Global Markets:

  • Australia (AUD) CB Leading Index (m/m): 0.0%, Previous: 0.3%
  • Singapore GDP (QoQ) (Q1): 2.3 %, Forecast: 1.2 %
  • S&P: Australia credit ratings stable, with no immediate risk to AAA rating. Australian Govt appears committed to prudent finances.
  • NZ Finance Minister English: NZ doesn’t plan to raise sales tax
  • RBA’s Debelle: Demand for Australian Government debt remains robust, but lower capital inflows may result in a drop in Aussie dollar
  • RBA Minutes: Accommodative policy appropriate for some time, with inflation forecasts consistent with target
  • RBA Minutes: Demand for labor likely subdued for some time, expects below trend economic growth in coming quarters
  • Asian equity markets are higher as of 05:00 GMT with the Nikkei up 0.80 % and the Shanghai Composite gaining 0.20 % on the day
  • Gold at $1294, Silver at $19.35, Crude Oil at $102.20
  • US 10 year yield at 2.546

FX Flows/Orders:

  • AUD – No surprises from the RBA minutes, but frustrated specs have exited long positions in AUD/USD, driving it to a fresh low at 0.9295. Dealers expect to see good demand around 0.9250, while the next big tech support lies at the 200 daily moving average at 0.9171. To the topside, offers resting at 0.9350. Cross flows were negative overnight with AUD/NZD and AUD/JPY selling noted. There is talk of larger bids around 94.40 keeping AUD/JPY supported at the moment, but the risk is to the downside and we should see a test of 94.20 soon. Positioning is crowded and there are plenty of trailing stops beneath that level and sub-94.00.
  • CAD – USD/CAD quiet as usual and nothing to report aside from the said bids at 1.0850 and decent selling interest at 1.0920. No important data releases out of Canada until Thursday when the Retail Sales print will be published and until then, the range should hold.
  • EUR – EUR/USD flows have been light the past 24 hours; bids from sovereign names reported at 1.3675, while the topside, various names have offers placed around 1.3750. The cross pairs have been bit more interesting with EUR/JPY bouncing off the 138.60 support level and trading around 139.20 as we are heading into the London Open. Any rallies towards 140.00 should provide good intraday short opportunities for a move back sub-139.00. Meanwhile, many short-term specs were squeezed out of their EUR/AUD short positions; 1.48 the next obvious resistance level.
  • GBP – The market didn’t really care about the M&A news yesterday and flows in GBP/USD were light as well. Today should be more interesting with the CPI release scheduled for 09:30 BST. Initial support at 1.6780 and then 1.6730, which needs to hold to maintain upside momentum. To the topside, offers reported ahead of 1.6850 and in better size around 1.6880, including supply from Asian sovereign names.
  • JPY – USD/JPY recovered together with US yields and reached a high of 101.59 earlier. There was talk of large bids on the interbank platforms around 101.10 which kept the pair supported. Dealers are reporting bids building again from 101.20 down to 101.00, while offers placed pre-102.00.

Upcoming Events:

  • 06:00 GMT – German PPI (0.0 % MoM, -0.9 % YoY)
  • 08:30 GMT – UK CPI (0.3 % MoM, 1.7 % YoY)
  • 08:30 GMT – UK PPI (0.2 % MoM, 0.7 % YoY)
  • 12:30 GMT – Canada Wholesale Sales (0.4 % MoM)
  • 16:30 GMT – FOMC Member Plosser speaks
  • 17:00 GMT – FOMC Member Dudley speaks