Market Roundup
- United States May Federal budget,$ decrease to -82.4 bln $ (fcast -98.0 bln $) vs prev 157.0 bln $
- India 12M current account $ increase to -27.5 bln $ vs prev -32.40 bln $
- ECB's Coeure says if a country were to leave the euro area, that would be a serious warning sign for europe
- ECB's Coeure says will not allow excessive fluctuations in markets to threaten objective of price stability in medium term
- German spokesman says will only accept Greek deal approved by three institutions, all else is pure invention
- Merkel govt may be satisfied with Greece committing to at least one reform to open door to bailout funds - BBG
- Eurogroup's Dijsselbloem says deal with Greece still possible only a few issues remain; still open to alternatives but last Greek proposals not of sufficiently high standard
- ECB raises emergency funding cap for Greek banks by EUR 2.3b
- OPEC says oil market oversupply to ease, but raises output again
- Japan EconMin Amari: Forex market seems to have misinterpreted Kuroda remarks on yen
- BR IPCA Inflation Index YY May 8.47%, forecast 8.32%, previous 8.17%, inflation marches higher BCB likely hikes 50bps at next COPOM
- (1950 ET/ 2350 GMT) Japan Foreign Bond Investment w/e (previous -348.4b)
- (1950 ET/ 2350 GMT) Japan Foreign Invest JP Stock w/e (previous 574.2b)
- (1950 ET/ 2350 GMT) Japan Business Survey Index Q2 (previous 2.4)
- (2130 ET/ 0130 GMT) Australia Employment May (consensus 11.0k, previous -2.9k)
- (2130 ET/ 0130 GMT) Australia Full Time Employment May (previous -21.9k)
- (2130 ET/ 0130 GMT) Australia Participation Rate May (consensus 64.8%, previous 64.8%)
- (2130 ET/ 0130 GMT) Australia Unemployment Rate May (consensus 6.2%, previous 6.2%)
- (0130 ET/ 0530 GMT) China Urban investment (ytd)yy May (consensus 12%, previous 12%)
- (0130 ET/ 0530 GMT) China Industrial Output YY May (consensus 6%, previous 5.9%)
- (0130 ET/ 0530 GMT) China Retail Sales YY May (consensus 10.1%, previous 10%)
- (1700 ET/ 2100 GMT) NewZealand Cen Bank Interest Rate (consensus 3.5%, previous 3.5%)
FX Recap
EUR/USD seems to consolidate around the 1.1300 mark after climbing as high as 1.1380 following the Kuroda-effect during this morning. Markets cautious ahead of meeting between Merkel, Tsipras and Hollande to be held in the European evening. At the time of writing, the pair is trading at 1.1305 up 0.20% on the day. Next hurdle is at 1.1387 (high Jun 10) followed by 1.1400 (psychological level) and then 1.1450 (high May 18). Supports are seen at 1.1271 (low Jun 10), 1.1214 (low Jun 9) and finally 1.1179 (low Jun 4). Option expiries for Thursday 11 June: 1.1200 (705M), 1.1230-70 almost 2BLN, 1.1350-60 (1.1BLN), 1.1375, (750M), 1.1400 (1.2BLN)
USD/CAD: Weak tone in the US Dollar after Kuroda comments is dragging the USD/CAD down. USD/CAD dropped 150 pips from 1.2350 to test the 1.2200 level on broad USD weakness. Oil is falling hard from near 1-month highs this morning also weighing on USD/CAD. The pair found buying interest and now operates 60 pips back at 1.2260. Currently, USD/CAD is trading at 1.2260, down 0.63% on the day, having posted a daily high at 1.2354 and low at 1.2202. Beyond 1.2200, resistnces are at 1.2280, 1.2300 and 1.2350. To the downside, supports are at 1.2200, 1.2180 and 1.2130. Option expiries for Thursday 11 June: 1.2300 (270M), 1.2425 (705M)
USD/JPY down over 200 pips on the back of BoJ Kuroda comments on the value of yen. The Japanese yen appreciated broadly and dragged USD/JPY to a low of 122.45. USD/JPY recovery attempts have been capped by the 123.00 mark and the pair is going through a consolidation phase. Currently the pair is trading at 122.74, down 1.26% on the day. Immediate supports are located at 122.45 (daily low), 122.00 (psychological level) and 121.48 (May 26 low). Resistances are seen at 123.00 (psychological level), 123.35 (intraday resistance) and 123.85 (Jun 9 low). Option expiries for Thursday 11 June: 122.00 (455M), 123.00 (645M), 124.00 (450M)
GBP/USD rose sharply throughout the European session and scored a high of 1.5540. Cable pulled back slightly from a 3-week high at the beginning of the New York session but it has managed to hold above the 1.55 mark. Data showed UK NIESR GDP estimate rose 0.6% in May, beating expectations of 0.4%, but the pound failed to capitalized gains as the rally was overstretched. Currently, GBP/USD is trading at 1.5535, up 0.98% on the day, having posted a daily high at 1.5556 and low at 1.5369. Immediate supports are seen at 1.5505 (200-day SMA), 1.5368 (daily low) and 1.5335 (10-day SMA). On the upside, resistances are at 1.5540 (daily high), 1.5587 (May 20 high) and 1.5600 (psychological level). Option expiries for Thursday 11 June: 1.5200 (520M), 1.5400 (329M)
