Forex News

Eurostoxx flatGermany DAX +0.2%France CAC 40 -0.1%UK FTSE -0.1%Spain IBEX flatItaly FTSE MIB +0.1%The overall risk mood is keeping steadier, with S&P 500 futures seen up 0.16% currently. There's not too much action in the major currencies space as well, with the dollar keeping mostly rangebound against the others. USD/JPY did dip lower to 146.85 earlier but is now holding around 147.07 - down 0.2% on the day. This article was written by Justin Low at www.forexlive.com.

Goldman Sachs is now seeing the Stoxx 600 index hitting a target of 570 in the next 12 months - up from 520 previously. Meanwhile, they are also seeing the UK FTSE hit a target of 8,800 in the next 12 months now - up from 8,500 previously. This article was written by Justin Low at www.forexlive.com.

Prior +2.3%HICP +2.2% vs +2.2% y/y prelimPrior +2.2%Core annual inflation is seen nudging higher to 2.4%, up from 2.0% in March. So, that's another thorn in the side to the ECB with the German report indicating the same trend. This article was written by Justin Low at www.forexlive.com.

We have an empty calendar today on the data front, so at best the focus will be on central bank speakers as we try to gauge their next moves following the recent developments on the trade front.The most important one should be Fed's Waller, who recently become one of the most dovish members. He laid out two scenarios last month. In the first scenario, the average global tariff rate would be above 20% and he would be willing to look through inflation and cut rates on a slowdown in the economy.In the second scenario, the average global tariff rate would be 10% and he would be willing to hold rates steady for longer and cut in the latter half of the year.The second scenario is what is playing out and it will be interesting to hear whether he confirms that and switches back to a more hawkish stance. Remember that the market is sensitive to Waller's views because he acted as a leading indicator for Fed's policy since 2021.Central bank speakers:07:15 GMT/03:15 ET - BoE's Breeden (neutral - voter)09:15 GMT/05:15 ET - Fed's Waller (dove - voter)12:40 GMT/08:40 ET - ECB's Cipollone (dove - voter)13:10 GMT/09:10 ET - Fed's Jefferson (neutral - voter)21:40 GMT/17:40 ET - Fed's Daly (neutral - non voter) This article was written by Giuseppe Dellamotta at www.forexlive.com.

German DAX futures -0.1%UK FTSE futures -0.3%This follows from the solid showing in Wall Street again, with dip buyers turning things around in US trading. The S&P 500 has now turned positive on the year as Trump continues to talk up the market. He said yesterday that "the market will go higher". For now, the overall risk mood is calmer with S&P 500 futures up just 0.1% currently. This article was written by Justin Low at www.forexlive.com.

Prior +2.2%HICP +2.2% vs +2.2% y/y prelimPrior +2.3%The downside to the report is that core annual inflation is seen ticking higher again to 2.9%. That is up from 2.6% in March. It's a bump in the road and acts as thorn in the side to the ECB in pursuing further rate cuts. That especially as global trade developments look to stabilise for a bit. This article was written by Justin Low at www.forexlive.com.

However, not to the US though. One of the sources said that the permits were issued to suppliers for customers in Europe and Vietnam. As a reminder, China stepped up their rare earth export controls by restricting a further seven minerals last month here.It is reported that there is at least four permits granted in this latest batch. Baotou Tianhe Magnetics is one of those suppliers who received a license for Volkswagen in late April. The supplier is one which makes the magnets used in electric and hybrid car motors. But the sources say that Volkswagen had reached out to Beijing for help in trying to make that happen.Typically, it takes about two to three months for China to filter through requests for the permits. And since imposing the added restrictions last month, this batch of permits are the first ones to be granted. But again, it doesn't seem like any US clients are part of the list whatsoever. And I wouldn't expect that to change unless there is some real progress during this 90-day negotiation timeline.Even if export controls fall short of an outright ban, it's safe to say that there is an unofficial ban for exporting to the US for the time being. This article was written by Justin Low at www.forexlive.com.

The dollar was the laggard in trading yesterday as it surrendered a large chunk of the gains from Monday. And that comes despite a continued bid in equities and with Treasury yields pushing higher as well. The latter is going to be a key focus as long-end yields are starting to near the April highs again. Traders look to be turning their attention to the deficit and tax cuts as we buy a bit of reprieve from trade drama.Going back to the dollar though, it struggled despite the conditions in broader markets. One can point to the US CPI report yesterday being cooler than expected. But again, remember that we haven't seen any major impact from tariffs just yet. In any case, the dollar lost modest ground and we're now starting to see near-term technical levels get called into question:EUR/USD is less than 0.5% down from the close on Friday as it nudges back towards the 1.1200 level. That now brings up a test of the 100-hour moving average (red line) at 1.1197. Break above that and the 1.1200 level and the near-term bias switches back to being more neutral. Hold below and the near-term bias keeps more bearish instead.So, that's a key test of resolve for dollar buyers as we approach mid-week.Besides that, USD/JPY is also trading more sluggishly as it is starting to test waters below 147.00. Its own 100-hour moving average is seen at 146.45 currently and that will be one to watch if the dollar continues to sag. That said, there is some balancing act for the pair here with yields continuing to chase higher.Elsewhere, GBP/USD has already recovered its opening gap lower from the start of the week to return above 1.3300. It is the same for AUD/USD as well with the pair now up to 0.6475 on the day. In the case of the aussie, another test of 0.6500 looks to be beckoning and a breakout there could lead to stronger gains in the second half of the week. This article was written by Justin Low at www.forexlive.com.

Fitch Ratings says Australia's banks' results show resilienceBank of England Wednesday - two Pills and a BaileysChinese internet giant Baidu preparing to test driverless ride-hailing service in EuropeChinese company linked to TikTok bought $300,000,000 of $TRUMP CoinBrazil’s Lula: Want to create a currency that does not make us dependent on one currencyAustralian Q1 wage price index +0.9% q/q (expected +0.8%)Lula: Brazil strengthening relations with China: Brazil not afraid of US retaliationTrump says the relationship with China is excellentPBOC sets USD/ CNY mid-point today at 7.1956 (vs. estimate at 7.1813)South Korea unveils $3.25 billion lifeline for small firms facing U.S. tariff threatTether purchased more than 4,800 Bitcoin at average US$95,319Recapping Japan April wholesale inflation - cost of inputs not a lot changedTrump accepts Qatar plane "will be used by our Government as a temporary Air Force One"Japan data - April PPI +0.2% m/m (expected +0.2%) & +4.0% y/y (expected +4.0%)UBS downgrades US equities to Neutral, but 12 month view is for higherSouth Korea April unemployment rate 2.7% (expected 3%, prior 2.9%)New Zealand retail sales indicator, April: -0.3% y/y (prior -1.6) & 0.0% m/m (prior -0.8%)Trump views "equity market performance as a real time barometer of his performance"ICYMI - Goldman Sachs forecasts S&P 500 as high as 6500Iran wants 'concrete guarantees' before reaching an agreement with the USIran and Europe will meet on FridayHassett says when Trump returns he'll announce the next trade dealOil: private survey of inventory shows headline crude oil build vs draw expectedS&P is positive on the yearForexlive Americas FX news wrap: US dollar sellers return after lower CPIFinancial Times reports that China has criticized the trade deal between the US and UKWhat's driving Tesla's rise?NZDUSD climbs after sellers miss their shot at breakdownTrade ideas thread - Wednesday, 14 May, insightful charts, technical analysis, ideas News and data flow was fairly light during the session.It began with a surprise build in crude inventory showing in the private (API) survey. Oil has dribbled a little lower during the session with the large draw cited as a contributor. Official US government inventory data will follow mid-morning on Wednesday in the US. From Japan we had wholesale inflation data. The April PPI came in as expected and down a touch from March. The slightly stronger yen helped ease imported inflationary pressure but fuel and rice prices remained high. Japan's government has released rice from its strategic reserve but price decline is slow to filter through.USD/JPY ticked up just a little after the data but soon reversed. Highs were around 147.65 and the trek lower took the rate to circa 147.01. The Bank of Japan bought back 20bn yen in JGBs.The People’s Bank of China continued to mark the onshore yuan stronger, setting it at its highest against the USD (ie the lowest for USD/CNY) since April 3 at 7.1956, well under the psychological 7.2 level. Trump crossed the wires with a few comments in a Fox interview but with nothing to move markets around. He defended accepting the free plane from Qatar to be used as Air Force 1 in a social media post. News crossed also that a Chinese company linked to TikTok bought US$300,000,000 of TRUMP Coin. From Australia we had Q1 wages data, the 0.9% q/q rise was above the 0.8% consensus expectation but matched the Reserve Bank of Australia's forecast. The RBA is expected to cut its cash rate at its meeting on May 19-20. The data today, having hit their target, is unlikely to stop that cut. This article was written by Eamonn Sheridan at www.forexlive.com.

Fitch Ratings' says Australia's banks' results show resilience and support their current ratings. In brief:expect earnings headwinds to continue for Australian banks in 2025earnings are likely to be broadly stablenet interest margins (NIM) are likely to contract further in 2025 and 2026 as interest rates are cut .. the impact should be limited ... competition is also likely to weigh on NIMsasset quality showed signs of stabilising in 1HFY25prudent capital positioning amid heightened global uncertaintyfunding metrics broadly stableliquidity levels remained strong, further cushioning against global economic uncertainties This article was written by Eamonn Sheridan at www.forexlive.com.

The times below are in GMT/US Eastern time format. Bank of England Chief Economist Huw Pill appears twice, Bank of England Governor Andrew Bailey later.0845/0445 Bank of England Chief Economist Huw Pill delivers speech at London School of Economics1000/0600 Bank of England Chief Economist Huw Pill takes part in a panel discussion on economic policy with former BoE policymakers at a conference at the London School of Economics1500/1100 Bank of England Governor Andrew Bailey speaks in AmsterdamBank of England Governor Bailey This article was written by Eamonn Sheridan at www.forexlive.com.

Wall Street Journal with the report, gated, citing people familiar with the matter. In brief:Baidu is preparing to test its driverless ride-hailing service, Apollo Go, in Europe for the first time. Baidu is in talks with Switzerland’s PostAuto to launch Apollo Go and plans to launch in Turkey amid rising domestic competition. Autonomous-driving companies are seeking to monetize their tech via ride-hailing; robotaxi services may face regulatory challenges in Europe.Baidu plans to set up a local entity in Switzerland in the coming months and start testing the technology by the end of this year, the people said. This article was written by Eamonn Sheridan at www.forexlive.com.

Brazil’s Lula: We want to create a currency or a group of currencies that do not make us dependent on one currency.Earlier:Lula: Brazil strengthening relations with China: Brazil not afraid of US retaliationChina’s foreign minister meets Brazil counterpart in BeijingChina is building megaports in South America to feed its need for crops This article was written by Eamonn Sheridan at www.forexlive.com.

Australian Q1 2025 wage price index +3.4% y/y 3.2% was expected, prior +3.2%+0.9% q/qexpected +0.8%, prior +0.7%Wage growth in Australia is still robust. the Reserve Bank of Australia has expressed concern, over and over, that inflation may not have beaten yet. Wage growth is a factor in their reasoning, an important one. The Bank meets on May 19 and 20. I doubt this data will dissuade them from the expected 25bp cash rate cut. --Also published were home loans data:Australia Home Loans Value -1.6% q/qexpected flat at 0.0%, prior +prev 1.4%Investment housing finance -0.3% q/q while owner-occupier housing finance -2.5% q/q--AUD update, tiny jump but now back to barely changed at all: This article was written by Eamonn Sheridan at www.forexlive.com.

Brazil’s Lula: We want China to help us to make the technological progress we need Brazil is not worried about the impact of US-China trade agreement on Brazilian exports to Chinaon Brazil strengthening relations with China: Brazil is not afraid of potential US retaliationChina and Brazil are getting closer:China’s foreign minister meets Brazil counterpart in BeijingChina is building megaports in South America to feed its need for crops This article was written by Eamonn Sheridan at www.forexlive.com.