Global Markets:

  • Australia Private Sector Credit (m/m): 0.5%, Expected: 0.4%, Previous: 0.4%
  • New Zealand Building Permits s.a. (APR) (m/m): 1.5%, Previous: 8.3%
  • New Zealand (NZD) Money Supply M3 (APR) (y/y): 5.3%, Previous: 5.0%
  • Japan Unemployment Rate: 3.6%, Expected: 3.6%, Previous: 3.6%
  • Japan Industrial Production (m/m) [P]: -2.5%, Expected: -2.0%, Previous: 0.7%
  • Japan National CPI Ex Food, Energy (APR) (y/y): 3.1%, Previous: 0.7%
  • Japan National CPI Ex-Fresh Food (APR) (y/y): 3.2%, Expected: 3.1%, Previous: 1.3%
  • Japan Tokyo CPI ex Fresh Food (MAY) (y/y): 2.8%, Expected: 2.9%, Previous: 2.7%
  • Japan Vice Minister Furusawa says recent CPI readings show country has found its way out of deflationary cycle
  • Japan Fin Min Aso says country’s economic pick up in 3Q should be fast
  • Asian Stock Markets: Nikkei down 0.60 %, Shanghai Composite lost 0.30 %, ASX fell 0.20 % and Hang Seng rose 0.20 %
  • Commodities: Gold at $1258, Silver at $19, Crude Oil at $103.38
  • US 10 year yield at 2.468
  • Bonds: US 10 year yield at 2.468

 FX Flows:

  • AUD – AUD/USD is trading above 0.93 again and the Australian Dollar continues to outperform + being bid across the board. The pair is struggling a bit with 0.9320 at the moment, but a clear break above should pave the way for a 0.94 test. With option structures cleared until 0.95, the path to further gains should be more easy this time.
  • CAD – USD/CAD is weak ahead of today’s Canadian GDP release, where he market is expecting a 1.8 % increase quarter-on-quarter. Demand from local corporates has kept the pair bid around 1.0825, but a test of the 1.08 barrier option seems imminent.
  • EUR – EUR/USD spent the NY session in a 1.3595-1.3625 range, while in Asia, we saw a consolidation between 1.3598 and 1.3611. Macro funds were reported sellers above 1.3620 and are said to have more selling interest towards 1.3640. To the downside, bids are rebuilding at 1.3590. Cross flows were mixed as EUR/JPY continues to trade with an offered tone, while EUR/GBP is remaining relatively bid amid month-end flows.
  • GBP – GBP/USD cleared the stops sub-1.67 in the early London session yesterday and flows were rather light for the rest of the day. Similar to the EUR/USD, Cable rallied to a fresh intraday high ahead of the NY Open, but failed to sustain upside momentum. Key support at 1.6660, while good resistance at 1.6740/50. Above there, stops through 1.6760 and sizeable offers into 1.6780.
  • JPY – USD/JPY traded lower overnight despite the bounce in US yields. Dealers in Asia say that month-end flows from corporate names kept the pair offered and drove it to a session low of 101.50. USD/JPY will likely stay under pressure and there is talk of good selling interest at 101.80 from leveraged funds and then pre-102.00 from local names. To the downside, 101.40 is now key intraday support and stops are building beneath. Japanese investors have solid buying interest around 101.20 and some profit-taking from short-term specs is expected ahead of 101.00.

 Upcoming Events:

  • 06:00 GMT – German Retail Sales (1.5 % YoY)
  • 07:00 GMT – Swiss KOF Leading Indicator (102.1)
  • 09:00 GMT – Italian CPI (0.0 % MoM, 0.6 % YoY)
  • 12:30 GMT – Canadian GDP QoQ (1.8 %)
  • 12:30 GMT – Canadian GDP (0.1 % MoM, 2.3 % YoY)
  • 12:30 GMT – Canadian Industrial Product Price (0.3 % MoM)
  • 12:30 GMT – Canadian Raw Materials Price Index (0.4 % MoM)
  • 12:30 GMT – US Personal Spending (0.2 %)
  • 12:30 GMT – US Personal Income (0.3 %)
  • 13:45 GMT – US Chicago PMI (60.8)
  • 13:55 GMT – US UoM Consumer Confidence (82.5)