Earlier in the Day:

It was a quieter day on the economic calendar this morning. There were no material stats to provide the majors with the direction in the early hours.

While there were no material stats, the PBoC was in action this morning.

Away from the economic calendar, the markets continued to focus on the easing of lockdown measures and the latest COVID-19 numbers.

There is a significant downside risk lingering, with any sudden spike in new cases likely to spook the markets, however. In spite of this, the Aussie Dollar and Kiwi Dollar continued to find support early on.

Looking at the latest coronavirus numbers,

On Tuesday, the number of new coronavirus cases rose by 94,819 to 4,982,937. On Monday, the number of new cases had risen by 82,564. The daily increase was higher than both Monday’s rise and 81,022 new cases from the previous Tuesday.

France, Germany, Italy, and Spain reported 2,848 new cases on Tuesday, which was up from 1,916 new cases on Monday. On the previous Tuesday, 4,176 new cases had been reported.

From the U.S, the total number of cases rose by 20,688 to 1,570,583 on Tuesday. On Monday, the total number of cases had risen by 22,231 On Tuesday, 12^th May, a total of 22,740 new cases had been reported.

Out of China

The PBoC held loan prime rates unchanged at 3.85% for the 1-year and 4.65% for the 5-year, which was in line with forecasts.

The Aussie Dollar moved from $0.65561 to $0.65586 upon release of the rates. At the time of writing, the Aussie Dollar was up by 0.31% to $0.6557.

Elsewhere

At the time of writing, the Japanese Yen was down by 0.10% to ¥107.82 against the U.S Dollar, while the Kiwi Dollar was up by 0.54% to $0.6109.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Early on, German wholesale inflation figures for April are due out along with finalized April inflation figures for the Eurozone.

We don’t expect the numbers to have a material influence on the EUR, however.

Later in the day, Flash Consumer Confidence figures from the Eurozone will likely garner plenty of attention. The markets will be looking for a pickup in confidence. Employment conditions may well overshadow the easing of lockdown measures, however.

Outside of the numbers, further chatter on fiscal policy and any shift in market risk sentiment will also need monitoring.

The markets will not only need to look out for any rise in COVID-19 numbers but also chatter from Beijing or Washington.

At the time of writing, the EUR was up by 0.17% to $1.0942.

For the Pound

It’s a relatively busy day ahead on the economic calendar. Key stats include April’s inflation figures.