Global Markets: 

  • Asian stock markets: Nikkei up 0.50 %, Shanghai Composite dropped 0.70 %, Hang Seng gained 0.10 %, ASX rose 0.20 %
  • Commodities: Gold at $1155.90 (-0.50 %), Silver at $15.33 (-1.80 %), Crude Oil at $73.83 (-0.50 %)
  • Rates: US 10 year yield at 2.354, UK 10 year yield at 2.182, German 10 year yield at 0.80

News & Data: 

  • ECB’s Noyer says that ECB could buy debt if policy not having effect
  • Japan EconMin Amari: If Japan sales tax hike delayed, may need to consider if economic stimulus steps are needed
  • Japan’s Ruling LDP Tax Panel Chief Noda says Shinzo Abe hasn’t given up on raising sales tax
  • Noda says Abe’s idea is to postpone tax rise until future date
  • Noda says timing of tax hike depends on economic assessment
  • Japan’s Finance Minsiter Aso says hard to meet primary balance goal if sales tax denied

Markets Update: 

The US Dollar strengthened across the board in Asia, as the USD/JPY rallied through the 116.00 level. A delay of the planned sales tax hike seems more and more likely, but we will have to wait for Japan PM Abe’s press conference early next week. Dealers report that the buying in USD/JPY was led by Japanese banks and a large hedge fund was later seen on the bid as well. Stops through 116.10/15 got cleared and the pair extended gains towards 116.28. There are barrier options at 116.50 and 117.00 and offers in front of those levels, but they won’t be much of an obstacle if we get strong US econ data later in the day. The next key resistance level is 117.95 (October 2007 peak). Intraday, the key levels are 115.70 and 115.40 to the downside and 116.50 to the topside.

In GBP/USD, some large stops got triggered as we broke through the 1.57 level and the selling continued throughout the session. The pair is currently consolidating around 1.5655 and the next support level is seen at 1.5600/10. Meanwhile, EUR/USD is approaching the 1.24 level. The focus lies on the Euro Zone inflation numbers, which will be released at 1000 GMT, and it is unlikely we’ll see a breakout ahead of that event. Large stops reported through 1.2385, with major support noted at 1.2350/55. To the topside, offers are lined up at 1.2475/80, with 1.2530 the pivotal resistance level.

Upcoming Events: 

  • 07:00 GMT – German GDP (0.1 % QoQ, 1.0 % YoY)
  • 09:00 GMT – Italian GDP (-0.1 % QoQ, -0.4 % YoY)
  • 10:00 GMT – Euro Zone CPI (0.0 % MoM, 0.4 % YoY)
  • 10:00 GMT – Euro Zone Core CPI (0.7 % YoY)
  • 10:00 GMT – Euro Zone GDP (0.1 % QoQ, 0.7 YoY)
  • 13:30 GMT – US Core Retail Sales (0.2 % MoM)
  • 13:30 GMT – US Retail Sales (0.2 % MoM)
  • 13:30 GMT – Canadian Manufacturing Sales (1.3 % MoM)
  • 14:55 GMT – Michigan Consumer Sentiment (87.5)