Global Markets:

  • China (CNY) CB Leading Economic Index (APR): 0.9, Previous: 1.2
  • New Zealand ANZ Consumer Confidence Survey: -4.4% (+1.1% previously)
  • Australia sells A$700 Mln in 3-Year, 4.25% bonds with a yield of 2.88% and demand 4.54 times the offer
  • Fed’s Williams says Fed Policy is “finally on the road to normal”
  • Fed’s Williams says he expects 3% economic growth in 2014 and 2015. Sees unemployment between 5.25-5.50% by 2016
  • Asian stock markets are mixed this morning
  • The Nikkei is up 1 % and Australia’s ASX gained 0.30 %
  • The Shanghai Composite and Hang Seng are both unchanged on the day
  • Gold at $1295, Silver at $19.47, Crude Oil at $103.74
  • US 10 year yield at 2.554

FX Flows/Orders:

  • AUD – AUD/USD bounced off 0.9215 and is trading near the session high heading into the London open. Flows have been light, with buying led by leveraged names. Real money funds have offers at 0.9280 and there are intraday stops building around that level as well. To the downside, the market is aware of a barrier option at 0.92 and bids are located ahead of that level. Stops reported to be sizeable through 0.9190 and next major support then seen at the 200 DMA at 0.9170. With sentiment for the commodity currencies still negative, we should see a test of that level fairly soon.
  • CAD – USD/CAD saw a quick rally to 1.0930 after weak Canadian Retail Sales data, but failed to sustain momentum. It seems speculators will stay on the sidelines until we break out of this tight range and today’s CPI release might help. The local banks see bids at 1.0880 and in better size from 1.0855 to 1.0850. To the topside, solid selling interest ahead of the 1.0950 level.
  • CHF – Banks have seen very good demand for USD/CHF the past few days, including macro fund buyers. The obvious resistance level is 0.8970 and a break above will attract momentum buyers. The 200 daily MA is located at 0.8992 and above there, not much tech resistance until 0.9080.
  • EUR – EUR/USD was again quiet, but is still trading close to key support levels. Another test of the 200 DMA @ 1.3632 seems imminent. Plenty of stops located beneath. To the topside, Asian names have offers resting at 1.3675/80 and stops said to be above 1.3690.
  • GBP – Cable consolidating around 1.6865 after the 1.6850 support held yesterday. There is plenty of buying interest around 1.6820/30, which should keep the Pound bid today. To the topside, specs have some offers pre-1.69, but key resistance remains at 1.6920. EUR/GBP looking a bit oversold at the current levels, but there is still plenty of selling interest above 0.8110, so it is unlikely we will see any larger bounce in that pair.
  • JPY – In USD/JPY, there is supply from local exporters ahead of the 102.00 level. A break above the big figure would very likely attract buying from short-term specs rushing back into USD/JPY longs. To the downside, bids seen into 101.50 and the key intraday level is 101.30.

Upcoming Events:

  • 06:00 GMT – German GDP (0.8 % QoQ, 2.3 % YoY)
  • 08:00 GMT – German IFO Business Climate Index (110.9)
  • 08:00 GMT – German Business Expectations (106.6)
  • 08:00 GMT – German Current Assessment (115.5)
  • 08:00 GMT – Italian Retail Sales (0.3 % MoM)
  • 12:30 GMT – Canadian CPI (0.3 % MoM, 2.0 % YoY)
  • 14:00 GMT – US New Home Sales (425k)