Global Markets: 

  • Asian stock markets: Nikkei up 0.10 %, Shanghai Comp lost 0.10 %, Hang Seng gained 0.90 %, ASX rallied 0.60 %
  • Commodities: Gold unchanged at $1300, Silver up 0.20 % at $20.62, Crude Oil up 0.10 % at $101.10
  • Rates: US 10 year yield at 2.466 

FX Update: 

  • AUD – AUD/USD declined yesterday as the USD gained strength across the board. Banks have seen macro funds selling, as well as short-term specs liquidating their long positions. Overnight, flows were light and the pair spent the session in a 0.9374-88 range. Dealers report bids from Asian sovereign names at 0.9370 and stops in good size through 0.9340. To the topside, offers are lined up at 0.9420. Expect further consolidation until the key US data releases later today. In the crosses, AUD/JPY has been very quiet despite the gains in USD/JPY, and as long as the commodity currencies remain under pressure, we can’t expect a clear breakout above 96.10 resistance. AUD/NZD posted fresh highs yesterday and there is now little resistance until 1.1080. It is likely we will see some profit-taking around these levels and specs are now waiting for dips towards 1.0950 to try a long position.
  • CAD – USD/CAD extended gains to 1.0865 in yesterday’s US session and managed to close the day near that level. There was plenty of short covering in the pair during the past few sessions and technicals suggest further gains are ahead, with next key resistance at 1.0945/50. Much depends now on the US data releases we will get over the next three days, as well as the Canadian GDP figures tomorrow. Support seen at the 200 DMA at 1.0838, resistance at the 100 DMA at 1.0893.
  • EUR – EUR/USD is still struggling to take out the 1.34 barrier option, but it seems just a matter of time. Specs are likely to give it another try at the London open and there are plenty of trailing stops & stops from system funds that could accelerate the move should we indeed see a break lower. Dealers report stops developing above 1.3430 and 1.3450 and good selling interest starting at 1.3450.
  • GBP – GBP/USD continues to trade lower amid position covering, hitting a low of 1.6932 yesterday. Intraday support lies at 1.6910 and good US data could lead to a test of the 1.6850 level.
  • JPY – USD/JPY pushed higher yesterday, taking out the 102.00 DNT and stops above. The topside was capped as exporters had good selling interest around the 102.20 level and they continue to have offers resting near that level. The pair was supported overnight by month-end demand from importers. Leveraged names have bids resting at 101.90-95 and importers at 101.80. Trailing stops in better size starting at 101.75.
  • NZD – The Fonterra news yesterday hit the Kiwi and eventually lead to a break sub-0.85. Leveraged names are eager to sell into rallies, but unless US econ numbers disappoint, any larger rally seems unlikely at this point. Solid resistance at 0.8560. 

Upcoming Events: 

  • 07:00 GMT – Spanish CPI (0.2 % YoY)
  • 07:00 GMT – Spanish GDP (0.5 % QoQ, 1.1 % YoY)
  • 09:00 GMT – Euro Zone Consumer Confidence (-8.00)
  • 12:00 GMT – German CPI (0.2 % MoM, 0.8 % YoY)
  • 12:15 GMT – US ADP Nonfarm Employment Change (230k)
  • 12:30 GMT – Canadian RMPI (0.6 % MoM, 9.0 % YoY)
  • 12:30 GMT – US GDP (3.0 % QoQ)
  • 18:00 GMT – Fed Interest Rate Decision (0.25 %)
  • 18:00 GMT – FOMC Statement