The financial market remains relatively calm at the start of the new week after month-end flows increased unpredictability ahead of the weekend. However, the US dollar remains resilient against its rivals early Monday, with the US Dollar Index stretching its rally to 102.00. Trading is expected to remain subdued for the first half of the day due to the Labor Day holiday. Investors will keep an eye on the ISM Manufacturing PMI survey during the American session for April.
On Friday, US data displayed that the Personal Consumer Spending (PCE) index, the Fed’s favored measure of inflation, declined to 4.6% yearly in March from 4.7% in April. In addition, the US Bureau of Labor Statistics announced that the labor cost index, or compensation price for civilian workers, rose by 1.2% in the first quarter, compared with a 1% increase in the previous quarter.
Over the weekend, a dozen banks, including JPMorgan Chase & Co, PNC Financial Services Group, and Citizens Financial Group Inc, have reportedly made a bid for First Republic Bank as United States regulators seek to complete the sale. US stock index futures traded slightly higher the day after the events, with the US 10-year Treasury yield remaining below 3.5%, although recovering a small part of Friday’s decline.
Forex Technical Analysis
EUR/USD remains under downward pressure, hovering around 1.1000 in Europe on Monday morning.
GBP/USD increased to 1.2585 on Friday, the highest since June 2022 but struggled to maintain bullish momentum earlier in the week. The pair was seen trading below 1.2550.
After Friday’s impressive gain fueled by dovish language from the Bank of Japan, USD/JPY strengthened early Monday and recently traded at 136.80, its highest level since early March.
AUD/USD gained ground and approached 0.6650 early Monday. The Reserve Bank of Australia will disclose its monetary policy design during Asian trading hours on Tuesday.
Gold prices came under restored selling pressure on Monday, falling to $1,980 amid pressure from rising US Treasury yields.
After a quiet weekend, Bitcoin fell early Monday and was down more than 2% daily to around $28,650. After failing to claw back $1,900, Ethereum fell back, losing more than 1% on Sunday. ETH/USD continues to slide towards 41,800 on Monday.