Weekly EUR/USD Outlook: 2017, April 30 - May 07 (based on the article)
EUR/USD jumped higher on the favorable results of the French elections. PMI and GDP data stand out in the first week of May, in the run up to the second round of the French elections.
Weekly Fundamental Forecast for Dollar Index (based on the article)
Dollar Index - "The Fed’s own Beige Book survey of regional economic conditions remained optimistic even as data flow increasingly underperformed relative to consensus forecasts. If this foreshadows a sanguine attitude in the FOMC policy statement, the greenback is likely to advance. Further, the market-moving potential of soft data outcomes will be diminished. That may dull the pain of disappointment if April’s payrolls figures also fall short of expectations. However, the same outcome will probably sink the currency if the Fed sounds concerned and looking for reasons to backpedal."
Weekly Fundamental Forecast for USD/CAD (based on the article)
USD/CAD - "Next Friday brings us Canadian payrolls data for April. Canadian employment added 19.4k jobs in February, surpassing expectations and causing the CAD to edge higher. Before this, on Thursday, Bank of Canada Governor Stephen Poloz will be speaking in Mexico."
Weekly Fundamental Forecast for GBP/USD (based on the article)
GBP/USD - "The marked slowdown in private-sector consumption, one of the leading drivers of growth and inflation, may prompt the central bank to revisit its economic assumptions as officials warn ‘market-based measures of inflation compensation had remained low; survey-based measures of inflation compensation were little changed on balance.’ Moreover, NFPs may continue to fall short of market expectations as the labor market appears to be at or near full capacity, and a series of dismal developments may fuel the relief rally in GBP/USD as market participants push back bets for the next Fed rate-hike."
Weekly Fundamental Forecast for AUD/USD (based on the article)
AUD/USD - "All up then, this week looks like a neutral one for the Australian currency, albeit one within a broader AUD/USD downtrend. For most likely risk events, there’s a countervailing chance of some support from elsewhere, although the hair-trigger geopolitics of the moment could mean that all bets come off at any point."
Weekly Fundamental Forecast for GOLD (XAU/USD) (based on the article)
XAU/USD - "The FOMC rate decision is on tap next week and although the central bank is widely expected to leave policy unchanged, traders will be looking for changes in the statement as Yellen & Co look to prep markets for upcoming adjustments to the benchmark interest rate. Improving labor market metrics (save last month’s off-beat miss) and a 2% read on 1Q Core PCE (Personal Consumption Expenditure) on Friday will continue to put pressure on the Fed to further normalize policy. As it stands, markets are pricing 1-2 additional hikes this year with Fed Fund Futures noting a 67% likelihood of a June hike. That said, for gold the emphasis will remain on the timing and scope of future rate increases. Remember that higher interest rates will tend to weigh on non-yielding assets such as gold."
Weekly Fundamental Forecast for USD/CNH (based on the article)
USD/CNH - "While the Chinese Yuan traded in a range, Chinese equities have been on a wide ride since the launch of a Special Economic Zone at the beginning of April. Shanghai Composite Index dropped -1.37% this Monday following a -2.25% loss last week. We discussed that it is not uncommon that Chinese investors rush to buy stocks on news and then sell them after a short holding period. Chinese stock market may not directly impact the Chinese Yuan, but it reflects the financial stability of the country. In January 2016, when the newly introduced circuit-break system caused chaos and a big selloff in the equity market, the fear eventually spread to the FX market and led to investors rushing to get rid of Yuan-denominated assets. As a result, keeping an eye on the Chinese equity market when it becomes volatile may help FX investors to manage risks."
Weekly Fundamental Forecast for S&P 500 (based on the article)
S&P 500 - "Looking ahead, Monday may be relatively quiet with major financial centers in Europe closed for holiday. In terms of scheduled ‘high’ impact data events, we have Core Personal Consumption Expenditure (PCE) and ISM Manufacturing on Monday; and the big event of the week coming on Friday when the April jobs report is due out. The market will be looking for a strong rebound in NFPs (+180k estimate) after the big miss in March of only +98k."
Weekly Fundamental Forecast for DAX Index (based on the article)
DAX Index - "Following last Monday’s surge, the DAX did a whole lot of nothing, trading bullishly quiet. Meaning, a market which doesn’t quickly begin retracing a large gain has an increased likelihood of making another push higher, sooner rather than later. Maintaining above the prior highs at 12375/91 is the most bullish scenario, with leniency towards testing the gap-day low of 12289. Should the market fall back into the gap, though; risk will quickly rise of seeing it fill back down to 12048. At this time, we look for the market to hold and push higher. Looking higher, resistance first arrives at last week’s high of 12486, the August 2016 top-side trend-line, and then the trend-line running over peaks since late-February."
Weekly Fundamental Forecast for FTSE 100 (based on the article)
FTSE 100 - "To start the week, the market will be closed in observance of ‘Early May Bank Holiday’. Once trading resumes on Tuesday it is likely participants will take cues from any significant weekend headlines, and how markets unfold in Asia and the U.S. It’s a very quiet week on the economic data front."