Market Roundup
- CFTC IMM CTA data - Spec bearish USD bets highest since Feb ’13, EUR net shorts lowest since May ’14, 23.6k contracts, JPY longs off but still 61.5k.
- Reuter’s poll – Wall Street gives up on June Fed rate hike post-payrolls.
- Japan Fin Min Aso, BoJ DepGov Iwata – US Treasury report won’t serve as constraint to Japan FX policy, Japan ready to intervene unilaterally on rapid one-sided moves, volatility, US doesn’t believe policy to be inappropriate, size of supplementary budget won’t be affected by FX moves - Reuters.
- BoJ March Policy Board minutes – Some concerns over consumer sentiment, inflation trend improving but CPI coming in lower than expected.
- Japan March real wages +1.4% y/y, total cash earnings +1.4%, overtime -0.2%, real wage gain largest since September ’10.
- China FX trading moves into shadows as Beijing tightens screws – Reuters.
- China end-April FX reserves $3.22 trln, $3.20 trln eyed, end-March $3.21 trln, second monthly rise this year, surprise rise in March too.
- China April trade surplus $45.56 bln $40 bln eyed, exports -1.8% y/y, imports -10.9%, -0.1% and -5.0% eyed, details not so good.
- How the BoE would deal with a Brexit, expect a big intervention Thursday - Telegraph.
- German “doom loop” cure could be worse than banks’ disease – Reuters.
- Australia PM dissolves both houses of parliament, calls July 2 poll amid economic slowdown, instability – Reuters.
- Australia April job ads -0.8% m/m, newspapers -6.2%, internet -0.7%.
- Crude oil futures surge 2% as Canada wildfires threaten supply, knock out more than 1 mln bpd of capacity – Reuters.
Economic Data Ahead
- (0430 ET/0830 GMT) EZ May Sentix index, 6.1 eyed; last 5.7.
- (1000 ET/1400 GMT) US Apr employment trends index; last 127.5.
Key Events Ahead
- (0405 ET/0805 GMT) BoE DepGov Bailey speech in London.
- (0510 ET/0910 GMT) Chicago Fed Evans speaks at London forum.
- (0530 ET/0930 GMT) Germany E3 bln 6-month Bubill auction.
- (0855 ET/1255 GMT) France E3.2-3.6/0.8-1.2/0.8-1.2 bln 3/6/12-month BTF note auctions.
- (1300 ET/1700 GMT) Minny Fed Kashkari speech in Minneapolis.
- (1800 ET/2200 GMT) SF Fed Williams at San Francisco event.
FX Recap
USD: The dollar index was a touch firmer at 93.951. The dollar initially fell on Friday after headline payrolls data showed the U.S. economy added the fewest jobs in seven months in April But the market was quick to reverse positions on closer look at the numbers, which showed an encouraging pick-up in annual wage growth.
EUR/USD: The euro hovered just above 1.14 marks against US dollar and trading around $1.1408 marks. The Intraday bias remains neutral for the moment. A sustained break above $1.1466 will drag the parity up towards key resistances at $1.1529/$1.1622/$1.1785 and $1.1833 marks. Key supports are seen at $1.1314/$1.1215.
USD/JPY: The Japanese Yen remains well supported above 107.00 marks against US dollar. Intraday bias remains bullish for the moment. A daily close below 106.92 will drag the parity down towards key supports at 106.15, 105.71, 105.45 and 104.55 levels respectively. Alternatively, reversal from key support will take the parity higher towards key resistances at 107.87, 109.49, 111.23, 112.60 and 113.42 levels respectively. Japan's average cash earnings rose 1.4% year-on-years in March, coming in stronger than the median analyst forecast of a 0.6% increase and 0.7% m/m previous release.
GBP/USD: The Sterling erases previous loss against the US dollar on Monday and supported around $1.4426 marks. A daily close above $1.46 will take the parity up towards key resistances at $1.4769 levels. Alternatively, reversal from key resistance will drag the parity down at $1.4357 marks.
AUD/USD: The Australian dollar edged up to $0.7380, from a two-month trough of $0.7338 set on Friday. The Aussie fell above 1 percent on Friday after the central bank slashed its inflation forecasts and US NFP job results. Key support levels are seen at 0.7337 and $0.7285 marks. On the top side, key resistance levels are seen at $0.7463 and $0.7602 marks.
NZD/USD: The New Zealand dollar nudged up $0.6845, from a four-week low of $0.6807 touched last week. It slipped 2 percent last week, its second-largest drop this year, after the RBA's easing reinforced expectations of a similar move by the New Zealand central bank. Key support was found at $0.6808. Resistance was seen at around $0.7054.
Equities Recap
Japan's Nikkei 225 index rallied 0.62% to 16,206.26 points on Monday morning in Tokyo, while the broader Topix index surged 1.03% to 1,311.69 points.
Chinese markets opened on a mixed note, with Hong Kong's benchmark Hang Seng index was trading 0.51% higher to 20,213.87 points, but the Shanghai Composite slid 0.93% to 2,886.05 points.
South Korea's Kospi index fell 0.56% to 1,966.34 points.
Australia's S&P/ASX 200 index was trading 0.14% lower to 5,284.70 points on Monday morning in Sydney.
New Zealand's benchmark S&P/NZX 50 index traded 0.13% lower at 6,889.36 points on Monday.
Commodities Recap
Oil prices jumped on Monday as a huge wildfire in Canada's oil sand region knocked out over a million barrels in daily production capacity, contributing to a significant tightening of markets over the past weeks. U.S. crude futures jumped 84 cents or 1.9 percent to $45.50 per barrel by 0707 GMT, rising for a fourth session in a row. International Brent crude rose 62 cents, or 1.4 percent, to $45.99 a barrel.
Spot gold edged lower on Monday, but remained supported in the face of a firm dollar as investors bet a weaker U.S. payroll report would push out the timing of any rate hike. Spot Gold eased 0.2 percent to $1,286.11 an ounce by 0145 GMT, after hitting a five-month high last week, and is consolidating within a $1,268-$1,303 trading band. Spot gold closed little changed last week after a 5 percent jump the week before.
Treasuries Recap
New Zealand government bonds eased, sending yields between 0.5 and 2 bps higher across the curve.
Australian government bond futures recoiled from recent peaks, with the three-year bond contract unchanged at 98.440, but a whisker away from a record of 98.460. The 10-year contract shed 4 ticks to 97.6800, while the 20-year contract lost 5.5 ticks to 97.0600.
