Market Roundup
- US housing starts/building permits data beat lifts USD, erases early UST Coeure-related gains
- Atlanta Fed GDPNow sees US econ on track to grow 0.7% in Q2, unchanged from May 13
- Bank of Canada's Poloz growth partially rebounding in Q2 '15, January rate cut is working
- Fonterra Dairy prices fall 2.2%, volumes drop at auction -NZ's Fonterra
- Mexico's Carstens most likely will have to raise rates, further cuts unlikely
- Peru'S central bank sells $150 mln, Sol weakens to end bidding 3.155 per dollar
- BoC'S Poloz: U.S. labor market indicators remain very solid
- (2030 ET/ 0030 GMT) Australia Consumer Sentiment May (previous -3.2%)
- (1950 ET/ 2350 GMT) Japan GDP QQ Q1 0.4%, (consensus 0.38%, previous 0.4%)
- (1950 ET/ 2350 GMT) Japan GDP QQ Annualised Q1 1.5%, (consensus 1.6%, previous 1.5%)
- (1950 ET/ 2350 GMT) Japan GDP QQ Pvt Consmp Prelim Q1 0.2%, (consensus 0.19%, previous 0.5%)
- (1950 ET/ 2350 GMT) Japan GDP QQ Capital Expend. Q1 0.8%, (consensus 0.82%, previous -0.1%)
- (1950 ET/ 2350 GMT) Japan GDP QQ External Demand Q1 -0.1%, (consensus -0.01%, previous 0.2%)
- No Significant Events
FX Recap
GBP/USD: Fall in UK CPI and a strong USD dents cable. GBP/USD continues to retreat from 5-month highs and is about to end Tuesday with a decline of 150 pips, the worst day since May 1. GBP/USD slipped to 1.5600 after UK CPI data and then extended further south as the US dollar rallied across the board. The pair found support at 1.5440/50, after hitting a 8-day low and bounced, trimming losses. The recovery lost strength around 1.5530 and during the last hours cable remained steady hovering around 1.5500. Release of Bank of England and Federal Reserve minutes on Wednesday in focus. Option expiries for Wednesday 20 May: 1.5690 (597M), 1.5600 (500M), 1.5450 (273M)
AUD/USD saw sharp declines and during the last hours and is hovering around 0.7910. The pair is on track to post the fourth daily decline in a row. It has fallen around 250 pips from last Thursday's peaked at 0.8160. Today the pair dropped below the daily 20-SMA for the first time since early April. The aussie was weakened by RBA minutes that signaled that the door for another rate cut is still open. Option expiries for Wednesday 20 May: AUD/USD: 0.7900 (332M). NZD/USD: 0.7250 (522M)
USD/JPY: US dollar remains on a positive note on Tuesday. Upbeat momentum in US yields combined with good US housing sector data added extra legs to the USD rally. USD/JPY is now hovering over session tops above 120.70, just shy of April's tops at 120.84. Next hurdle lies at 120.84 (high Apr 13) followed by 121.00 (psychological level) and finally 121.16 (76.4% of 122.04-118.33). Supports on the downside are seen at 119.83 (low May 19), 119.51 (Kijun Sen) and then 119.27 (low May 18). Option expiries for Wednesday 20 May: 119.75 (840M), 120.00 (730M)
EUR/USD: Dovish comments from an ECB official and better than expected US data weigh on EUR/USD. The pair is about to close its second day in a row with losses, down nearly 200 pips throughout the day. The pair broke below its 100-day SMA and hit a 2-week low of 1.1118 during the American session, managed to recover a few pips over the last hours and it is currently trading at the 1.1155 zone, still 1.39% below its opening price. Supports are seen at 1.1118 (daily low), 1.1100 (psychological level) and 1.1066 (May 5 low). Resistances are seen at 1.1175 (100-day SMA), 1.1285 (10-day SMA) and 1.1300 (psychological level). FOMC minutes tomorrow will be the risk event during the NY session, while Friday's US inflation numbers will be closely watched by investors. Option expiries for Wednesday 20 May: 1.1100 (356M), 1.1200 (221M)
EUR/CAD edges lower despite drop in WTI, down on the back of the sell-off in the euro when the market reacted to ECB's Coeuré's statement. Meanwhile the Canadian dollar was weak on the collapse in oil of over $3.50 in WTI while USD/CAD was down over a cent. EUR/CAD is currently trading at 1.3637 with a high of 1.3768 and a low of 1.3579.
