Market Roundup
- EUR/USD dives under 1.1200 as ECB signals further action, plays 1.1160/1.1326.
- Dollar index up almost 1% to 95.050. 93.135 was Friday's low.
- Sterling falls after inflation turns negative.
- GBP/USD hits 8 day low at 1.5525. EUR/GBP rises to 0.7215 fm 0.7150.
- ECB Coeure: To frontload asset purchases in May/Jun due to low market liquidity in Jul/Aug.
- ECB Noyer: ECB ready to take further action to meet inflation target.
- UK April CPI 0.2% m/m, -0.1% y/y vs previous 0.2%/0.0%. 0.4%/0.0% expected.
- UK April PPI core o/p NSA 0.0% m/m, 0.1% y/y vs previous 0.0%/0.1%. 0.0%/0.1% expected.
- UK March ONS house prices 9.6% y/y vs 7.4% in February.
- Germany May ZEW Econ sent 41.9 vs previous 53.3. 49.0 expected.
- Germany May Current conditions 65.7 vs previous 70.2. 68 expected.
- Euro zone March Euro stat trade NSA 23.4bln vs previous 20.3bln. 22.8bln expected.
- Euro zone April Inflation final 0.2% m/m, 0.0% y/y vs previous 1.1%/0.0%. 0.2/0.0% expected.
- Austrian Finmin- Not as optimistic as Greece that Athens can reach deal with creditors in coming days.
Economic Data Ahead
- (0745 ET/1145 GMT) Retail Economist.com/GS Weekly Chain Store Sales Index (May 16 week).
- (0830 ET/1230 GMT) US Housing Starts (Apr) consensus 1.019 mln, previous 0.926 mln.
- (0830 ET/1230 GMT) US Building Permits (Apr) consensus 1.060 mln, previous 1.042 mln.
- (0855 ET/1255 GMT) US Redbook Same Store Sales Index (May 16 wk) previous +2.1% y/y.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 30-year Fannie Mae/Freddie Mac (max $2.000 bln).
- (1145 ET/1545 GMT) RBI Gov Rajan speaks at Economic Club of NY; FRB NY's Dudley presides.
- (1430 ET/1830 GMT) US Treasury Secretary Lew/Fed Chair Yellen (et al.) participate in FSOC meeting; Washington, DC.
FX Recap
EUR/USD broke 1.1200 levels and made a new intraday low at 1.1160 levels. It is currently trading around 1.1204 levels. The pair has broken intraday major support 1.1218 and this confirms short term weakness, a decline till 1.1120 cannot be ruled out. Today Germany ZEW economic sentiment as well as Euro zone CPI data came with negative numbers. 1.1316 is an immediate resistance and if that holds we may see a short dip. Initial support is seen around 1.1120 levels.
USD/JPY is trading higher at 120.07, having posted a daily high at 120.11 levels and low at 119.82 levels. Today is data free session for JPY. 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 118.85 levels.
GBP/USD extends losses, falls below $1.55 for first time since May 11 to $1.5499, down 1 pct on day and trading around 1.5502 levels. It made intraday high at 1.5669 and low at 1.5496 levels, after the UK CPI data it has seen the immediate resistance at 1.5737, above which gains could be extended to 1.5800 levels. On the other side, support is seen at 1.5392 levels.
USD/CHF is trading above 0.9300 levels and made intraday low at 0.9244 and high at 0.9362 levels. CHF depreciated after negative retail sales data as well as SNB board member Zurbruegg told to newspaper interview Swiss that Franc still greatly overvalued against the euro. Today is data free session for CHF. Near term support is seen at 0.9070 levels and resistance is seen at 0.9293 levels.
AUD/USD is supported below 0.8000 levels and trading around 0.7973 levels. It has made intraday high at 0.8010 levels and low at 0.7956 levels. Today RBA released monetary policy meeting minutes which suggested that further interest rate cuts are still on the table, even after the bank lowered the cash rate to a record-low 2% at the May meeting. Initial support is seen at 0.8044 and resistance at 0.7866 levels.
