Global Markets: 

  • Asian stock market: Nikkei up 0.40 %, Shanghai Composite gained 0.45 %, ASX fell 0.60 %, Hang Seng declined 1.90 %
  • Commodities: Gold at $1217, Silver at $17.47, Crude Oil at $92.98
  • Rates: US 10 year yield at 2.53 

News & Data: 

  • RBNZ sold NZ$521m in reserves, the most since 2007
  • New Zealand Prime Minister John Key: The goldilocks level for the $NZDUSD is 0.65
  • China may have targeted measures amid slow growth (BBG) 

CFTC Positioning Data: 

  • EUR net short 142k vs 137k net short prior
  • JPY net short 105k vs 83k net short prior
  • GBP net short 1k vs 6k net short prior
  • AUD net long 8k vs 22k net long prior
  • CAD net long 3k vs 8k net long prior
  • CHF net short 14k vs 11k net short prior
  • NZD net long 2k vs 1k net long prior 

FX Overview: 

The New Zealand Dollar dropped sharply overnight as the RBNZ data showed that the central bank intervened in the FX market recently. While the bank has been warning the markets for a while now about an overvalued NZ$, traders got caught by surprise that it intervened during falling prices. Comments from Prime Minister Key that 0.65 would be an appropriate level for the NZD/USD added to the bearish sentiment. The pair bounced off 0.7708, with 0.77 now being the pivotal support level in the near-term. AUD/USD declined in sympathy with the NZD/USD, from 0.8770 to 0.8692. While the AUD is likely to remain offered in the near-term, dealers expect to see plenty of profit-taking interest ahead of the key 0.8658 support level (yearly low), so that should limit the downside for a while. Meanwhile, USD/CAD is consolidating around 1.1170. There are larger barrier option structures at 1.12, which could slow the upside momentum over the next few sessions. Stops are resting above and then not much resistance seen until 1.1250.

USD/JPY was quiet overnight. Bids from local names reported at 109.00 and down to 108.80, while larger selling interest resting in front of the 110.00 level. In EUR/USD, bids ahead of 1.2650, while trailing stops seen through 1.2710. Cable hit a low of 1.6210 at the open, has recovered to 1.6240 bit later and is now consolidating around 1.6225. Chart support noted at 1.6160 and then 1.6050. 

Upcoming Events: 

  • 07:00 GMT – Spanish HICP (-0.3 % YoY)
  • 08:30 GMT – UK M4 Money Supply
  • 09:00 GMT – Euro Zone Consumer Confidence (-11.0)
  • 12:00 GMT – German CPI (-0.1 % MoM, 0.8 % YoY)
  • 12:30 GMT – US Personal Spending (0.4 % MoM)
  • 12:30 GMT – US Personal Income (0.3 % MoM)
  • 12:30 GMT – US Core PCE Price Index (0.1 % MoM)
  • 14:00 GMT – US Pending Home Sales (-0.1 % MoM)