May 6 Monday 11:45 GMT
by Daren Walker Market News International
By Darren Walker
LONDON (MNI) - EURO SUMMARY: Euro-dollar pressed to lows of $1.3033 on
release of better than expected Non-Farm Payrolls on Friday. Support in the dip
cushioned before euro-yen demand boosted sentiment, strong equity markets
extended gains and the rate gapped to $1.3159, later easing to close in NY at
$1.3115. Risk appetite continued into early Wellington trade with euro-dollar
lifting to $1.3141, flushing light stops on the move. Euro-yen sales stalled and
the rate pared light gains to settle in a tight $1.3115-25 Asian range.
Euro-dollar opened heavy in thin European trade and made a show under $1.3100,
flushing stops to print a low of $1.3093. Strong demand in the euro crosses
cushioned and provided added momentum taking the rate to $1.3110. Well received
PMI Services data across the eurozone extended to $1.3120, before rate pared
gains to settle in a tight $1.3110/20 range. On the downside bids seen at
$1.3080 ($1.3076 (21-day ma), stronger behind at $1.3050. The Asian high at
$1.3141 caps the topside, a break opens offers into $1.3150.
STERLING SUMMARY: Cable tracked euro-dollar moves in NY Friday. The rate
initially pressed to $1.5479 on release of strong Non-Farm Payrolls, before the
pair bounced and extended the recovery to $1.5601. Technical resistance stalled,
profit take sales added weight as the pair closed in NY at $1.5570.
Euro-sterling recovered off pullback lows of stg0.8406 to close at stg0.8425.
Cable opened in Asia on a bid tone and lifted to highs of $1.5599, the rate met
strong supply ahead of $1.5600 easing back with euro-dollar to settle around
$1.5575/85. Sterling was unable to consolidate and opened on the defensive in
early Europe, initially dragged lower by euro-dollar the rate extended losses on
sharp euro-sterling demand to $1.5558. Recovery attempts seen shallow with the
5-day ma providing first support at $1.5556, a break opens bids into $1.5550,
ahead of key techs at $1.5543 (100-day ma). Euro-sterling slipped to stg0.8413
before strong demand cushioned, extending the recovery through the overnight
high to stg0.8431, later paring light gains. The 5-day ma seen capping the
topside at stg0.8440, offers behind at stg0.8450.
YEN SUMMARY: Dollar-yen spiked from Y97.95 to Y99.06 on release of stronger
than expected Non-Farm Payrolls Friday, which came in above market consensus at
165,000 vs 145,000. Strong cross demand extended gains to Y99.27 before supply
from sovereign names stalled, briefly taking the rate back under Y99.00. Tight
range trade continued as the dollar consolidated gains, closing in NY at Y99.05.
Euro-yen printed highs of Y130.34, before easing with the dollar to close at
Y129.90. Dollar-yen gapped higher on the Asian open to Y99.21 as Asian markets
reacted with relief to Sunday's election outcome in Malaysia. Supply from
corporate names pared light gains and with Japanese markets closed today the
rate settled in a narrow Y99.05/10 range. Euro-yen lifted to highs of Y130.27
before it too pared gains slipping in tandem with the dollar. Yen was under
pressure in early Europe with the dollar lifting to Y99.15, rate extended to
Y99.25 before Asian directional sales briefly stalled. Fresh demand emerged
taking the rate through CTA stops and Friday's NFP spike high to print Y99.45.
Euro-yen lifted to Y130.41, before profit take sales eased to Y130.10,
Across the pond, at 1230GMT, Canadian data sees the release of the March
building permits data.
At 1300GMT, ECB President Mario Draghi is slated to speak in Rome, with
ears open to any nuances following the rate cut last Thursday.
Across the pond, the limited US calendar starts at 1330GMT, with the
release of the MNI Capital Goods Index for the May 3 week, followed by the MNI
Retail Trade Index for the May 4 week at 1430GMT.