Action Insight Mid-Day Report 5-20-20

Sterling Softens after UK Sold Bonds With Negative Yield

Action Insight Mid-Day Report 5-20-20 Sterling Softens after UK Sold Bonds With Negative Yield Sterling weakens mildly today after UK sold government bond with a negative yield for the first time ever. According to the Debt Management office, It auctioned GBP 3.75B of 3-year bonds at an average rate of -0.003%. Demand was weak too with bid-to-cover ratio at 2.15, lowest since March. Nevertheless, Dollar and yen are not too far away with investors staying in positive mood. DOW futures point to another day of higher open. New Zealand and Australian Dollar continues to extend gains while Swiss Franc is having a sudden spike up. Technically, GBP/USD and GBP/JPY are losing some upside momentum but this week's rebounds are not threatened yet. EUR/GBP is more of the focus in Sterling weakness, and is still on track to 0.8987 near term fibonacci resistance. Euro's strength is somewhat capped by the volatility in EUR/CHF. In spite of today's retreat, further rise is still expected in EUR/CHF as long as 1.0578 minor support holds, to 1.0710 cluster resistance. However, break of 1.0578 would turn focus back to 1.0503 low. AUD/USD would be a focus for the rest of the week as rally resumption will put 0.6670 key resistance level into focus. In Europe, FTSE is currently up 0.47%. DAX is up 0.29%. CAC is down -0.22%. German 10-year yield is up 0.008 at -0.455. Earlier in Asia, Nikkei rose 0.79%. Hong Kong HSI rose 0.05%. China Shanghai SSE dropped -0.51%. Singapore Strait Times dropped -0.75%. Japan 10-year JGB yield rose 0.0017 to 0.003. Full Report Here Canada in deflation with CPI at -0.2% in April Eurozone CPI finalized at 0.3% in April, core CPI at 0.9% UK CPI slowed to 0.8% in April, lowest since 2016 Australia retail sales dropped record -17.9 in April, falls in every... RBNZ Orr prepared to go to negative rate but a lot... BCC: Only 37% UK firms can fully restart with workplace safety... Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol PBOC Pauses in Rate Cutting. Outlook Remains Expansionary amidst Global Demand... Crude Oil Price Supported by Improved Fundamentals; Upside Limited Negative Interest Rate Expectations Drove Markets, Risk Reversal TBC Soon Central Bank Views | China Watch | Oil N' Gold | Special Topics GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.2191; (P) 1.2243; (R1) 1.2303; More.... GBP/USD continues to struggle around 4 hour 55 EMA and intraday bias remains neutral first. Recovery from 1.2065 might extend higher. But as long as 1.2467 resistance holds, another fall is mildly in favor. We'll holding on to the view that corrective rise from 1.1409 should have completed. On the downside, below 1.2065 will target a test on 1.1409 low. However, on the upside, break of 1.2467 will turn bias to the upside for 1.2647 resistance. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings Stocks Shrug off Vaccine Doubts, UK's First Negative Rate Bond Sale, Commodities Rally US Futures Turn Higher, Watch LOW, TGT, MRNA, JNJ, URBN Risk Remains On The Menu Despite Vaccine Bombshell Gold Continues The Upside Rally Above SMAs Stocks Trapped In 'No Man's Land', But Yen Slides EU Indices Are Still Consolidating This Morning | TA Focus On Astrazeneca GBP/USD Outlook: Weak Inflation Data Pressure Pound After Thin Daily Cloud Capped Recovery USDJPY Tests Key Resistance For More Upside Moves EURGBP Gains Some Traction For A Climb NZDUSD Surpasses SMAs But Bias Is Neutral Fundamental Analysis | Technical Analysis In-depth Reports PBOC Pauses in Rate Cutting. Outlook Remains Expansionary amidst Global Demand Uncertainty and Renewed Trade Tensions Soft Japanese Economy, Subdued Yen UK: Keep Cautious and Carry On Crude Oil Price Supported by Improved Fundamentals; Upside Limited With Interest Rates At Zero, What Will Drive FX Now? Could the U.S. Economy Be Facing Deflation? Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 23:50 JPY Machinery Orders M/M Mar -0.40% -7.10% 2.30% 00:30 AUD Westpac Leading Index M/M Apr -1.50% -0.80% -0.70% 06:00 GBP CPI M/M Apr -0.20% -0.10% 0.00% 06:00 GBP CPI Y/Y Apr 0.80% 0.90% 1.50% 06:00 GBP Core CPI Y/Y Apr 1.40% 1.40% 1.60% 06:00 GBP RPI M/M Apr 0.00% 0.10% 0.20% 06:00 GBP RPI Y/Y Apr 1.50% 1.60% 2.60% 06:00 GBP PPI Input M/M Apr -5.10% -3.70% -3.60% -3.80% 06:00 GBP PPI Input Y/Y Apr -9.80% -8.40% -2.90% -3.10% 06:00 GBP PPI Output M/M Apr -0.70% -0.40% -0.20% 06:00 GBP PPI Output Y/Y Apr -0.70% -0.40% 0.30% 06:00 GBP PPI Output Core M/M Apr -0.10% -0.10% 0.30% 06:00 GBP PPI Output Core Y/Y Apr 0.60% 0.60% 0.90% 08:00 EUR Eurozone Current Account (EUR) Mar 27.4B 40.2B 37.8B 09:00 EUR Eurozone CPI M/M Apr F 0.30% 0.30% 0.50% 09:00 EUR Eurozone CPI Core Y/Y Apr F 0.90% 0.90% 0.90% 09:00 EUR Eurozone CPI Y/Y Apr F 0.30% 0.40% 0.40% 12:30 CAD Wholesale Sales M/M Mar -2.20% -4.50% 0.70% 12:30 CAD CPI M/M Apr -0.70% -0.40% -0.60% 12:30 CAD CPI Y/Y Apr -0.20% -0.10% 0.90% 12:30 CAD CPI Common Y/Y Apr 1.60% 1.70% 1.70% 12:30 CAD CPI Median Y/Y Apr 2.00% 1.90% 2.00% 12:30 CAD CPI Trimmed Y/Y Apr 1.80% 1.80% 1.80% 14:00 EUR Eurozone Consumer Confidence May P -23 -23 14:30 USD Crude Oil Inventories 1.7M -0.7M 18:00 USD FOMC Minutes

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