· The euro held firm in early Monday trade after pro-European Union parties withstood more fragmentation than before to hold on to two-thirds of seats in the EU parliament elections, limiting gains in nationalist opponents.
The common currency traded at $1.1211 in Asian trade, near its highest levels in 1 1/2 weeks, and off a two-year low of $1.11055 touched on Thursday.
Trading was seen subdued on Monday due to market holidays in London and New York, limiting moves in other currency pairs.
“It looks like pro-EU parties still have a majority. To be sure, we see a rise of anti-EU parties in some countries but it is not like they are winning an outright majority,” said Minori Uchida, chief currency analyst at MUFG Bank.
“I’d expect markets’ focus to shift back to U.S.-China relations,” he said.
· The U.S. currency traded at 109.45 yen, up 0.15%, underpinned by Japanese players’ bargain-hunting.
Still, the U.S. currency is not far from a three-month low of 109.02 touched two weeks ago, hit amid worries about escalating tensions between Washington and Beijing over trade and technology.
The dollar has been also capped against the yen as U.S. President Donald Trump is seen putting pressure on Japan to take measures to reduce its trade surplus with the United States.
· EUR/USD US economy slowdown, that create for EUR/USD potential for uptrend to resistance 1.1230 and then 1.1300.
· USD/JPY is reporting modest gains this Monday morning in Asia, having registered losses in the previous three trading days. USD/JPY is flashing green amid reports of eurosceptic parties gaining ground in EU elections.
The USD/JPY pair daily chart offers a bearish perspective, as the pair plunged below all of its moving averages, and the 20 SMA heads south, having crossed the 100 SMA. Technical indicators lost upward strength after nearing their midlines, heading lower with uneven strength, anyway leaning the risk to the downside. Shorter term, and according to the 4 hours chart, the bearish potential is much firmer, as the price is well below bearish moving averages, while technical indicators accelerated their declines near oversold readings. The pair is poised to re-test the 109.00 level, as long as it remains below 109.65, the 61.8% retracement of the latest daily advance and the immediate resistance.
Support levels: 109.00 108.65 108.30
Resistance levels: 109.65 109.90 110.20
· Bitcoin surged on Monday, hitting a more-than-one-year high and nearing the $9,000 mark.
The price of the digital coin hit an intraday high of $8,937.25, according to Coindesk’s Bitcoin Price Index, which tracks the price of the cryptocurrency across several exchanges. That was the highest level since an intraday high on May 11, 2018.
At around 9:50 a.m. HK/SIN on Monday, bitcoin was up over 9% in 24 hours and was trading around $8,788.87.
The cryptocurrency has seen a renewal of interest in the past few weeks and its price is up over 140% so far this year.
There has been an increase in major companies experimenting or bringing out cryptocurrency-related products. For example, Taiwanese phone maker HTC released a phone focused on helping people store their digital coins, while Facebook is reportedly working on its own cryptocurrency.
· China and America’s trade war looks more and more like a tech war, and the United States appears to be widening its focus on to another category of Chinese technology: surveillance.
The U.S. may put Chinese surveillance equipment company Hikvision on a blacklist that would limit its ability to acquire American components — expanding the tech rivalry between the countries and even bringing attention to the ways China monitors its own people.
Hikvision is one of the world’s largest makers of video surveillance products. If Washington goes ahead with the penalties, U.S. firms will be required to obtain a government license to sell equipment to Hikvision, the New York Times reported, citing people familiar with the matter. The Times noted that the Trump administration sees China as an economic and geopolitical threat, but added that there are concerns about China’s “extensive surveillance industry.”
· Tan Min Lan, Asia-Pacific head of chief investment office at UBS Global Wealth Management, predicted that any deal between the U.S. and China will likely only come “just before 2020.”
“It’s quite clear that trade tensions have re-escalated and at this point in time, there isn’t enough pain on either side for a deal to be imminent,” Tan told CNBC’s “Street Signs” on Monday. “If you look at United States, actually the economy is quite strong ... On the China side, we know that it is able to at least stabilize the economy.”
· The EU Parliament will be much more fragmented over the next five years with the established centrist bloc set to fall short of securing a majority at this week’s election, early results show.
The current projection from the European parliament is that center-right and center-left blocks will end up with a total of 329 seats out of 751.The lack of a majority for the centrist bloc — the center-right European People’s Party (EPP) and the center-left Socialist and Democrats (S&D) which has held power in Brussels for several decades — could further complicate decision-making at the European Union.
Pro-EU parties will hold onto two-thirds of the seats at the EU Parliament, but their nationalist opponents have also produced solid results.Italy’s anti-immigration Lega party has reportedly secured 28 seats, essentially doubling its level of national support.
Euroskeptic groups in France and the U.K. look to have held the gains they saw in 2014 but that said, the results on Monday morning suggested a strong showing for Liberal and Green parties.
In France, Marine Le Pen’s euroskeptic National Rally topped the European election vote, winning 22 seats, narrowly beating the centrist alliance of President Emmanuel Macron which won 21.
Projected results in the U.K. showed the newly-formed Brexit Party had comfortably beat the country’s two main parties, with voters expressing their frustration over deadlock in Westminster.
· Reuters reports the recent comments delivered by the Bank of Japan (BOJ) Governor Kuroda at the T20 Summit. Kuroda delivered a speech titled “Global Economy: Challenges and Policy Responses”.
Key Points:
“Uncertainties remain high for the global economy.”
“G20 will intensively discuss global imbalances.”
He did not touch upon the topic of monetary policy.
· U.S. National Security Adviser John Bolton is “inordinately ignorant” to argue that North Korea’s recent missile tests violated United Nations resolutions, the North’s foreign ministry said in a statement carried by state media on Monday.
A statement issued by state news agency KCNA quoted a foreign ministry spokesman as saying that giving up missile tests would mean giving up the right to self defense.
The spokesman singled out Bolton, who last week said the recent tests “no doubt” violated U.N. resolutions. Bolton, a regular target of North Korean criticism, is working more to destroy peace and security than maintain security, the spokesman added.
· U.S. President Donald Trump pressed Japanese Prime Minister Shinzo Abe on Monday to even out a trade imbalance with the United States and said he was happy with how things were going with North Korea.
Trump, at a news conference with Abe after a summit, said his goal was to remove trade barriers to put U.S. exports on an equal footing in Japan. He said he hoped to have more to announce on trade very soon and said the two had agreed to expand cooperation in human space exploration.
Abe, for his part, said the two leaders had agreed to accelerate two-way trade talks.
· Despite his tweet that tough negotiations can wait until after the election in Japan, “the stocks market may react negatively if he shows a harsh attitude towards the Japanese auto sector” at the summit talks with Abe, Hirokazu Kabeya, chief global strategist at Daiwa Securities, said in a commentary.
“It’s necessary to keep paying attention to the China-US (trade) talks” this week.
· Oil prices rose on Monday as ongoing supply cuts led by producer club OPEC kept markets relatively tight, but Brent remained below $70 per barrel on concerns over an ongoing trade war between the United States and China.
Front-month Brent crude futures, the international benchmark for oil prices, were at $69.10 per barrel at 0021 GMT, up 41 cents, or 0.6 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 10 cents, or 0.2 percent, at $58.73 per barrel.
Money managers cut their net long U.S. crude futures and options positions in the week to May 21, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.
“Some signs of low confidence are creeping into positioning data,” Analysis said.
· WTI crude oil: while market is trading below resistance 60.90 – 61.40, market have downtrend with target on support level 54.10.
Reference: CNBC, Reuter, FX Street
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