Overnight Developments

  • ANZ Job Ads for June +4.3% vs -5.7% prior
  • Australia: Ai-group PCI 51.8 vs 46.7
  • Kuroda: Japan economy is recovering moderately as a trend; BoJ will check risks and adjust policies as needed
  • Goldman shifts Fed rate rise forecast to Q3 2015 from Q1 2016
  • New Zealand: QV June House Prices 8.0% y/y vs 8.2% prior
  • North Korea releases statement calling for an end to confrontation
  • The Nikkei is down -0.08% at 15,430, the ASK is flat at 5,532.6, the Hang Seng is down -0.24% at 23,491 and the Shanghai Composite is down -0.34% at 2,052.
  • Gold is down -0.27% at 1,317.8, Silver is down -0.43% at 21,108 and Crude is up +0.24% at 104.02.
  •  The US 10YR is up +0.36% at 2,658%.

COT Update

  • DXY: Specs increased shorts into the cutoff at 80.00 but buying was noted into the close
  • Amongs the comm-dolls, there has been an inflow of capital last week with more focus on Cad.
  • Amongst European FX, interest was more towards Gbp longs than Euro shorts.
  • Amongst Safe-Haven FX, there has been Jpy buying noted, and Chf shorts remain steady.
  • Speculative interest is highest in Gbp overall and lowest in Eur overall.
  • Most crowded trades: Gbp(FX), Crude (Commodities).

Data on the Docket

Main events this week:

Monday: AUD AiG construction index, GER Ind. Prod. (bearish expectations), CAD Ivey PMI + Building Permits

Tuesday: NZD Nzier business conf., AUD NAB Business Confience, GER Trade Balance + CA Balance (bearish expectations), UK Ind. Prod. + Manuf. Prod. (bullish expectations), US Chain store sales + Redbook

Wednesday: CNY CPI, AUD Westpac Cons. Sentiment, FOMC Minutes, Crude Oil Inventories

Thursday: AUD Employment data (bullish expectation), CNY Trade Balance, UK Trade Balance (bullish expectations) + BOE Decision

Friday: CAD Unemployment data

FX Update

It’s been another very slow start to the interbank trading week with most of the major pairs hanging around Friday’s closing levels. Volatility seems to be creeping up behind us in some fashion.

USD slightly firmer against most currency pairs, the only reason I can think of it 10 Treasury Yields are rising towards 2.6600, slightly firmer from Friday’s close of 2.6480.

NZDUSD took a beating in early trade. It looks like off-shore sellers, probably Japanese, are behind the fall. None of the local banks seem to know what’s going on and seeing as the selling started around the time of the Tokyo open in the 8750s, this suggests that the selling is coming from that direction. There are also likely to be weak trailing stops below .8715 hourly lows and the market could well be chasing after them. Bids are seen at 8700, with stops at 8695 and more bids/stops at 8650. Offers at 8780 with stops at 9790 ahead of the 8800 barrier.

AUDUSD opened for business at 9368, little changed from Friday’s close (9365), this morning has seen a narrow 9359 to 9373 range and we presently trade at 9360. Support is seen at 9322, 61.8% fibo on the 9209 / 9505 rise, resistance seen at 9396, 38.2% fibo on the 9505 / 9327 fall. Local corporate demand is cited between 9300/15, importer supply touted between 9375/85. There is no significant data to drive the markets, direction likely to be taken from equities.

USDJPY opened at 102.04 and has seen a narrow 101.98/102.14 range. Japanese importer demand is being touted between 101.80/90, more down between 101.60/70, topside, exporter supply clustered 102.30/40. In the absence of economic data, large option expiry’s at 102.00 could prove magnetic. Support seen at 101.78, 200 DMA.

EURUSD stiill boring as ever, trading currently 3585 and offers seen at 3675 with stops at 3680 and more offers at 3690. Small bids just below market with stops/bids at 3575 and macro bids at 3550.

GBPUSD is down from 7166 to 7130s on the back of USD strength. Stops/offers noted at 7160/75 with stops 7180 and offers at 7190/7200. Small sell stops at 7130 with macro bids at 7100.

Data on Tap today (all times GMT)


Good Luck today.