Global Markets: 

  • Asian stock markets: Nikkei up 1 %, Shanghai Composite gained 0.50 %, Hang Seng dropped 0.10 %, ASX is unchanged on the day
  • Commodities: Gold at $1214 (-0.40 %), Silver at $17.58 (-0.70 %), Crude Oil at $92.66 (-0.15 %)
  • Rates: US 10 year yield at 2.56 

News & Data: 

  • RBA Governor Stevens: RBA is open to using macroprudential measures to address risks posed by speculative lending
  • RBNZ Governor Wheeler: New Zealand Dollar’s current level is unjustified and unsustainable
  • Wheeler: Would welcome a move to more sustainable levels for Kiwi. Says lack of sustainability could be intervention factor 

FX Overview: 

  • AUD – AUD/USD failed to break above 0.89 yesterday amid heavy offers in front of the level. The Aussie Dollar held well for a while, supported by a weaker Euro, which drove EUR/AUD lower. USD buying resumed however in the early Asian session and the pair fell from the session open of 0.8875 to 0.8815. Selling was led by leveraged funds and fast money names and there were plenty of stops triggered on the break of the 0.8830 support level. The charts suggest there is little support until the yearly low of 0.8658 and it seems we’ll see a test of that level fairly soon. Intraday, dealers report option-related bids ahead of 0.88, while offers are building at 0.8870-80. AUD/NZD hit a high of 1.1040 on the Wheeler comments and resistance next seen in the 1.1090-1.11 area. Meanwhile, AUD/JPY reversed yesterday’s gains and is approaching once again the 96.00 level. There is talk of larger stops beneath that level and through 95.80, so a breakout would likely intensify downside momentum.
  • CAD – USD/CAD finally broke above 1.11 yesterday, but failed to sustain momentum above there and closed the day below the level. The pair is likely to stay bid though and dealers report bids at 1.1050 and large around 1.1020. To the topside, offers eyed at 1.11040-50 and then pre-1.12 in better size.
  • EUR – EUR/USD was the first one to break lower against the USD. There wasn’t really a catalyst, but the USD strength then spread across the FX space. The pair is now approaching key support at 1.2750 and next support then is seen at 1.2660.
  • JPY – USD/JPY is back above 109. Asia reports offers in front of the 109.50 barrier in solid size and then heavy offers from 109.80 up to the 110.00 level. To the downside, bids reported at 108.80 and then 108.40-50. 

 

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