Monday was comparatively thin and major assets were moving slowly as the economic calendar was not that full. 'Japan's set of data was released in the Asian trading session, affecting the USD/JPY currency pair. Traders bought call options as GDP report was surprisingly strong in the first quarter (+0.5% quarter-over-quarter versus -0.1% predicted, and +2.1% year-over-year versus -0.2% expected), while industrial production fell less than expected. German Producer Price Index picked up the growth momentum in April, while Eurozone current account improved. However, EUR/USD was pressured as the investors kept buying call options for the greenback after last 'week's strong performance. Chicago Fed National Business Activity showed weakness, and U.S.equities struggled to reverse the bearish trend on Monday.
The Reserve Bank of Australia published the latest meeting minutes, and the statement showed even more dovish rhetoric than some of the Aussie optimists were hoping for. The regulator was seriously intended to keep cutting the interest rates this year, softening the financial conditions in the country and supporting local exporters as the economic growth was not strong enough to keep the level of the current rates. As a result, speculators were massively buying put options for AUD/USD and AUD/JPY, while the second asset charted even deeper losses. The Bank of 'England's voting members spoke in London, stating that the regulator 'won't step off the line mentioned earlier. The interest rates will remain unchanged until the Brexit story will show any certainty and political crisis will come to an end. BoE Governor Carney was trying to verbally support falling Pound as the currency dropped across the board after rumours about Theresa 'May's resignation hit the wires. However, that did not help, and GBP/USD kept falling on Tuesday. In the other side of Atlantic, the U.S. reports were also weaker-than-expected. So, CBI consumer confidence declined in May, while 'April's existing home sales dropped. However, the U.S. dollar index continued the uptrend, edging above 98.00.
Quarterly Retail Sales failed to meet the 'market's expectations in New Zealand in April, and the Kiwi edged lower as investors were buying put options for the currency. Japan released Trade balance figures, and the report showed potential turbulence for the third largest 'world's economy. The exports volume declined -2.4% year-over-year in April, while economists were predicting a negative reading of -1.8%. 'That's a third consecutive monthly decline in exports volume, which is a real nightmare for the export-oriented economy. In contrast, Imports jumped 6.4% versus 4.8% predicted and 1.2% in the previous month. The Trade Balance squeezed the positive surplus to +60.4 billion yen, while experts were forecasting +203.2 billion yen after previous reading of +527.8 billion yen in March. As a result, USD/JPY and other yen crossed plunged. Chinese Industrial Production and Retail Sales continued weighing on emerging markets as the data was in the red again. British CPI and PPI decreased inflationary pressure in the country, but Sterling was falling like a rock due to the political turmoil. U.S. Crude Oil Inventories jumped to 4.7 million barrels, causing a sell-off and panic for WTI and Brent Crude traders. The only positive news of the day came in from Canada as the country's retail sales improved in April. Binary options markets had a mixed reaction on FOMC minutes published at the end of the day. On the one hand, the Federal Reserve was more hawkish in views about the monetary policy and economic growth. On the other, the recent economic reports showed that things aren't that good, and the economy might slow down, eliminating chances for a rate hike this year. As a result, the U.S. dollar index reversed the uptrend, falling dramatically, while U.S. stock indices fell sharply.
Purchase Managers Index was mixed in the European Union in April. France showed an improvement in all sectors, while German and Eurozone manufacturing PMI declined, the Services sector plunged. However, the EUR/USD currency pair had an opposite reaction. Binary options traders were impressed by the price action in the United States on Wednesday and put options for greenback were in demand. Besides, Rumours about positive vote result to the European Parliament and EC meeting minutes added support for Euro. U.S. housing sector kept disappointing investors as New Home Sales fell in April. Shares and Treasury yields continued the bearish trade.
New Zealand imports and exports volume increased in April but the overall trade balance fell as the country was importing goods faster than exporting. NZD/USD slowed down the rally but finished the week with 0.69% gains as the greenback was weak across the board. The Australian dollar surged on the back Prime Minister elections. Japanese National Core CPI stagnated in April, while internal consumption decreased. USD/JPY was testing 109.00 support for the second time this month. British Retail Sales jumped, supporting Sterling. GBP/USD pared mid-week losses, finishing the trading week flat. The U.S. reports continued disappointing investors as durable goods orders declined for the second consecutive month.