Euro Soars Against Dollar

Analisi Giornaliera - 05/05/2017

“Frexit” Worries Wane As Second Round of French Voting Approaches

The Euro has capped a significant rally against the US dollar, rising to its highest level since the day following the US presidential election last November. Investors pushed the common currency higher after a leading poll showed the centrist Emmanuel Macron won a televised French presidential election debate against candidate Marine Le Pen.

Euro Area Economic Data Shows Strength

The recent bullish sentiment in the Euro has been bolstered by data released Thursday showing business activity in the Euro Zone was close to a six-year high. The Markit Euro Area Composite PMI stood at 56.8 in April compared to the 56.7 reported back in March, marking the best reading since April of 2011.

Manufacturing and services both rose at a faster pace, indicating a strong start to the second quarter.

Meanwhile, the greenback remained under pressure despite US jobless claims falling to multi-decade lows, while March factory orders came in slightly weaker than expected.

Markets focus will now shift the focus to the official April US jobs report scheduled for release later in the session ahead of the second-round of French presidential voting, set for Sunday.

EURUSD is lower after reaching 1.09897 on Friday, the pair’s highest point since November 9^th.

US House Repeals “Obamacare”

During its most recent push, the US House of Representatives managed to approve a bill to replace key elements of “Obamacare” late on Thursday following a failed attempt in March.

The vote to repeal the Affordable Care Act, which enabled an additional 20 million Americans to access health insurance, was Republican President Donald Trump's biggest legislative victory since he assumed office in January.

Congressional Republicans have been targeting the 2010 law, labelling it as government overreach. Nevertheless, despite enjoying a majority in both houses of Congress, Republicans have found reversing “Obamacare” politically risky amid fears of voter backlash.

Thursday's 217-213 vote will now see the legislation being sent to the US Senate for consideration.

S&P 500 futures are trading largely unchanged after consolidating for the better part of the last 7 sessions.

Wheat Prices Plummet

After a spectacular jump earlier in the week following an unexpected snowstorm, wheat tumbled last session, and is extending those losses in early Friday trade after the United Nations raised its forecast for grain inventories.

Global stockpiles will reach their highest level in 17 years by the end of 2017-18, according to the United Nations’ Food & Agriculture Organization. The FAO expects wheat stocks to rise 3.30% to 247.6 million tons by the end of next season to their highest since 2000-01.

US wheat futures rallied on Monday after snowfall damaged ripened crops in parts of major producers Kansas, Colorado and Oklahoma last weekend. However, with abundant supplies, the FAO reckons the impact of the recent snow and high winds in the US Midwest are likely to be limited.

Wheat May futures fell -3.00% on Thursday, and were last seen trading around $424.00 per bushel.

Australian Construction Gains

Data from a leading industry body on Friday showed Australia’s construction sector expanded for the third straight month in April.

The Australia Industry Group’s performance of construction index climbed from 51.2 in March up to 51.9 during the month of April, remaining above the 50-mark that separates growth from contraction. Last month’s gains were primarily driven by strength in new orders and improved business conditions.

AIG noted that pressure on builders from rising input prices and wages were continuing to be passed along to buyers. The construction sector, which accounts for almost 8.00% of Australia’s GDP, contracted for four consecutive months through January, but returned to growth in February, expanding at its fastest clip in eight months.

AUDNZD is dipping on Friday, with the pair last seen trending around the 1.0740-mark.