Market Roundup
- RBA holds OCR at 2%, lower AUD needed policy needs to be accommodative.
- BoJ Gov Kuroda - Discussed global economy in meeting with PM Abe, did not discuss FX, reiterates FX levels must reflect fundamentals, stay stable.
- Japan EconMin Amari - Caution needed on declaring end to deflation, too early for BoJ to debate exit, BoJ working to up CPI to target in stable manner, timing-methods BoJ purview, policy framework to allow ease if prices fall and tighten if prices rise too much, CAPEX more positive, consumer spending key.
- Japan FinMin Aso - Eyeing FX moves closely.
- Japan April real wages +0.1% y/y, 1st rise in 2-yrs, total cash earnings +0.9% but overtime pay -2.3%.
- Japan end-May monetary base up to new record trln, +35.6% y/y.
- European leaders, IMF agree to work with intensity on Greece.
- Australia Q1 c/a deficit A$10.7 bln, A$10.8 bln eyed, net exports to add 0.5% to GDP, no impact eyed.
- Australia Q1 government spending +0.4% to A$70.3 bln.
- NZ Q1 terms of trade index +1.5% q/q, first rise in 3 quater, export volumes +1.4%, import prices -5.1%, export prices -3.7%, +1.7%/+2.4%/-4.5%/-3.1% eyed.
Economic Data Ahead
- (0300 ET/0700 GMT) Spain May unemployment; last 118.9k.
- (0330 ET/0730 GMT) Sweden Q1 current account balance; last SEK62.8 bln surplus.
- (0355 ET/0755 GMT) Germany May unemployment, 2.76 mln nsa eyed; last 2.76 mln nsa, 2.79 mln sa.
- (0355 ET/0755 GMT) Germany May unemployment, -10k, 6.4% sa eyed; last -8k, 6.4%.
- (0430 ET/0830 GMT) UK April consumer credit, GBP1.0 bln eyed; last bln.
- (0430 ET/0830 GMT) UK April mortgage approvals/lending, 63k/GBP1.9bln eyed; last 61.34k/1.83.
- (0430 ET/0830 GMT) UK April money supply M4; last +0.3%.
- (0430 ET/0830 GMT) UK May construction PMI, 55.0 eyed; last 54.2.
- (0500 ET/0900 GMT) Euro Zone April producer prices, +0.1% m/m, -2.0% y/y eyed; last +0.2%, -2.3%.
- (0500 ET/0900 GMT) Euro Zone May inflation - flash, +0.2% y/y eyed; last unchanged, ex-f/e +0.6%.
- (0945 ET/1345 GMT) US May ISM-New York index; last 681.70.
- (1000 ET/1400 GMT) US April factory orders, unchanged m/m eyed; last +2.1%, ex-transport -0.1%.
- (1330 ET/1730 GMT) US May total vehicle sales, 17.0 mln AR eyed; last 16.5 mln.
Key Events Ahead
- N/A OECD Forum '15 in Paris (till tom)/08:15 ECB Nouy in panel discussion.
- N/A ESM E1.5 bln 3-month bill, Belgium E2-2.5 bln each 3/6-mo TC auctions.
- N/A Spain 10-year benchmark syndication Caixa, Citi, HSBC, JPM, MS, Santander.
- (0500 ET/0900 GMT) Greek CB Gov Stournaras speech in London.
- (0530 ET/0930 GMT) ECB refinance tender at fixed 0.05%, E90 bln allotment expected, last E101.1 bln.
- (0630 ET/1030 GMT) UK DMO bln 2.0% 2025 Gilt auction.
- (1000 ET/1400 GMT) Fed Gov Brainard speech at CSIS in Washington, DC.
FX Recap
EUR/USD is supported above 1.0900 levels and currently trading at 1.0926 levels. It has made intraday high at 1.0933 and low at 1.0914 levels. Today Spain and Germany will release Job data while Euro Zone will release CPI, Core CPI data. Italian banks will be closed in observance of National Day. Initial support is seen at 1.0859 and resistance is seen around 1.1041 levels.
USD/JPY is supported above 124.50 levels and posted a high of 125.04 levels. It has made intraday low at 124.59 and currently trading at 124.72 levels. Initially the pair decline with the first round of US economic data but then following the Manufacturing ISM jumped to the upside and accelerated after breaking above 124.40/50. Today in Asian session, Japan released monetary base data with positive numbers and 10 year bond auction. Near term resistance is seen at 125.39 levels and support is seen at 124.31 levels.
GBP/USD is supported just above $1.5200. It made an intraday high at 1.5211 and low at 1.5189 levels. Today UK will release construction PMI data, which provides further direction to the parity. Initial support is seen at 1.5167 and resistance is seen around 1.5305 levels.
USD/CHF is supported above 0.9450 levels and trading at 0.9444 levels and made intraday low at 0.9442 and high at 0.9465 levels. Today is no major data expecting from the Switzerland. Near term support is seen at 0.9285 levels and resistance is seen at 0.9571 levels.
AUD/USD is supported above 0.7600 levels and trading at 0.7648 levels. It has made intraday high at 0.7661 levels and low at 0.7602 levels. The Aussie was boosted and jumped nearly 40 pips after the central bank left its monetary policy unchanged today, while keeping doors open for further rate cuts depending on economic conditions. In addition, RBA also repeating its too strong Aussie dollar comment with Governor Glenn Stevens stating it was both necessary and likely that the Australian dollar would depreciate further. Initial support is seen at 0.7619 and resistance at 0.7752 levels.
