Global Markets: 

  • Asian stock markets: Nikkei down 0.15 %, ASX gained 0.50 %, Hang Seng and Shanghai Comp closed for a holiday
  • Commodities: Gold at $1207 (-0.40 %), Silver at $16.92 (-0.80 %), Crude Oil at $91.50 (+0.40 %)
  • Rates: US 10 year yield at 2.50 

News & Data: 

  • Australia Retail Sales 0.1 %, Expected: 0.4 %, Previous: 0.4 %
  • China Manufacturing PMI 51.1, Expected: 51.0, Previous: 51.1
  • Japan Tankan Large Manufacturers Index 13, Expected: 10, Previous: 12
  • Japan Tankan Large Non-Manufacturers Index 13, Expected: 17, Previous: 19 

FX Overview: 

USD/JPY took out the 110.00 level overnight and hit a high of 110.05. Dealers report heavy offers at 110.10 and large stops resting above that level and through 110.20. Another barrier option is eyed at 110.50, but with 110 resistance taken out, it is unlikely to be much of an obstacle. We’ll likely see some USD position covering ahead of NFP, but this could still run a bit higher from here. Better bids noted at 109.50, while stops in good size expected through 109.40.

EUR/USD fell to fresh multi-year lows yesterday as the Euro Zone inflation figures disappointed. Solid support for now at 1.2580, but rallies are likely to be limited. Good selling interest reported towards 1.2670/80. Cable has been dragged lower as well by this move and failure to hold above the 1.62 level suggests we could see a test of the 1.6050 level soon. Key intraday resistance at 1.6230, while support seen at 1.6160.

AUD/USD declined on weaker than expected Retail Sales data out of Australia and is now approaching the current yearly low at 0.8658. We’ll likely see some profit-taking from shorts around this support area. Next major support noted at 0.85. 

Upcoming Events: 

  • 07:45 GMT – Italian Manufacturing PMI (49.4)
  • 07:50 GMT – French Manufacturing PMI (48.8)
  • 07:55 GMT – German Manufacturing PMI (50.3)
  • 08:00 GMT – Euro Zone Manufacturing PMI (50.5)
  • 08:30 GMT – UK Manufacturing PMI (52.5)
  • 12:15 GMT – US ADP Nonfarm Employment Change (210k)
  • 13:45 GMT – US Manufacturing PMI (58.2)
  • 14:00 GMT – US ISM Manufacturing PMI (58.5)