• Prior -5.7%
• Market index 205.0 vs 214.9 prior
• Purchase index 158.3 vs 165.4 prior
• Refinance index 443.0 vs 468.2 prior
• 30-year mortgage rate 6.69% vs 6.57% prior

A surge higher in rates in the past week weighed further on mortgage applications with both purchases and refinancing activity slumping heavily. The market index is the lowest since the first week of March as housing market conditions continue to be impacted adversely by the Fed’s tightening.

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

S&P 500 futures are now down 16 points, or 0.4%, with major European indices posting losses of around 1.5% to 1.8% at the moment. The sour mood is keeping the dollar underpinned, with the currency stretching gains now on the session.

EUR/USD is down 0.2% to session lows at 1.0750, with large option expiries now in play. Meanwhile, GBP/USD has erased its earlier jump post-CPI and the rejection at the 200-hour moving average has seen the pair fall further to 1.2370 currently:

That’s the lowest levels in a month for the pair with the 10 April low at 1.2344 a focus point from a technical perspective, before a potential drop towards the 100-day moving average at 1.2280.

Elsewhere, the dollar is also maintaining a decent advance against the commodity currencies with USD/CAD up 0.4% to near 1.3560 and AUD/USD down 0.7% to 0.6565 – testing the lows highlighted here.

NZD/USD is the biggest loser though as the pair is down nearly 2%, building on losses after the RBNZ earlier. The pair is now down to 0.6120 and looks poised for a test of key support at 0.6100-11 next.

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

• German economy to grow modestly in Q2
• Easing supply bottlenecks, fall in energy prices to support industry recovery
• This should also support exports, especially since global economy has regained some momentum
• Private consumption still likely to stagnate
• Price growth to fall only very gradually in the months ahead

Well, from the PMI data we can identify the contrast between the manufacturing and services sectors in Germany. The former is suffering but is marginally offset by a rather robust performance in the latter. At best, there might be modest growth but at the balance, we might just see another flat performance in Q2 for Germany.

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

• Prior -20

The order book balance is still rather subdued, even if the headline reading is a three-month high. It is still tracking below the historic average of -13 with export order balance falling sharply to -26 from -9 in the previous month. That said, UK manufacturers are at least expecting to raise prices by the smallest margin since March 2021. However, the price increases will still be much faster than the long-run average.

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