Morning Commentary & Currency Insights – May 1, 2018

The DXY is up 0.12% today, which is just shy of the highs we saw on Friday, lifted by positive US economic data as we look forward to the Fed tomorrow and jobs numbers on Friday. Yields on the 10-year treasury note is still buoying the dollar as we continue to flirt with the psychological 3% level. Trump announced yesterday that he would be extending the imposition of aluminum and steel tariffs on the EU and NAFTA counterparts until June 1^st following a tentative agreement reached with Argentina, Australia and Brazil. EU officials responded saying that they are willing to negotiate a deal, but will not do so under threat. Treasury Secretary Mnuchin will visit China later in the week in hopes of reaching a trade agreement with the Asian nation. Israeli PM Netanyahu took to television yesterday highlighting evidence of nuclear deception in Iran. Analysts and investors did not seem too bothered by the statements as there was no new evidence or developments in the current probe, however oil prices did rally to above $69/barrel, only to later consolidate back in the mid $67’s later in the session. German retail sales again disappointed pressuring Euro lower, while Sterling is still floundering following BoE caution from last week.

With a number of bank holidays in Asia and Europe, Canada and the US lead the economic calendar today with CAD GDP (0.3% vs -0.1%) and US ISM Manufacturing and ISM Employment. Poloz will also speak today in Yellowknife on Household Debt levels. Short term support and resistance remain at 1.2750 and 1.2900 respectively, while RSI maintains neutral levels at 54 and the 200-day moving average residing at 1.2632.