Global Markets: 

  • Asian stock markets: Nikkei and Shanghai Composite down 0.50 %, Hang Seng and ASX declined 0.20 %
  • Commodities: Gold at $1281 (+0.15 %), Silver at $19.46 (+0.15 %), Crude Oil at $93.60 (+0.25 %)
  • Rates: US 10 year yield stands at 2.38 

News & Data:

New Zealand Trade Balance MoM -692M, Expected: -475M, Previous: 247M

  • New Zealand Trade Balance YoY 1290M, Expected: 1490M, Previous: 1200M
  • New zealand Exports 3.70B, Imports 4.39B
  • Japan CSPI 3.7, Expected: 3.7 %, Previous: 3.7 % 

FX Overview: 

  • AUD – Commodity currencies came under pressure at the Tokyo open and AUD/USD fell to 0.9270. Cross flows have been one reason why the Aussie held relatively well the past few days, but both AUD/JPY and AUD/NZD look ripe for a retracement, so we could see some AUD weakness in the coming few sessions. Bids are reported at 0.9250 down to 0.9240. Key technical support remains at 0.92; a break below that level would trigger plenty of stops. To the topside, offers seen towards 0.9320 with technical resistance at 0.9340-50.
  • CAD – USD/CAD almost rose to 1.10 ahead of the Tokyo open, but option-related supply capped the topside once again. The pair then declined back to 1.0970 as the CAD regained some strength. It is really struggling to take out that 1.10 level, but a breakout still seems likely and there are plenty of stops resting above. Solid resistance then seen around 1.1050/60.
  • CHF – EUR/CHF reached a low of 1.2070 yesterday and there is talk of large bids from the Swiss National Bank at 1.2060.
  • EUR – The strong divergence in monetary policy outlook will keep the Euro under pressure for some time ahead. Speculation about possible QE from the ECB is growing and the currency will especially struggle against high-yielding units as the AUD and NZD in the medium-term. In the Asian session, EUR/USD has been able to recover from a low of 1.3177 and it rose back to 1.32. It still has not closed the weekend gap, but it seems London could try to go for the topside stops at 1.3230. Offers noted at 1.3220 and in better size towards 1.3250.
  • JPY – USD/JPY is overbought in the short-term and it is likely we will see a retracement towards 103.20/30 support before the uptrend will resume. Overnight, Japanese exporters and leveraged names were noted sellers and there have been profit-taking flows in the popular carry trades (AUD/JPY & NZD/JPY) in the early session. Solid support at 103.50 and then 103.20/30. Stops reported through 103.40. To the topside, offers at 104.20 in good size and then resistance at 104.50, 104.90 and 105.44. 

Upcoming Events: 

  • 12:30 GMT – US Durable Goods Orders (7.5 % MoM)
  • 12:30 GMT – US Core Durable Goods Orders (0.5 % MoM)
  • 13:00 GMT – US House Price Index (0.3 % MoM)
  • 13:00 GMT – US S&P HPI Composite (1.0 % MoM, 8.4 % YoY)
  • 14:00 GMT – US CB Consumer Confidence (89.0)
  • 14:00 GMT – US Richmond Manufacturing Index (8)