Global Markets:

  • Australia (AUD) Private Capital Expenditure (Q1): -4.2%, Expected: -1.4%, Previous: -5.2%
  • Australia (AUD) HIA New Home Sales (APR) (m/m): 2.9%, Previous: 0.2%
  • Japan (JPY) Retail Trade s.a (APR) (m/m): -13.7%, Previous: 6.3%
  • Japan (JPY) Retail Trade (APR) (y/y): -4.4%, Expected: -3.3%, Previous: 11.0%
  • BoJ’s Shirai says the bank is conducting policy to reach a stable 2% inflation level alongside sustainable growth
  • US 10 year Treasury bond yield closed at an 11-month low of 2.443
  • Asian Stock Markets: Nikkei and Shanghai Composite both unchanged on the day, Hang Seng gained 0.30 %, ASX fell 0.20 %
  • Commodities: Gold at $1259, Silver at $19.04, Crude Oil at $103
  • Bonds: US 10 year yield at 2.434

FX Flows:

  • AUD – AUD/USD fell initially as the Capex data was mixed, but the second estimates of the 2014/15 expenditure turned out to be higher than expected, which led to a squeeze in the pair. We are now approaching the 0.93 level, where offers from macro funds are reported. To the downside, bids are building at 0.9240-50, while 0.92 continues to be the pivotal short-term level. Cross flows were strong and AUD-positive with system funds buying AUD/NZD and selling EUR/AUD as it broke sub-1.47. Plenty of stops were triggered in AUD/NZD as it breached the 1.09 level and the next big resistance level lies at 1.0991 (200 DMA). Interest in the pair has been increasing in the past few months and a break above 1.10 will see more leveraged funds rushing into a long position.
  • CAD – Lots of selling from prime brokers in USD/CAD overnight as the pair fell below 1.0870. Bids from corporate names reported from 1.0840 down to the big figure. Offers lined up at 1.0880.
  • EUR – EUR/USD was quiet overnight. There are decent bids at 1.3590 and larger offers don’t start until 1.3630. Yesterday, we saw heavy selling coming from both corporations and the hedge fund community which weighed on the pair. The failure to bounce led to a break beneath the 1.36 barrier option and we reached a low of 1.3589. EUR/JPY has found support near the 200 DMA, but a clear break sub-138.30 could attract further selling and keep the EUR offered.
  • JPY – USD/JPY continues to be under pressure as US yields are heading lower. Bids seen at 101.60 and 101.30, while to the topside, offers are resting ahead of the 102.00 level. Several important data releases out of the US could move the pair, though some Tokyo contacts are convinced that it will be stuck in a 101.40-101.90 range.

 Upcoming Events:

  • 12:30 GMT – US GDP (-0.5 %)
  • 12:30 GMT – US Personal Consumption (3.1 %)
  • 12:30 GMT – US Initial Jobless Claims (317K)
  • 14:00 GMT – US Pending Home Sales (1.0 % MoM, -8.9 % YoY)
  • 23:30 GMT – Japanese CPI (3.4 % YoY)
  • 23:30 GMT – Japanese CPI Ex-Food/Energy (2.3 % YoY)
  • 23:30 GMT – Tokyo CPI (3.0 % YoY)
  • 23:50 GMT – Japanese Industrial Production (-2.0 % MoM, 4.5 % YoY)