Market Roundup
- German Econ Min says risks remain such as Greek debt crisis, unresolved Russia/Ukraine conflict and Mid East tensions.
- German Econ Ministry says economic upturn should continue at a moderate rate.
- BOJ Gov Kuroda: Japan's economy continues to recover moderately, positive mechanism in place; BOJ's QQE exerting intended effects.
- European Union Feb Eurostat Trade NSA, increases to 20.3 bln eur (consensus 21.1 bln eur) vs previous 7.9 bln eur.
- France Mar CPI (EU Norm) Final MM stays flat at 0.7 % (consensus 0.7 %) vs previous 0.7 %.
- Germany Mar HICP final MM stays flat at 0.5 % (consensus 0.5 %) vs previous 0.5 %.
- Germany Mar CPI final MM stays flat at 0.5 % (consensus 0.5 %) vs previous 0.5 %.
- Japan Feb Industrial Output Rev increases to -3.1 % vs previous -3.4 %.
Economic Data Ahead
- (0830 EDT/1230 GMT)US Apr NY Fed Empire State mfg index, 7.0 consensus; previous 6.9.
- (0915 EDT/1315GMT) US Mar industrial output, -0.3% m/m consensus; previous +0.1%.
- (0915 EDT/1315GMT) US Mar capacity utilization, 78.7% consensus; previous 78.9%.
- (1000 EDT/1400GMT) US Apr NAHB housing market index, 55.0 consensus; previous 53.0.
Key Events Ahead
- (0745 EDT/1145 GMT) ECB policy announcement, no change in 0.05% refi, -0.2% depo rates expected
- (0830 EDT/1230 GMT) ECB Pres Draghi press conference.
- (0900 EDT/1300 GMT) Fed's Bullard Speech
- (1000 EDT/1400GMT) BoC policy announcement, no change in 0.75% overnight rate expected.
- (1015 EDT/1415 GMT) FDIC Vice Chair Hoenig on the state of U.S. and world economies; Washington, DC
- (1040 EDT/1440GMT) FOMC ViceChair Fischer moderates panel discussion at IMF/WB annual event.
- (1215 EDT/1615GMT) BoC Gov Poloz press conference on latest monetary policy report.
- (1530 EDT/1930GMT) FedTrade Operation 30-year Fannie Mae / Freddie Mac securities (max $1.850 bln)
- (2030 EDT/0030GMT) FRB Richmond's Lacker on "Investing in People for Long-Term Prosperity"; Charleston, SC
FX Recap
EUR/USD broke below the 1.06 mark ahead of the ECB press conference. It posted a low of 1.0569 levels before consolidating to 1.0593 levels. It is likely to find next support at 1.0521 (low ) levels and a break below would make the way for 1.0457 (2015 low ) and then 1.0360 (low Jan.8 2003). On the upside, a breach of 1.0708 (high ) would see the par testing 1.0713 (low ) and further 1.0763 (10-d MA). Option expiries at 1.0300 (1.6B), 1.0400 (630M), 1.0500 (631M), 1.0600 (426M).
GBP/USD fell to 1.4699 levels in the European session, breaking below the 1.47 handle, and subsequently consolidated to 1.4720 levels. It is expected to be driven by overall market sentiment in the absence of major economic releases from the UK. On the downside, immediate support is located at 1.4720.47, and then at 1.4660 levels. On the other hand, resistance is expected to be found at 1.4768 levels and a break above could push the pair higher to 1.48 levels. Option expiries at 1.4400 (479M), 1.4565 (227M), 1.4700 (795M), 1.5000 (241M). EUR/GBP hovered around 0.72 levels, with support at 0.7186 and resistance at 0.7220 levels.
USD/CAD bounced to fresh session highs at 1.2532 levels in Europe before easing to 1.2519 levels. Markets now focus on the Bank of Canada policy announcement scheduled later in the day. On the topside, immediate resistance is seen at 1.2550 levels and above which gains could be extended to 1.2600 levels. To the flipside, support is eyed at 1.2500 levels, below which it would target 1.2440 levels. Option expiries at 1.2400 (418M), 1.2490 (270M), 1.2700 (535M).
USD/JPY remained pressured under the 120 mark on Wednesday. It currently trades at 119.38 levels, with a high of 119.73 and low of 119.32 levels. On the downside, a convincing break below 119.10 levels would see the pair resuming fresh bearish trend. On the upside, a break above 120.20 levels could weaken the bearish bias and push the pair to 120.88 levels. Option expiries at 120.15 (1.1B), 121.00 (780M).
USD/CHF broke above the 0.9740 levels briefly in early European session and hit a high of 0.9770 levels. It currently trades at 0.9743 levels. The pair has resistance at 0.9800 levels and a break above would make the way for 0.9850 levels. On the flipside, immediate support is seen at 0.9700 levels below which losses could be extended to 0.9668 levels.
