Market Roundup
- GBP/USD hit 5 month high at 1.5749 after wage pick up, lower after Inflation Report.
- GBP/USD slips to 1.5635 after Carney GBP view, 200MA at 1.5618.
- BoE Carney - Sterling strength relevant to interest rate path.
- EUR/GBP down to 0.7123 fm 0.7184, back to 0.7175.
- UK April Claimant count -12.6k s previous -16.7k revised. -20.0k expected.
- UK March ILO Unemployment rate 5.5% vs previous 5.6%. 5.5% expected.
- UK Average weekly earnings 1.9% y/y in 3months through Mar vs previous 1.7%. 1.7% expected.
- Germany Q1 GDP flash estimate 1.1% y/y vs 1.6% Q4, 1.2% expected.
- Euro Zone Q1 GDP flash estimates 0.4% q/q, 1.0% y/y vs previous 0.3%/0.9%. 0.5%/1.1% expected.
- Euro Zone March Industrial production -0.3% m/m, 1.8% y/y vs previous 1.0%/1.9% revised. 0.0%/1.8% expected.
- BOE: Rate rise broadly in line with market expectation would be consistent with returning inflation to target.
- BOE sees lower growth due to higher interest rates, stronger Sterling, less home building/weaker production.
- ECB Coeure: Euro FX rate now is good for competitiveness but ECB has no FX target.
- Coeure: Risks remain high, recovery mostly supported by weak euro and low oil prices.
- BOJ Gov Kuroda: Important for Japan take measures to avoid increasing risk premium for JGBs.
- RBNZ Gov Wheeler: High NZD unsustainable, want further fall.
- Oil glut worsens as OPEC market-share battle just beginning - IEA.
Economic Data Ahead
- (0830 ET/1230 GMT) US Retail Sales (April), consensus +0.2% m/m, previous +0.9% m/m.
- (0830 ET/1230 GMT) US Ex-Autos Retail Sales, consensus +0.5% m/m, previous +0.4% m/m.
- (0830 ET/1230 GMT) US Control Retail Sales, consensus +0.5% m/m, previous +0.4% m/m.
- (0830 ET/1230 GMT) US Import Prices (April), consensus +0.3% m/m, previous +0.4% m/m.
- (0830 ET/1230 GMT) US Export Prices (April), consensus +0.1% m/m, previous +0.1% m/m.
- (1000 ET/1400 GMT) US Business Inventories (March), consesnus +0.2% m/m, previous +0.3% m/m.
- (1030 ET/1430 GMT) EIA Weekly Petroleum Statistics.
- (1100 ET/1500 GMT) KC Fed Labour Market Conditions Indicators (April).
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 30-year Ginnie Mae (max $875 mln).
- (1430 ET/1830 GMT) Fed Trade operation 15-year Fannie Mae/Freddie Mac (max $575 mln).
FX Recap
EUR/USD is supported above 1.1200 levels and currently trading at 1.1225 levels. German prelim GDP data was negative, CPI figures were positive and EMU GDP again with negative numbers. Pair slipped to 1.1202 levels. Immediate resistance is seen at 1.1300 levels, above which gains could be extended to 1.1346 (Feb 10 High) levels. On the down side, support is seen at 1.1134 (Today's Low) below which it could extend losses to 1.1070 (April 30 Low) levels. Option expiries are at 1.1145 (789M), 1.1205 (589M), 1.1260 (431M), 1.1300 (267M).
USD/JPY turns downside and currently trading below 120.00 levels and made high of 119.97 levels. Japan released current account data with positive numbers. Another data from Japan was economy watchers sentiment, released with positive numbers. On the top side, the next resistance is located at 120.30 (May 1 High) levels and above which it could extend gains 120.54 (May 5 High) levels. Immediate support might be located at 120, below that at 119.43 (May 11 Low) levels. Option expiries are at 119.25 (300M), 119.50 (350M), 120.00 (233M), 120.50 (280M).
GBP/USD made a new high at 1.5747 levels and then slipped downside at 1.5634, largely on the back of UK job data as well as inflation report. In today's Inflation Report, the BoE revised down wage growth for 2015 and said it sees CPI inflation rising "notably" and hit the 2% target in Q2 2017. The BoE revised slightly upwards its short-term inflation outlook, but unexpectedly revised down its medium-term CPI projections, while economy is seen growing slower than estimated in February. The pair has an immediate resistance at 1.5700 above which gains could be extended to 1.5757 (Dec 17 High) levels. On the other side, support is seen at 1.5600.
USD/CHF is supported well below 0.9300 levels and trading around 0.9274 levels. It has made a intraday high at 0.9293 and low at 0.9248 levels. Today is data free session for Switzerland. Near term support is seen at 0.9195 levels and resistance is seen at 0.9367, 0.9412 levels.
AUD/USD is trading at 0.8025 and made intraday high at 0.8032 levels. There was less data today for Australia, wage price index data was released with flat numbers. Aussie fell in red after the release of a slew of downbeat Chinese data which re-ignited demand concerns from Australia's top trading partner amid a deepening Chinese slowdown. Markets now eagerly await US retail sales data due later in the day for further momentum on the pair. Initial support is seen at 0.7952 and resistance at 0.8076 levels. Option expiries are at 0.8000 (700M). NZD/USD: 0.7350 (265M), 0.7425 (278M).
