Action Insight Mid-Day Report 5-1-29

Dollar Ignores Strong ADP, Drops on Weak ISM, Looks to Fed for Rescue

Action Insight Mid-Day Report 5-1-19 Dollar Ignores Strong ADP, Drops on Weak ISM, Looks to Fed for Rescue Economic data released from the US are mixed today. ADP report shows much stronger than expected growth in private sector jobs. However, ISM manufacturing points to deep cool down in the manufacturing sector, with deteriorating new orders, prices and employment. Dollar chooses to react to the negative one and suffers steep selling after ISM. 10-year yield also tumbles pass 2.5 handle to as low as 2.475. But stocks are relatively steady. In the currency markets, European majors are generally the strongest ones today, led by Swiss Franc. Sterling shrugs off decline in UK manufacturing PMI. At this point, commodity currencies are the weakest, lead by New Zealand Dollar, which is pressured by weak job data. Dollar is mixed but is vulnerable for deeper selloff. The greenback will need something upbeat from Fed chair Jerome Powell to halt the decline. Technically, 1.0130 in USD/CHF will be an immediate focus now. Decisive break will at least confirm short term topping and bring deeper pull back. USD/JPY's fall might accelerate should treasury yield dips further. Break of 110.84 support will add to the case of bearish reversal. GBP/USD has already confirmed short term bottoming yesterday. While EUR/USD is held well below 1.1324 resistance, it's starting to look a bit vulnerable for stronger rally. Full Report Here ISM manufacturing dropped to 52.8; New orders, prices, employment declined Into US session: Europeans higher, commodities lower, Dollar mixed ahead of... US ADP employment grew 275k, service sector strong ECB de Guindos: Interest rates to stay low even once monetary... EU Katainen: Situation of British in European Parliament before Brexit looks... US Mnuchin concluded productive trade meetings with China Liu, next round... UK PMI manufacturing dropped to 53.1, pre-Brexit stockpiling continues with solid... Dollar to listen to Powell's comments on growth in inflation, some... Australia AiG PMI improved to 54.8, but employment and wage indices... New Zealand employment dropped -0.2% qoq in Q1, NZD dips China to open up banking and insurance sectors as new round... Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol BOE Preview: Looking Through Strong First Quarter, with Focus on Softer... FOMC Preview -Fed to Reiterate Patience Rhetoric Despite Strong First Quarter... Worsening Inflation, Dovish Central Banks and Falling Treasury Yields Central Bank Views | China Watch | Oil N' Gold | Special Topics USD/CHF Mid-Day Outlook Daily Pivots: (S1) 1.0175; (P) 1.0190; (R1) 1.0205; More... USD/CHF drops sharply in early US session but stays above 1.0130 minor support. Intraday bias remains neutral first. We'd still expect strong support from 1.0130 to contain downside to bring rise resumption. Break of 1.0237 will resume larger up trend to 1.0342 key resistance. However, sustained break of 1.0130 will confirm short term topping. In that case, deeper pull back would be seen back to 55 day EMA (now at 1.0053) and below. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings FTSE Unchanged as British Manufacturing PMI Within Expectations, BoE Decision Next The Calm before the FOMC GBPUSD Faces Further Price Recovery Higher On Correction GBP/USD Approaches Resistance ahead of Key Events Pound Finds Renewed Strength Ahead Of FOMC, BoE And NFP Fed Can Sustain Or Stop The Market's Rally NZD Tumbles, Fed Decision Will The U.S Dollar Get The Fed's Help? Traders Eye Fed's Decision Dollar On Standby As Markets Brace For Fed Decision Fundamental Analysis | Technical Analysis In-depth Reports "Tarrified" Part III: European Union The Next Target of U.S. Tariffs Spanish Election Monitor: Europe's Centre-Left Stages A Comeback Case for RBA Rate Cut Strengthens But We Still Favour August Over May for the First Move Are Sanctions On Iranian Oil Purchases A 'Big Deal'? Green Shoots Or Rogue Weeds? Don't Expect a Big Jolt to Growth if Trade Tensions Ease Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 22:30 AUD AiG Performance of Manufacturing Index Apr 54.8 51 22:45 NZD Employment Change Q/Q Q1 -0.20% 0.50% 0.10% 22:45 NZD Unemployment Rate Q1 4.20% 4.20% 4.30% 22:45 NZD Labor Cost Private Sector Q/Q Q1 0.30% 0.50% 0.50% 23:01 GBP BRC Shop Price Index Y/Y Apr 0.40% 0.90% 08:30 GBP Mortgage Approvals Mar 62K 64K 64K 65K 08:30 GBP Money Supply M4 M/M Mar -0.50% 0.30% 0.30% 08:30 GBP PMI Manufacturing Apr 53.1 53.1 55.1 12:15 USD ADP Employment Change Apr 275K 181K 129K 151K 13:30 CAD Manufacturing PMI Apr 49.7 50.5 13:45 USD Manufacturing PMI Apr F 52.6 52.4 52.4 14:00 USD ISM Manufacturing Apr 52.8 55 55.3 14:00 USD ISM Prices Paid Apr 50 55.7 54.3 14:00 USD ISM Employment Apr 52.4 57.5 14:00 USD Construction Spending M/M Mar -0.90% 0.10% 1.00% 0.70% 14:30 USD Crude Oil Inventories 9.9M 1.3M 5.5M 18:00 USD FOMC Rate Decision (Lower Bound) 2.25% 2.25% 18:00 USD FOMC Rate Decision (Upper Bound) 2.50% 2.50%

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