FOMC SPEAKERS HEADLINE SLOW MONDAY SESSION
Holidays in Europe and Canada make for a relatively quiet trading session on Monday. Traders who are active will be keeping tabs on a series of Federal Reserve speeches scheduled in the North American session.
The European Union will release its Financial Stability Review at 08:00 GMT. The biannual publication provides an overview of the region’s financial health, highlighting risks and vulnerabilities facing the Eurozone’s banking sector.
Shifting gears to North America, the Federal Reserve Bank of Chicago will release the National Activity Index at 12:30 GMT. The monthly report is designed to gauge overall economic activity in the world’s largest economy. The April reading is forecast to come in at 0.14, up slightly from the previous month’s 0.10.
Three members of the Federal Open Market Committee (FOMC) are scheduled to deliver speeches during the North American session, beginning with Raphael Bostic at 16:15 GMT. Patrick Harker will deliver remarks at 18:05 GMT followed by Neel Kashkari at 21:30 GMT.
Fed policymakers voted against raising interest rates at their most recent meeting earlier this month. However, officials are widely expected to hike interest rates by a quarter point at their upcoming policy meeting in June. A sizable minority of traders believes the Fed will hike interest rates three more times this year to combat inflation. Most forecasts suggest two more upward adjustments are coming in 2018.
Despite a slow start to the week, the economic calendar features a deluge of market-moving events beginning on Wednesday. Eurozone PMI, British inflation and US durable goods orders are just some of the biggest market-moving events scheduled. The minutes of the May 1-2 FOMC meeting are also due to be released on Wednesday.
Europe’s common currency is coming off another disappointing week, as prices resumed their general downtrend. EUR/USD bottomed at 1.1761 on Friday as the US dollar continued to strengthen against a basket of world peers. The pair fell again at the start of Asian trading on Monday. Immediate support is located at 1.1740. On the flipside, resistance is likely found at 1.1800.
Cable continued to drift lower last week, as a stronger US dollar provided strong headwinds. GBP/USD traded around 1.3480 in Asia, having declined 0.3% from the previous close. Immediate support levels include 1.3450 and 1.3410. On the opposite side of the spectrum, resistance levels are likely found at 1.3490 and 1.3520.
The USD/JPY is coming off a strong week of gains, as prices briefly surpassed 111.00 for the first time since mid-January. The pair is likely to enjoy support at the beginning in the interim after China and the United States agreed not to engage in a trade war. USD/JPY traded around 110.82 in Asia on Monday.