Talking Points:

New Zealand Dollar Sold on Soft Trade Balance Data in Overnight Trade
Euro Likely to Look Beyond Germany’s GfK Consumer Confidence Survey
US Financial Markets’ Closure to Drain Liquidity at the Start of the Week

The New Zealand Dollar underperformed in otherwise quiet overnight trade, falling as much as 0.2 percent on average against its leading counterparts. The move followed the release of disappointing Trade Balance data that showed a monthly surplus of NZ$534 million in April. Economists were penciling in a print at NZ$634 million ahead of the release. Technical positioning hints further NZDUSD weakness is ahead.

The economic calendar is quiet in European hours, with Germany’sGfK Consumer Confidence survey amounting to the only bit of noteworthy event risk. The gauge is expected at 8.5in June, unchanged for a third consecutive month. The release is unlikely to prompt a meaningful response from the Euro as investors remain focused on the probability of expanded ECB stimulus in the weeks ahead. We remain short EURUSD.

US financial markets will remain shuttered for the Memorial Day holiday on Monday, making for a low-liquidity environment. That seems likely to make for a muted start to the trading week. Depleted market depth can amplify kneejerk volatility in the event that unforeseen headline risk spooks investors however, and traders would be wise to tread carefully in the coming hours.

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