Kuroda said strong yen can have an unwelcome effect on the economy and that he is closely watching the market; yen however continues to strengthen, as USDJPY reached fresh lows of 106.05 this morning. Goldman Sachs said yen will keep appreciating near-term until BOJ has no choice but to respond with “overwhelming force”. Japan markets remain closed through Thursday, while most of Asia reopened today following a long weekend.



  • Spot 1.3401
  • USDSGD traded below the 1.3400 this morning, reaching its lowest levels since 21st Apr.
  • April’s PMI is set to be released later today and is expected to tick up to 49.5, from 49.4 last month.



  • Spot 0.7705
  • The RBA’s latest policy decision is set to be announced today, with slightly more than half of economists surveyed by Bloomberg expecting no change, with the rest predicting a 25bp cut.
  • AUDUSD rose as much as 1.0% today, reversing a 0.3%-drop earlier in the day. More Aussie dollar volatility is expected once the RBA releases its policy decision as traders and investors digest the news.



  • Spot 1.2507
  • USDCAD is currently trading near multi-month lows around the 1.2500 level. The next level of resistance comes in at 1.2368.
  • The RBC Canadian Manufacturing PMI for April rose to 52.2 from 51.5 the prior month, the highest since Dec 2014.
  • Finance Minister Morneau said that Canada will run into deficit in fiscal year 2015-16, despite the latest figures indicating a surplus.
  • Canadian government bonds ended their worst month in a year as investors switched bets to central bank rate-increases, from cuts, on signs of economic strength and a crude oil rally, Bloomberg reported.



  • Spot 6.4809
  • The PBOC set is reference rate at the strongest level this year at 6.4565 to the US dollar; USDCNH sank to 6.4743, its lowest in a more than a week.
  • Over the weekend, China’s official manufacturing PMI for April fell to 50.1, from 50.2 last month, and missed the estimated 50.3. Non-manufacturing PMI fell from 53.8 to 53.5.
  • The Caixin manufacturing PMI came in this morning at 49.4, falling from 49.7 the prior month and worse than the expected 49.8.



  • Spot 8.0123
  • April’s manufacturing PMI rose to 48.0, from 46.7, beating the median estimate of 47.8.
  • USDNOK extended its multi-month lows this morning, falling 0.6% to 8.0088. 8.0000 is expected to be a significant psychological level and the currency pair could pause for some support around said level.


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UEN: 201419754M

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