Global Markets:

  • Australia Investment Lending for Homes (MAR): -0.8%, Previous: 4.4%
  • Australia House Price Index (q/q): 1.7%, Expected: 2.9%, Previous: 3.4%
  • United Kingdom BRC Retail Sales Monitor – All (APR) (y/y): 4.2%, Expected: 1.8%, Previous: -1.7%
  • New Zealand FPI (m/m): 0.6%, Previous: -0.3%
  • As of 05:00 GMT, Asian equity markets have all gained on the day
  • The Nikkei rose 2 %, while Australia’s ASX rallied 0.80 %
  • The Shanghai Composite is up 0.10 % and the Hang Seng is 0.30 % higher
  • Gold at $1293 (-0.20 %), Silver at $19.50 (-0.30 %), Crude Oil at $100.50 (-0.10 %)
  • US 10 year yield at 2.656

FX Flows/Orders:

  • AUD – AUD/USD is still struggling with the 0.94 level. The pair hit into solid offers around 0.9380 in yesterday’s early NY session and slowly declined to 0.9355. Overnight data came in below expectations, but had little impact on the markets as most traders are waiting for the Australian budget release at 10:30 London time. The market is aware of large bids at 0.9320/25 and that should support the Aussie in the near-term. Stops are building above 0.94, though no mention of larger downside stops near.
  • EUR – EUR/USD was caught in a 25 pips range yesterday and flows were rather light. Leveraged funds have been sellers of the move to 1.3770 and kept the stops at 1.3780 intact. With current Euro sentiment, the risk is to the downside. Dealers report bids ahead of 1.37 and 1.3650 is seen as next significant tech support. To the topside, solid selling interest at 1.38 and 1.3820. While the pair will probably remain in a tight range ahead of Thursday’s risk events, selling rallies towards 1.38 is the more favorable strategy for now.
  • GBP – Cable briefly traded above 1.69, but was not able to sustain momentum up there. Further position covering from longs ahead of Carney & Bank of England Inflation Report is possible; initial support at 1.6830 and then at 1.68. Dealers mention selling interest from Asian sovereign names at 1.6920.
  • JPY – USD/JPY has been well bid the past three trading sessions; overnight, leveraged funds have been the main buyers. Exporter offers reported at 102.50, better supply seen between 102.70 and 102.80.
  • NZD –  A quiet day for the Kiwi as well and it is unlikely we’ll see NZD/USD moving out of its range ahead of tonight’s speech by RBNZ Governor Wheeler, which is followed by domestic Retail Sales data. Wheeler will likely highlight again that the NZD is overvalued and that the RBNZ could intervene if the currency remains strong in the face of worsening fundamental data. Support seen at 0.86 and 0.8570 (55 DMA), but the big level to the downside is 0.85.

Upcoming Events:

  • 08:00 GMT – Italian CPI (0.2 % MoM, 0.6 % YoY)
  • 09:00 GMT – German ZEW Current Conditions (60.5)
  • 09:00 GMT – German ZEW Economic Sentiment (41.0)
  • 12:30 GMT – US Core Retail Sales (0.6 % MoM)
  • 12:30 GMT – US Retail Sales (0.4 % MoM)
  • 21:05 GMT – RBNZ Governor Wheeler speaks
  • 22:45 GMT – New Zealand Retail Sales