Global Markets:

  • Australia (AUD) Westpac Consumer Sentiment: 0.2%, Previous: -6.8%
  • Japan (JPY) CGPI (y/y): 4.4%, Expected: 4.1%, Previous: 4.1%
  • New Zealand (NZD) NZ Card Spending (MAY) (m/m): 1.7%, Previous: -0.4%
  • New Zealand (NZD) Electronic Card Retail Sales (y/y): 7.6%, Expected: 5.6%, Previous: 5.7%
  • Asia stock markets: Nikkei up 0.30 %, Shanghai Composite and ASX dropped 0.30 % and Hang Seng declined 0.40 %
  • Commodities: Gold at $1262, Silver at $19.25, Crude Oil at $104.48
  • Bonds: US 10 year yield at 2.646

FX Update:

  • AUD – AUD/USD remains bid amid good demand for high yielding currencies. There will be offers at 0.9400-10, but the path of least resistance seems to be the topside. A test of the 0.9458 resistance level looks likely in the near-term.
  • CAD – USD/CAD dropped overnight as a hedge fund was a noted seller of EUR/CAD. Bids from local corporate names resting at 1.0880. Minor offers at 1.0920 and increasing towards 1.0950. Large stops above 1.0960. Not much of risk events out of Canada this week, but the main one in Manufacturing Sales on Friday.
  • EUR – EUR/USD has spent the Asian session in a 1.3520-1.3546 range. Dealers report there were good bids at 1.3520 resting on the interbank platforms, which kept the pair supported. A big option expiry at 1.3525 (€1.4 billion) might keep price close to the current levels. Bids reported ahead of 1.35 from Asian reserve managers and sell stops from momentum funds just beneath.
  • GBP – GBP/USD has been under pressure the past few sessions and hit a low of 1.6736 overnight. The key level to the downside is 1.6690 and there are plenty of stops resting just beneath. To the topside, initial resistance at 1.6775-80. US investment bank Morgan Stanley has put out a recommendation to clients to buy GBP/USD at 1.6770 with a 1.6670 stop loss order and 1.71 target. They note that the UK econ recovery is becoming more broad-based and sustainable and they expect GBP strength to be emphasised on the crosses, adding that there is still scope for a GBPUSD move higher in the coming months. UK rate expectations are likely to increase and hence, a retest and even a breach of the 1.70 area is possible before GBPUSD comes under pressure.
  • JPY – USD/JPY is struggling despite rising US yields in the past two sessions. Banks report that there are sizeable offers at 102.40-50, while bids are gathering from 102.10 down to 102.00. Tech support at 102.14-16, which is the Ichimoku Cloud baseline and 50 DMA. Large stops sub-102.00 and a break lower would likely trigger momentum selling as well. With no significant US data releases, a 102.00-102.50 range seems likely today.

Upcoming Events:

  • 08:30 GMT – UK Claimaint Count Change (-25k)
  • 08:30 GMT – UK Unemployment Rate (6.7 %)
  • 13:45 GMT – MPC Member Broadbent speaks
  • 21:00 GMT – Reserve Bank of New Zealand Interest Rate Decision & Monetary Policy Statement
  • 21:05 GMT – RBNZ Governor Wheeler speaks