Market Roundup
- US Initial Jobless Claims w/e 276k, (consensus 279k, previous 284k), slight beat into NFP Friday
- US Labor Costs Revised Q1 6.7%, (consensus 5.9%, previous 5.00%), surprises higher, may hit corp profits
- Mexico Jun interest rate stays flat at 3.00 % (consensus 3.00 % vs previous 3.00 %)
- Canada May IVEY PMI SA increase to 62.3 (consensus 55.5 vs previous 58.2)
- Russia W/E cbank wkly reserves decrease to 356.5 bln $ vs previous 360.5 bln $
- Bund yields reverse intraweek doubling of yield by 1%; pull EUR off highs
- Greece asks IMF to bundle all June pmts; be paid on June 30 (Kathimerini); Bundling is not a good sign - EU official
- IMF says US should delay any rate hike to H1 2016
- IMF says Fed rate hike should be deferred "until there are greater signs of wage or price inflation"
- EU commission to host new talks late Friday, but EU official says Tsipras won't come
- Eurogroup's Dijsselbloem differences with Greece quite large, gap narrowed Wednesday
- Greece'S creditors concerned Greece may need a third extension of current bailout beyond end-June to be get funds still available
Economic Data Ahead
- (1930 ET/ 2330 GMT) Australia AIG Construction Index May (previous 47)
- (1930 ET/ 2330 GMT) Japan Foreign Reserves May (previous 1250.10b)
- (0100 ET/ 0500 GMT) Japan Coincident Indicator MM Apr (previous -1.2)
- (0100 ET/ 0500 GMT) Japan Leading Indicator Apr (previous 0.8)
Key Events Ahead
- No Significant Events
FX Recap
Wild volatility dominated the forex board on Thursday. Greek finance ministry officially rejected the creditor's bailout proposal. Greece is likely to miss its €300 million IMF payment tomorrow and will ask to bundle June payments up to repay €1.5 billion at the end of the month. In parallel, the IMF released a report on the US economy, downgrading its 2015 GDP forecast to 2.5% from 3.1%, and saying a rate hike should be deferred.
EUR/USD: Greece is likely to miss its €300 million IMF payment tomorrow and will ask to bundle June payments up to repay €1.5 billion at the end of the month. Euro shrugged off the news, as this won't be considered a default. The pair managed to climb back above the 1.1300 mark following a sideways phase. Dollar also faced renewed weakness across the board, eyeing tomorrow's US nonfarm payrolls report aiding the pair's rise. Currently the pair is trading at 1.1300, up 0.25% on the day. Option expiries for Friday 05 June: 1.1000 (3BLN), 1.1100 (678M), 1.1200 (738M)
GBP/JPY: As widely expect the Bank of England left monetary policy unchanged, making no effect on the currency market. The pound rose further against the yen and is headed toward the eight weekly gain in a row. GBP/JPY hits fresh 6-year highs at 191.67 as GBP/USD moved off session lows. The pair currently trades at 191.40, with resistance levels located at 191.65/70 (daily high) and 192.00 (psychological level). On the flipside support might lie at 190.80 (daily low), 190.55 and then 190.35.
USD/JPY firmer despite soft USD. The Japanese yen continues to depreciate vs. the US dollar on Thursday, lifting USD/JPY to daily tops around 124.65/70 range. The pair bottomed out around 123.80 during the European session, but gathered steam following BoJ's Harada's comments that the 'excessive yen strength has been corrected'. The pair is now up 0.20% at 124.50 with next hurdle at 124.68 (high Jun 3) ahead of 125.07 (2015 high Jun 2) and then 126.00 (psychological level). On the downside, supports lie at 123.79 (low Jun 3), 123.75 (low Jun 2) and finally 123.61 (23.6% of 118.89-125.07). Option expiries for Friday 05 June: 122.85 (1.2BLN), 123.00 (720M), 123.50 (452M), 123.75 (250M), 125.00 (762M)
NZD/USD: The kiwi has erased most of weekly gains and is falling against the US dollar for the second day in a row. Greenback is rising on Thursday particularly against commodity currencies. NZD/USD bottomed at 0.7100 and currently trades at 0.7110/15, 35 pips down on the day. The pair continues to retreat and the price is back near the level it ended on Friday. Option expiries for Friday 05 June: 0.7120 (230M), 0.7165 (227M)
