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05/16/2019

EUR/USD

The European currency showed ambiguous trading against the US dollar on Wednesday. The euro was under pressure from weak macroeconomic statistics from China, as well as ambiguous data from Europe. Industrial production in China in April slowed from +8.5% YoY to +5.4% YoY, which turned out to be worse than market expectations of +6.5% YoY. Retail sales for the same period increased by 7.2% YoY after rising by 8.7% YoY last month. Data from the euro area indicated GDP growth in Q1 2019 by 0.4% QoQ and 1.2% YoY, which coincided with expectations. Employment index for the same period remained unchanged. With the opening of the US session, the euro was supported by news that Donald Trump might postpone the decision to raise import duties on European cars.

GBP/USD

GBP declined significantly against USD on Wednesday, updating local lows of February 15. There was no interesting macroeconomic statistics in the UK yesterday, so investors focused on the prospects for the development of a trade conflict between the US and China, as well as on the situation around Brexit. Teresa May has not yet managed to reach a compromise with the Labor Party, so there is no hope for an early approval of the agreement on leaving the EU. However, it became known that the British Prime Minister is preparing to submit the existing version of the agreement to a vote in Parliament around the beginning of June.

AUD/USD

The Australian dollar is developing a downtrend against the US currency, updating local lows of the beginning of the year. The day before, instrument was pressured by the weak macroeconomic statistics from China, which once again reminded of the difficulties in the Chinese economy. During the Asian session on May 16, the instrument shows ambiguous dynamic in response to the publication of the April report on the Australian labor market on Thursday. Employment in April rose from 27.7K to 28.4K, which turned out to be noticeably better than market expectations of 14.0K. Unemployment Rate grew from 5.1% to 5.2%. The Employment rate rose due to a significant increase in private employment, while Full time employment in April showed a decline of 6.3K, after rising by 49.2K last month.

USD/JPY

The US dollar is trading in both directions against the Japanese yen, staying close to the local lows updated at the beginning of the week. The demand for yen is supported by the low interest in risk-taking, but overall trading activity remains low. Pressure on the Japanese currency yesterday was put by data on the Machine tool orders. According to preliminary estimates, in April, the figure fell by 33.4% after declining by 28.5% in March. During the Asian session, the yen is trading in both directions again. Investors are focused on a block of statistics from Japan. Stock investments by foreigners for the week as of May 10 reduced from 640.1B to 282.5B yen. Foreign bond investments increased from –257.0B to 20.8B yen.

Oil

Oil prices are rising moderately, recovering to local highs of the end of April. The quotes are supported by tensions in the Middle East after Saudi Arabia’s statements about the attacks on their oil production sites and tankers off the coast of the United Arab Emirates. A more confident increase in prices on Wednesday was hampered by the report of the US Department of Energy on oil reserves. For a week as of May 10, oil stocks in US warehouses increased by 5.431M barrels, after a decrease of 3.963M barrels over the past period. Analysts had expected negative dynamics to remain at –0.800M barrels. At the same time, the report again reflected a decline in oil production from 12.200M to 12.100M barrels per day.

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