This week looks like it could be particularly active at the beginning and the end with commodity markets still in focus. Trading kicks off Sunday with the reaction to the second round of French Presidential voting. The markets appear to have priced in a Macron win, so if he does, it’s questionable if we will see follow through or profit-taking. EURUSD test of $1.1000 could be key. If Le Pen pulls off a surprise win, EUR and CAC could crash. Heightened market volatility is likely over the election period, this could result in widened spreads. We recommend that you monitor positions carefully, consider the use of appropriate risk management tools and maintain a sufficient account surplus throughout this period. Sunday also brings China trade data which could spark action in commodity markets and resource trading. Signs of a capital crackdown in China and soft US GDP have spooked commodity traders. This change sent base metals and energy markets down sharply last week but on Friday WTI and Brent staged big bullish bounces. Uncertainty over the outlook for resource demand could spark more trading action in commodities and resource currencies (CAD, AUD, NZD) through this week. Other indicators that could spark action include US energy inventories and China inflation. Following on from Friday’s six Fed speakers, more FOMC members speak through the week, highlighted by NY Fed President Dudley on Thursday. Speeches and data may continue to be analysed by traders through the lens of what impact, if any, they may have on whether or not the Fed is still planning to raise interest rates in June. In particular, US retail sales and retailer earnings may attract attention. Two central banks meet this week, the RBNZ and Bank of England. No changes are expected particularly from the BoE with the UK in the middle of an election campaign. RBNZ may tone down its threats against the Kiwi Dollar which has been dropping lately. In Canada this week, the focus remains squarely on house prices. The Home Capital saga may continue to capture the headlines but house price data later in the week could be significant too as everyone tries to figure out if the bubbles in Toronto and Vancouver can be unwound without crashing the Canadian economy. Economic news (North America time): Sunday France Presidential election final round China trade balance Monday Canada housing starts Germany factory orders FOMC Mester speaking Monday evening Australia retail sales Tuesday Germany trade balance, industrial production FOMC Rosengren speaking Tuesday evening China inflation Wednesday afternoon New Zealand RBNZ decision (1.75% no change expected) Thursday UK Bank of England meeting (no change expected) UK trade balance, industrial production US producer prices Canada new house prices FOMC Dudley speaking Thursday evening NZ manufacturing PMI Friday US retail sales, consumer prices, average weekly earnings Canada Teranet house prices FOMC Evans, Harker speaking Earnings Reports: Monday none Tuesday Walt Disney Wednesday Macy’s Nordstrom Thursday none Friday none