Global Markets:

  • Asian stock markets: Nikkei up 0.75 %, Shanghai Composite lost 0.60 %, Hang Seng fell 0.90 %, ASX gained 0.85 %
  • Commodities: Gold at $1230 (-0.10 %), Silver at $17.14 (-0.25 %), Crude Oil at $81.08 (+0.10 %)
  • Rates: US 10 year yield at 2.289, UK 10 year yield at 2.237, German 10 year yield at 0.892

News & Data:

  • ECB fails 25 banks in health check but problems largely solved
  • Rousseff narrowly wins second term in Brazil

CFTC Positioning Data:

  • EUR net short 159k vs net short 155k prior
  • JPY net short 72k vs 101k net short prior
  • GBP net short 4k vs net short 3k prior
  • AUD net short 32k vs net short 30k prior
  • CAD net short 22k vs net short 16k prior
  • CHF net short 18k vs net short 17k prior
  • NZD net short 2k vs net short 2k prior

Markets Overview:

Asian stock markets are mixed with the Nikkei and ASX up on the day, but Shanghai Comp and Hang Seng weak. Gold fell to a low of $1227 in Asia, but bounced from there and is currently trading near the opening level. Similar price action in Silver. Crude Oil consolidated in a $80.85-81.25 range. The main headline from the weekend was that 25 banks have failed the ECB stress test, but that was already expected from the leaked report last week. Further, the central bank said that most have repaired their finances since then. The reaction to the report was positive overall, as some were expecting worse results.

EUR/USD was well bid in the Asian session and hit a high of 1.2715 earlier. Offers reported at 1.2740, while intraday support noted at 1.2660 and then 1.2620. USD/JPY declined on sales from exporters and profit-taking from specs. Bids reported at 107.80, but in better size towards 107.40. To the topside, the key s/t resistance level remaind 108.40.

The Week Ahead:

On Monday, the focus will be on German IFO data and US Pending Home Sales figures. The following day, there are no Tier 1 data releases in the APAC & European session, but the US will release Durable Goods Orders and CB Consumer Confidence numbers. On Wednesday, Japan will publish Industrial Production figures. We’ll have another data-light European & US session until the FOMC statement at 18:00 GMT. Two hours later, the RBNZ will decide on interest rates and release their statement.

Thursday will bring German unemployment data, with the unemployment rate expected to remain unchanged at 6.7 %. Later in the day, the US will release their GDP numbers, followed by German inflation figures. Finally, on Friday, the Bank of Japan will decide on interest rates and hold a press conference shortly after. In the European session, we’ll get Euro Zone inflation data and Canadian GDP in the US session.

Upcoming Events:

  • 09:00 GMT – German IFO Business Climate Index (104.3)
  • 09:00 GMT – German IFO Business Expectations (98.9)
  • 09:00 GMT – German IFO Current Assessment (110.0)
  • 09:00 GMT – Euro Zone M3 Money Supply (2.2 %)
  • 13:45 GMT – US Services PMI (58.0)
  • 14:00 GMT – US Pending Home Sales (0.5 %)