Last week in the US there was a massacre. On Wall Street, futures tracking the Nasdaq 100 surged 7.3%, the best 5-day performance since March. This is as S&P 500 and Dow Jones futures gained 6.8% and 6.4% respectively, the most since November 2020. Things were also looking good in Europe where the DAX 40 climbed to 3.4% and in Asia the Hang Seng Index pushed up 2.89%.
In the Forex marker last week, all G10 currencies outperformed against the US Dollar, including the New Zealand Dollar, Australian Dollar, Euro, British Pound, Canadian Dollar, and Japanese Yen. The US Dollar Index is down 1.32% over the past two weeks, the most since April 2021.
In the week ahead, all attention will be on the US Non-Farm Payrolls on Friday. On Monday the US will be on holiday due to Memorial Day. The Bank of Canada is expected to deliver a 50-basis point rate hike on Wednesday and Australia will release its first-quarter GDP figures. China will also be closely watched for its May manufacturing PMI data.
Lastly in the EU the data can explain the increasingly hawkish view across policymakers. German inflation is expected at 7.6% y/y in May from 7.4% prior. This is as Euro Area unemployment is seen falling to 6.7% in April from 6.8% prior.
Last week, the Euro jumped by 1.62% to $1.0735. We are neutral this week as there are a lot of European news releases scheduled for next week.
Resistance: 1.0750, 1.0700, 1.0750
Support: 1.0700, 1.0650, 1.0600
For the British Pound It is a quiet week ahead, with data limited to finalized manufacturing PMI numbers for May. We are Neutral on the pair.
Resistance: 1.2650, 1.2700, 1.2750
Support: 1.2600, 1.2550, 1.2500
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