Global Markets:

  • New Zealand (NZD) RBNZ Interest Rate Decision: 3.25%, Expected: 3.25%, Previous: 3.00%
  • Australia (AUD) Employment Change: -4.8k, Expected: +10.0k, Previous: 10.3k
  • Australia (AUD) Unemployment Rate s.a. (MAY): 5.8%, Expected: 5.9%, Previous: 5.8%
  • Australia (AUD) Consumer Inflation Expectation (MAY): 4.0%, Previous: 4.4%
  • Japan (JPY) Core Machinery Orders (y/y): 17.6%, Expected: 13.2%, Previous: 16.1%
  • United Kingdom (GBP) RICS Housing Price Balance (MAY): 57%, Expected: 52%, Previous: 54%
  • RBNZ’s Wheeler says he is surprised that the exchange rate has not declined. Wheeler says he wants to see higher long-term rates
  • RBNZ says it expects inflationary pressures to increase, RBNZ says the inflationary pressures are expected to increase
  • RBNZ says economic expansion has considerable momentum, says NZD will decline with commodity prices
  • Asia stock markets: Nikkei down 0.80 %, Shanghai Composite and Hang Seng lost 0.20 %, ASX declined 0.30 %
  • Commodities: Gold at $1260, Silver at $19.16, Crude Oil at $104.56
  • Bonds: US 10 year yield at 2.639

FX Update:

  • AUD – AUD/USD trading lower this morning after weaker than expected domestic employment data. Heavy position covering and fast money sales in AUD/NZD increased the pressure on the Aussie. Good bids from macro funds at 0.9320/30, while offers lined up at 0.9425.
  • CAD – USD/CAD has extended losses to 1.0858 overnight. Aside from the general strength in commodity currencies & USD weakness, oil prices could be another factor as geopolitical risks are increasing again. There will be very good bids from 1.0820 down to 1.08 and it will need a clear break beneath the big figure to accelerate downside momentum.
  • EUR – Flows have been light during the past few sessions and there is little to report. With no significant risk events this week and plenty of huge option expiries, the pair will likely consolidate between 1.3520 and 1.3570.
  • JPY – In USD/JPY, dealers see offers at 102.20 (also a tech resistance level with the 55 HMA located there), while good buying interest is reported at 101.70. EUR/JPY continues to trade lower and has broken beneath the May low at 137.98 yesterday. A close below it could then see a deeper fall towards the 61.8% retracement of the November 2013/December 2013 rally at 136.76/74, followed by the February low at 136.23. Resistance shows at 138.45 initially, followed by 139.19. A break above 140.11 is needed to ease the immediate downside bias.
  • NZD – NZD/USD is posting fresh highs as we approach the London open. RBNZ hiked rates by 25 bps as forecast, but the statement was more hawkish than expected. Resistance now at 0.8694 and then 0.8744. Initial support at 0.8580 and then the key short-term tech level at 0.8520.

Upcoming Events:

  • 06:45 GMT – French HICP (0.1 % MoM, 0.8 % YoY)
  • 08:00 GMT – ECB Monthly Report
  • 09:00 GMT – Euro Zone Industrial Production (0.4 % MoM, 0.9 % YoY)
  • 12:30 GMT – US Retail Sales (0.6 % MoM)
  • 12:30 GMT – US Core Retail Sales (0.4 % MoM)
  • 12:30 GMT – US Initial Jobless Claims (310k)
  • 15:15 GMT – Bank of Canada Governor Poloz speaks