- Yen surges to 2 week high vs USD after Kuroda comments.
- USD/JPY hits 122.46 fm 124.63. EUR/JPY 138.55 fm 140.66.
- EUR up as 10-yr bund yields top 1%, easier into NY. EUR/USD plays 1.1272/1.1387.
- Dollar index hits 3 week low at 94.322 on yen, euro strength.
- BOJ Kuroda: Yen may not weaken much further on real effective exchange rate basis.
- 10-yr German bund yields topped 1 percent for the first time since September.
- UK April Industrial Output 0.4% m/m, 1.2% y/y vs previous 0.6%/1.1% revised. 0.1%/0.6% expected.
- UK April Manufacturing Output -0.4% m/m, 0.2% y/y vs previous 0.4%/1.2% revised. 0.1%/0.4% expected.
- ECB Liikanen- QE to be carried out until end-Sept 2016 and beyond if needed.
- EU official- Germany/France does not see point of meeting now; there has been no movement.
- Source- Growing number of German lawmakers intends to break with Merkel, on Greece.
- Greek Govt official- Still waiting for response from creditors on latest Greek proposal.
- No meet scheduled btw Hollande, Merkel, Greece's Tsipras in Brx on Wednesday.
- (0800 ET/1200 GMT) MBA Weekly Mortgage Application Activity Indices.
- (1030 ET/1430 GMT) EIA Weekly Petroleum Statistics.
- (1100 ET/1500 GMT) TR/Ipsos PCSI (Jun) (previous 56.68).
- (1100 ET/1500 GMT) KC Fed Labor Market Conditions Indicators (May).
- (1400 ET/1800 GMT) Treasury Budget (May) (IFRM $147.53 bn, prev $129.97 bn).
Key Events Ahead
- (1000 ET/1400 GMT) Quarterly Services Survey (Q1).
- (1145 ET/1545 GMT) Fed Trade operation 30-year Fannie Mae / Freddie Mac (max $1.750 bn).
FX Recap
EUR/USD is supported below 1.1300 levels and currently trading at 1.1295 levels. It has made intraday high at 1.1384 and low at 1.1270 levels. Today Italy and France released industrial production data with negative numbers. Initial support is seen at 1.1257 and resistance is seen around 1.1380 levels. Option expiries are at 1.1200 (630M), 1.1225-35 (400M), 1.1265 (458M), 1.1275-80 (460M).
USD/JPY is supported around 123.00 levels and posted a high of 124.61 levels. It has made intraday low at 122.44 and currently trading at 123.15 levels. The Yen surged to a 2-week high vs the dollar on Wednesday, after the BOJ's chief said the currency was unlikely to fall further because it was already "very weak", prompting investors to trim huge bets against the yen. These comments lifted the yen from last week's 13-year trough of 125.86 per dollar. Near term resistance is seen at 123.66 and support is seen at 122.45 levels. Option expiries are at 122.00 (1.65BLN), 123.00 (725M), 123.25 (440M), 123.75 (500M), 124.00 (910M), 124.25 (280M), 125.00 (380M), 125.25 (500M).
GBP/USD is supported above $1.5400 levels. It made an intraday high at 1.5487 and low at 1.5367 levels. Pair is currently trading at 1.5462 levels. Sterling rose on Wednesday, trading near two-week highs against the dollar after data showed British industrial output growing faster than expected in April. Sterling rose to $1.5447, up 0.45 percent on the day from around $1.5435 beforehand. It later pulled back to $1. euro trimmed gains to trade at 73.35 pence, having traded at 73.41 before the data was released. Initial support is seen at 1.5368 and resistance is seen around 1.5440 levels. Option expiry is at 1.5445-50 (355M).
USD/CHF is supported below 0.9300 levels and trading at 0.9293 levels and made intraday low at 0.9232 and high at 0.9320 levels. Today was data free session for Switzerland; market will eye on US data release due later in a day. Near term support is seen at 0.9242 levels and resistance is seen at 0.9372 levels.
AUD/USD is supported above 0.7700 levels and trading at 0.7733 levels. It has made intraday high at 0.7784 levels and low at 0.7634 levels. The Aussie has taken back entire losses that were triggered by dovish comments from RBA Governor Stevens. The pair had dropped to a low of 0.7634 after Stevens said he is open to "possibility of further policy easing." However, the pair managed to take back losses due to a sell-off in the USD/JPY pair after BOJ's Kuroda said yen may not weaken much further on real effective exchange rate basis. Initial support is seen at 0.7568 and resistance at 0.7811 levels. Option expiries are at .7625 (200M), 0.7745 (200M), 0.7850 (668M).
