Forex today: Macron trade unwound and Fed chat less hawkish noting poor data

Forex today was governed by markets that responded to Macron's victory in a way that was expected considering how priced in the outcomes was. 

Macron won by a landslide in the region of 65% to 35% and while there was the expected relief rally in the euro, it was soon faded to back below the 1.10 handle again. The euro has continued to lose value throughout the US shift to 1.0915 the low today so far. EUR/USD opened at 1.0999 on a daily basis meeting the previous close at 1.0998, down 0.6%. EUR/CHF, on the other hand, managed to hold a bid and rallied from 1.0848 to 1.0919 with USD/CHF breaking the 4hr 200 ema at 0.9971 with highs recorded at 0.9992.

DXY is up 0.47% having opened at 98.51 against the close of 98.64 with a YTD return of -3.04% between the 52 WK range of 93.01-103.82. US 10-year yields today are higher by 1.16% at the time of writing having opened at 2.3578 against the close of 2.3487.  Markets are still fully pricing in a rate hike in June and despite Fed chat today from Bullard who said that continued rate hikes are not justified by data and added that the policy rate is approximately at an appropriate setting today.  Fed's Mester suggested that the policy rate is approximately at an appropriate setting today.

USD/JPY opened at 112.99 and is up 0.32% today against the previous close of 112.71, picking up the pace after the initial relief rally in the yen lost its footing on the sell the fact trade that ensued.  Sterling remained firm on the 1.09 handle, although off from the highs of 1.2992 as failures at the 1.30 handle created some supply to 1.2940 where the price is stabilising. From the calendar, the US April labour market conditions index rose by 3.5%, following an upwardly revised 3.6% in March, becoming the two strongest readings since early 2015.

Day ahead:

Retail Sales for Australia are on the cards. 

Key events in the US session:

• NY Fed: Inflation expectations decline and employment prospects brighten
• Fed's Bullard: Continued rate hikes not justified by data
• Fed's Bullard: The policy rate is approximately at an appropriate setting today
• Fed's Mester: Reached employment goals, nearing 2% inflation target - RTRS