ForexLive European FX news wrap: Dollar steadies on US-China trade news, Fed up next

Headlines:

• China says meeting with the US on trade is at the US’ request
• China reaffirms that its position on talks has not changed
• EU reportedly eyes tariffs on Boeing if trade talks with US go south
• What are the interest rate expectations for the major central banks?
• Reminder: China president Xi to visit Moscow later today
• China president Xi: We must firmly maintain post-war international order
• China gold reserves rise for sixth straight month
• Eurozone March retail sales -0.1% vs 0.0% m/m expected
• France March trade balance -€6.25 billion vs -€7.87 billion prior
• Germany March industrial orders +3.6% vs +1.3% m/m expected
• Germany April construction PMI 45.1 vs 40.3 prior
• UK April construction PMI 46.6 vs 45.8 expected
• US MBA mortgage applications w.e. 2 May +11.0% vs -4.2% prior

Markets:

• USD leads, JPY lags on the day
• European equities lower; S&P 500 futures up 0.6%
• US 10-year yields flat at 4.32%
• Gold down 1.2% to $3,387.75
• WTI crude up 0.8% to $59.56
• Bitcoin up 2.4% to $96,991

It was a rather sideways session as markets are digesting the potential de-escalation in the trade war between the US and China. The headlines overnight helped to give US futures a bump as well as the dollar. And that mostly stayed the course in European morning trade.

The greenback did give back some of its gains though, with EUR/USD turning back to near flat levels at 1.1363 currently. USD/JPY was one that held up, easing a little to 142.90 before coming back up to 143.33 at the moment. Besides that, USD/CAD is up 0.1% to 1.3793 and AUD/USD down 0.3% to 0.6470 on the day.

Overall, it’s not much but at least a minor victory for the dollar – for now anyway.

As for US futures, the gains mostly held with S&P 500 futures seen up 0.6%. That’s off the earlier high of gains of a little over 1% though, with market players keeping more tentative as China reaffirmed that their position hasn’t changed ahead of the talks.

European indices were less enthused though, as we’re yet to see much of any progress in talks between the EU and US at this stage.

In other markets, gold is down as the risk mood is holding up with the precious metal easing back under $3,400 on the day. Meanwhile, oil is also marked higher amid the better trade news as WTI crude tests the $60 mark during the session.

Coming up, we’ll have to navigate through more trade headlines but there is also the FOMC meeting decision to scrutinise. How will Trump respond when the Fed decides to keep rates unchanged later? We’ll have to see.

This article was written by Justin Low at www.forexlive.com.