Global Markets:

  • China (CNY) Chinese PPI (y/y): -1.4%, Expected: -1.5%, Previous: -2.0%
  • Australia (AUD) ANZ Job Advertisements (MAY): -5.6%, Previous: 2.2%
  • Australia (AUD) NAB’s Business Confidence (MAY): 7, Previous: 6
  • Japan (JPY) Tertiary Industry Index (APR) (m/m): -5.4%, Expected: -3.3%, Previous: 2.4%
  • United Kingdom (GBP) BRC Retail Sales Monitor (y/y): 0.5%, Expected: 1.6%, Previous: 4.2%
  • New Zealand (NZD) Manufacturing sales (Q1): 0.5%, Previous: 6.3%
  • Australia sells $200 Mln in 5 year 1% yielding indexed bonds. Demand was 5.34 times offer.
  • South Korea Finance Ministry says it will keep a close eye on the Fed’s Taper and Yen’s weakening
  • IMF: Welcoming RBNZ’s shift to policy tightening, NZD may fall if global monetary conditions tightened
  • Asia stock markets: Nikkei is down 0.50 % while Shanghai Composite, Hang Seng and ASX all gained 0.40 % on the day
  • Commodities: Gold at $1254, Silver at $19.05, Crude Oil at $104.60
  • Bonds: US 10 year yield at 2.59

FX Update:

  • AUD – AUD/USD spent the day in an unusual tight range and overnight flows were also light. Demand for carry should remain stable and the Australian Dollar will likely strengthen even more against currencies like the Euro and Swiss Franc. In AUD/USD, better bids seen at 0.9320 while stops are resting through 0.9315 and in better size through 0.9290. Retail traders are said to be short AUD and selling into rallies and hence, there are stop clusters above 0.9380 and 0.94.
  • CAD – USD/CAD is under pressure again as commodity currencies remain fairly bid. The pair breached the 1.09 level again overnight and is now consolidating around the big figure. Key technical support levels at 1.0967 and 1.0921, while bids reported at 1.0880 from domestic names and good demand sub-1.0820 towards the 1.08 barrier option. To the topside, offers from leveraged funds building towards 1.0950 with stops above 1.0960 growing.
  • CHF – USD/CHF again slowly approaching that 0.90 level, but traders will be wary of rushing into a long trade given the recent fake breakout. Above 0.90, resistance at 0.9035 and then offers into 0.9050.
  • EUR – EUR/USD went for the stops above 1.3660 in yesterday’s early London session and quickly reversed, hitting a low 1.3581 later in the day. The move was mostly flow-driven given the lack of news/events yesterday, with leveraged funds adding to short positions and fast money accounts selling the breakout sub-1.36. Solid support at 1.3580 and there was talk of sizeable bids resting at that level. Dealers report that buying interest for the EUR/USD will be better beneath 1.3550 and that Asian reserve managers will be bidding from 1.3520 down to 1.35. To the topside, initial resistance will be at 1.3620 and then strong selling interest from 1.3660 towards 1.3680. Overnight, the pair was caught in a 7 pips range and looking ahead, there are no important risk events out of the Euro Zone today.
  • GBP – 1.6780 held again yesterday. Domestic industrial & manufacturing production dana should bring some volatility today. Good bids at 1.6760, while offers at 1.6840-50.
  • JPY – Selling from Japanese exporters and some specs covering their positions drove the USD/JPY lower overnight. There are large bids at 102.10-20 and those levels should hold today. Below, stops through 102.00 and not much support until 101.80. To the topside, Japanese names offering the pair at 102.50, while other Asian names are said to have good selling interest 102.70/80. With no important US data releases today, the pair should be consolidating in a 102.10-102.60 range.

Upcoming Events:

  • 05:45 GMT – Swiss Unemployment Rate (3.1 % n.s.a, 3.2 % s.a.)
  • 06:45 GMT – French Industrial Production (0.4 %)
  • 07:15 GMT – Swiss Retail Sales (3.5 %)
  • 08:00 GMT – Italian Industrial Production (0.4 % MoM, 0.6 % YoY)
  • 08:30 GMT – UK Industrial Production (0.4 % MoM, 2.8 % YoY)
  • 08:30 GMT – UK Manufacturing Production (0.4 % MoM, 4.0 % YoY)
  • 09:00 GMT – Italian GDP (-0.1 % QoQ, -0.5 % YoY)
  • 14:00 GMT – NIESR GDP Estimate
  • 14:00 GMT – US JOLTs Job Openings (4.04M)