Global Markets:

  • Asian stock markets: Nikkei down 1.20 %, Shanghai Composite gained 0.20 %, Hang Seng and ASX unchanged
  • Commodities: Gold at $1252, Silver at $19.02, Crude Oil at $102.81
  • Bonds: US 10 year yield at 2.61

COT Positioning Report:

  • EUR short contracts rose to 57,185 in the week ended June 10 vs 33,025 shorts in the previous week, fifth straight increase and most bearish since May 2013, according to the CFTC
  • AUD longs rose to 28,247 vs 21,527 in the previous week, most bullish since April 2013
  • JPY shorts rose to 82,162 contracts vs 74,218 shorts in the previous week, most bearish since April 8
  • GBP long contracts rose to 35,842 vs 34,974 longs in the previous week, most bullish since May 6
  • CAD shorts rose to 24,108 contracts vs 22,731 in the previous week, most bearish since May 20
  • CHF shorts rose to 3,030 contracts vs 2,012 contracts, most bearish since May 27

The Week Ahead:

Sentiment is mixed in the global markets, led by the increasing geopolitical tensions. Terrorist groups are threatening to push Iraq into another civil war and the conflict in Ukraine is getting bloodier. On the other side, macro fundamentals continue to improve with solid data out of the developed economies, especially the UK.

Bank of England Governor Carney surprised markets with a hawkish speech late Thursday and the Pound jumped immediately. GBP/USD failed to breach the 1.70 level, but upside momentum is likely to remain strong over the coming days. Price action in the cross pairs have also been interesting and EUR/GBP broke below key support area.

Looking ahead, we have the Euro Zone CPI release today, with the market expecting -0.1 % month-to-month and 0.5 % year-on-year. The US session will be more quiet with US Industrial and Manufacturing Production being the only important data releases.

Tuesday will bring the UK CPI release, expected at 0.2 % MoM and 1.7 % YoY. This is followed by the German ZEW Survey results and US CPI later in the day. On Wednesday, the Bank of England will release it’s meeting minutes and as the main event of the week, the Fed will decide on interest rates and the quantitative easing programme. A few hours later, New Zealand GDP figures will be released, with the forecast being 3.8 % YoY.

The Swiss National Bank will decide on interest rates and the EUR/CHF floor on Thursday and UK will release Retail Sales data shortly after. In the North American trading sessions, the main event will be US Initial Jobless Claims.

Friday sees a very light econ data calendar for Asia and Europe and there are no key releases until Canadian CPI figures, at 12:30 GMT.

 

Upcoming Events:

  • 09:00 GMT – Euro Zone CPI (-0.1 % MoM, 0.5 % YoY)
  • 12:30 GMT – US NY Empire State Manufacturing Index (15.00)