Forex Today: EUR – Macron trade unwinds in Asia, a quiet docket ahead

The week opening in Asia started with a bang, as the Euro rallied hard initially on a Macron win in the French presidential election. However, it’s failed to sustain at multi-month peaks and retreated sharply on the back of unwinding of Macron trades. Meanwhile, Asian stocks ex-China rallied on renewed optimism induced by the French election outcome alongside a rebound in oil prices. The US dollar benefited against most of its major peers amid a fall in EUR/USD.

On the data front, the Chinese trade data left the markets unimpressed, with dismal imports and exports numbers adding to the downbeat tone seen around the Aussie and NZD. The Aussie suffered in Asia also on the back of a sharp drop in Aus building permits data, which overshadowed the rise in the NAB Business Conditions and Confidence indices to multi-year highs.

Heading into Europe, the Euro is seen attempting another attempt to regain 1.10 handle on upbeat German factory orders data, which kicked-off a data-light EUR session ahead. Next on tap remains the UK Halifax HPI and Sentix Investor Confidence data from the Euroland. Meanwhile, from the NA session, we have the US LMCI and Canadian housing starts data on the cards.

Main topics in Asia

Official results (40.4m votes): Macron 63.85% vs. Le Pen 36.15%

The French Interior Ministry is reporting that, with 40.4 million votes counted, centrist's Emmanuel Macron has 63.85%, while far-right's Marine Le Pen has 36.15%. The abstention rate is at 24.61%.

NAB Business Conditions and Confidence hits multi-year highs in April

The National Australia Bank (NAB) monthly business survey posted another strong result in April, with both business conditions and confidence improving - pointing to ongoing strength in business activity in the near-term. 

Australia building permits dropped 19.9% in March

Australia government data released this Monday morning showed building permits, which are an indicator of future construction plans, dropped 19.9% y/y in March. 

China’s April trade data (Yuan terms): A big beat, but exports & imports disappoint

China's trade balance for April, in Yuan terms, came in at +262.3 billion CNY vs +197.2 bn expected and +164.34 bn last. 

Key Focus ahead

Macron wins... Fed could retake center stage, will EUR/USD drop?

Macron has won the second round of the French elections as widely expected and the forex markets have reacted by dumping EUR ‘on the fact’.

Macron wins 65.8% of votes, what next for markets? - Socgen

Kit Juckes, an economist at Societe Generale noted the Macron victory and offered a breakdown of his thoughts on the matter.

GBP/USD Forecast: fails ahead of 1.30 mark, could retreat back closer to mid-1.2800s

After an initial weakness, in reaction to the outcome of the French Presidential election, the US Dollar recovered early lost ground, with both the GBP/USD and the EUR/USD majors are now retreating after hitting fresh multi-month tops

What to expect from the RBNZ this week? - Westpac

Analysts at Westpac explained that they expect the RBNZ to keep the OCR on hold at 1.75% at Thursday’s Monetary Policy Statement, but with a stronger signal that the next move will be up.