Key overnight events:

  • The S&P 500 Index advanced 0.4% on Friday to cap of a 2.3% gain for the week. Volume was light ahead of holidays in the UK and US today, as bank shares rebounded along with bond yields to lead gainers. The US dollar continued to strengthen as the Bloomberg Spot Dollar Index rose 0.5% to round off a 0.4% gain for the week; the dollar gauge climbed further this morning to its highest since 16th Mar.
  • Fed Chair Janet Yellen said on Friday that a rate increase may be appropriate in “coming months”, throwing her support behind a growing consensus at the central bank in favour of another rate hike soon and defying expectations for a noncommittal or dovish tone.
  • The US grew an annualized 0.8% in the first quarter this year, improving from a 0.5% growth the previous quarter; the median estimate was a 0.9%-growth. Core PCE over the same period rose by 2.1% quarter-on-quarter, matching estimates.
  • Crude oil futures expiring in July slipped 0.3%, after reaching the $50/bbl handle the previous day; it was up 1.9% for the week. Canadian energy producers have moved to resume operations after wildfires eased while OPEC is set to meet later this week.
  • An aide for Japan Prime Minister Abe stressed the need to postpone the country’s sales-tax hike to 2019. Nikkei news reported that the delay is expected to be announced on Wednesday. A sales-tax hike delay could boost stocks and is likely to trigger an election, Bloomberg reported.



  • Spot 1.3818
  • USDSGD ended Friday down 0.2% for the week, but started off strongly today as the currency pair climbed 0.3% to test the 100-day moving average of 1.3832.
  • If the US dollar continues to strengthen, a run up to the 1.3900 handle for USDSGD is probable.



  • Spot 0.7165
  • AUDUSD closed the week down 0.6%, its fifth straight weekly decline. The Aussie dollar weakened further his morning, trading 0.5% lower against the US dollar to 0.7149.



  • Spot 1.3080
  • USCAD fell 0.7% for the week, despite notching a gain of 0.6% on Friday back above the 1.3000 handle. The currency pair further extended gains this morning by 0.6% to 1.3092.
  • As expectations of policy divergence between the US and Canada continue to grow, the upside risk for USDCAD continues to outweigh the downside; the next important resistance likely to be tested comes in around 1.3450.



  • Spot 6.5880
  • USDCNH has risen 7 out of the past 8 weeks, advancing 1.6% since early April. Gains were extended this morning as the currency pair climbed 0.2% to 6.5904 – the highest in almost 4 months.
  • The PBOC weakened its reference rate today by 0.45%, its lowest in 3 months.
  • The end of a temporary sweet spot that China enjoyed with its exchange rate – strength versus the US dollar and weakness against trading partners, will spur renewed capital outflows, Goldman Sachs said. As a result, Goldman expects Beijing to start clamping down on money leaving the country.



  • Spot 8.3512
  • USDNOK ended the week almost unchanged at 8.3366, 0.1% higher.
  • Oil and gas companies operating in Norway have cut 2016 investment forecasts further and signalled spending could drop for a third consecutive year in 2017, Statistics Norway said in a quarterly survey of oil companies.
  • Given Norway’s weak outlook and potentially further strength in the US dollar, USDNOK carries a risk to the upside with the 200-day moving average of 8.4698 a possible target.
  • 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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