- Europe asks if Greece could default without exiting EUR, what happens if Greece misses payments.
- Greece Varoufakis- Won't present new reform proposals at Euro Group meeting.
- ECB Draghi seeks to keep ECB above Greek fray.
- BoJ Gov Kuroda - REER comment last wasn't allusion to nominal FX levels/JPY outlook, never said I don't want JPY to weaken, pros-cons to JPY weakness, FX stability reflecting fundamentals desirable, IOER hike option in QQE exit.
- BoJ DepGov Iwata - BoJ has enough capital buffers to withstand QQE exit.
- Japan Fin Min Aso - '17 sales tax hike of utmost importance but difficult if economy in contraction, must avoid such situations.
- China trying a policy twist to cut borrowing costs.
- US April net overall capital flows +$106.6 bln, March revised -$95.2 bln, net long-term flow +$38.1 bln, March rev +$9.1 bln.
- RBA June meeting minutes - Policy should be accommodative now, further AUD fall both likely and necessary, growth to remain below trend, inflation well contained, recent China data more positive.
- Samurai bonds on funding menu for Aussie banks.
- Australia May new vehicle sales at -1.3% m/m, +0.8% y/y.
- (0430 ET/0830 GMT) UK May CPI, +0.2% m/m, +0.1% Y/Y eyed; last +0.2%, -0.1%.
- (0430 ET/0830 GMT) UK May RPI, +0.3% m/m, +1.1% y/y eyed; last +0.4%, +0.9%.
- (0430 ET/0830 GMT) UK May RPIX, +0.3% m/m, +1.1% y/y eyed; last +0.4%, +0.9%.
- (0430 ET/0830 GMT) UK May PPI output, +0.1% m/m, -1.6% y/y eyed; last +0.1%, -1.7%.
- (0430 ET/0830 GMT) UK May - core output, unchanged m/m, +0.1% y/y eyed; last unchanged, +0.1%.
- (0430 ET/0830 GMT) UK May PPI input,+0.4% m/m, -11.4% y/y eyed; last +0.4%, -11.7%.
- (0500 ET/0900 GMT) Euro Zone Q1 employment; last +0.1% q/q, +0.9% y/y.
- (0500 ET/0900 GMT) Germany June ZEW economic sentiment index, 37.1 eyed; last 41.9.
- (0500 ET/0900 GMT) Germany June ZEW current conditions index, 63.0 eyed; last 65.7.
- (0830 ET/1230 GMT) US May housing starts, 1.1 mln units AR eyed; last 1.14 mln, +20.2% m/m.
- (0830 ET/1230 GMT) US May building permits, 1.1 mln units AR eyed; last 1.14 mln, +9.8% m/m.
Key Events Ahead
- N/A G20 Sherpas meeting in Bodrum, Turkey.
- N/A EC Dombrovskis in Vilnius for meetings with Lithuanian officials.
- N/A Austria CB conference in Vienna, various speakers (final day).
- N/A London BoE/IMF/HKMA conference, various speakers (till June 17).
- N/A ESM 6-mo, Spain 6/12-mo bill, Belgium 3/12-mo tsy certificate auctions.
- N/A Austria 10-yr EUR benchmark syndication via Barclays, Erste, HSBC et al.
- (0145 ET/0545 GMT) Swiss SECO latest economic forecasts.
- (0530 ET/0930 GMT) ECB refinance at fixed 0.05%, E90 bln allotment eyed, last bln.
- N/A FOMC begins two-day policy meeting.
- (0830 ET/1230 GMT) Canada April international securities transactions data.
- (1030 ET/1430 GMT) ECB Mersch testimony at TARGET2 EZ parliamentary hearing in Brussels.
- (1100 ET/1500 GMT) ECB/BdF Noyer speech in Paris.
FX Recap
EUR/USD is supported above 1.1200 levels and currently trading at 1.1280 levels. It has made intraday high at 1.1282 and low at 1.1261 levels. Pair traded between 1.1189 and 1.1295 on a choppy day of trading on Monday. Greece is running out of time before the final portions of its €240 billion bailout expire on June 30. It is unknown if Greece has enough cash in emergency reserve funds to meet a €1.1 billion loan repayment to the International Monetary Fund at the end of the month. On Monday, yields on Greece 2-Year surged almost 300 basis points to 26.6% as the possibility of a Greek deal waned. Investors await Thursday's meeting of euro zone finance ministers in Luxembourg for further developments in the saga. Today German final CPI, German ZEW economic sentiment and Euro zone employment change will be main focus in European trading session. Initial support is seen around 1.1144 and resistance is seen around 1.1386 levels.
USD/JPY is supported above 123.00 levels and posted a high of 123.79 levels. It has made intraday low at 123.30 and currently trading at 123.55 levels. Pair jumped to an intraday high of 123.79 after the Bank of Japan governor Kuroda clarified that he is not in opposition to the idea of further weakness in the Yen nominal exchange rate. Today Governor made his stance clear by stating that he never meant to predict the Yen outlook, nor he is against further weakness in the Yen nominal exchange rate. Near term resistance is seen at 124.57 and support is seen at 123.02 levels.
GBP/USD is supported above $1.5600 levels. It made an intraday high at 1.5612 and low at 1.5586 levels. Pair is currently trading at 1.5611 levels. Pair is trading higher after US Empire state manufacturing index as well as capacity utilization rate released with negative numbers. Today UK will release CPI data, which will provide further direction to the parity. Initial support is seen at 1.5486 and resistance is seen around 1.5689 levels.
USD/CHF is supported around 0.9300 levels and trading at 0.9295 levels and made intraday low at 0.9288 and high at 0.9315 levels. Today no major data is expecting from the Switzerland. Near term support is seen at 0.9242 levels and resistance is seen at 0.9372 levels.
AUD/USD is supported just above 0.7700 levels and trading at 0.7760 levels. It has made intraday high at 0.7779 levels and low at 0.7742 levels. The Reserve Bank of Australia gave few clues on future rate decisions in the release of minutes from its June 2 meeting, but suggested that the high level of the Australian dollar was continuing to dampen economic growth. The RBA refrained from giving an explicit easing bias in the minutes, instead saying that the bank was assessing information on economic and financial conditions. Initial support is seen at 0.7568 and resistance at 0.7811 levels.
NZDUSD is supported below 0.7000 levels and currently trading at 0.6987. It has made intraday high at 0.7008 and low at 0.6985 levels. The pair has moved along sideways of the downtrend that occurred when the RBNZ recently surprised markets and cut the OCR last week. Today is data free session for New Zealand, market will eye on NZD Current Account data due on tomorrow. Initial support is seen at 0.6946 and resistance is seen around 0.7055 levels.
