Global Markets:

  • Japan (JPY) Core Machinery Orders (m/m): 19.1%, Expected: 6.0%, Previous: -8.8%
  • Japan (JPY) Core Machinery Orders (y/y): 16.1%, Expected: 4.2%, Previous: 10.8%
  • New Zealand (NZD) PPI Output (q/q): 0.9%, Expected: 0.7%, Previous: -0.4%
  • Leveraged funds increased net short yen position to 5-week high according to CFTC data
  • New Zealand’s PM Key: House prices have risen more than government prefers. Improved supply is most important for housing
  • Asian stock markets are lower this morning
  • Nikkei declined 0.50 % while the Shanghai Composite lost 1.20 %
  • The Hang Seng dropped 0.60 % and Australia’s ASX fell 1 %
  • Gold at $1296 (+0.20 %), Silver at $19.48 (+0.80 %), Crude Oil at $101.70 (+0.12 %)
  • US 10 year yield at 2.52

CFTC Commitments of Traders Report:

  • EUR positioning changed from 32,551 contracts long last week to 2,175 contracts short
  • GBP longs declined to 31,755 contracts long vs 40,646 in the previous week
  • AUD longs increased to 17,127 contracts vs 8,637 contracts previously
  • CAD shorts fell to 26,037 contracts vs 31,600
  • CHF longs dropped to 6,806 contracts vs 13,184
  • GBP longs dipped to 31,755 contracts vs 40,646
  • JPY shorts rose to 64,707 contracts vs 60,728

FX Flows/Orders:

  • EUR – Bids seen sub-1.3675 in EUR/USD from Asian names, with the next major tech support levels at 1.3640 and the 200 DMA at 1.3625. Not many data releases out of the Euro Zone this week; the only that could move the markets are Manufacturing & Services PMI on Thursday and German GDP & IFO on Friday.
  • GBP – Trading higher into the European open. US pharma giant Pfizer announced it will make a final offer UK’s AstraZeneca, increasing the bid to GBP55 billion, and said it will walk away should the offer be rejected. Little reaction in the markets so far. Looking ahead, plenty of risk events out of the UK with CPI on Tuesday, Bank of England Minutes and Retail Sales on Wednesday and GDP data on Thursday. At least the GBP pairs should be moving this week!
  • JPY – Little has changed and dealers are still reporting bids from various names placed between 101.20 and 101.40. Speculators are increasingly bearish on the pair, but there is a lot of wood to chop before we could see a breakout below 100.00. To the topside, expect solid selling interest starting from 101.90 up to 102.00. Main risk event is the Bank of Japan meeting on Wednesday.

Upcoming Events:

  • 09:00 GMT – Euro Zone Construction Output
  • 16:10 GMT – Fed’s Williams and Fisher speaking