- BOJ Gov Kuroda in PM Diet testimony - Real effective exchange rate shows JPY weak, JPY may not weaken much further on this basis.
- BOJ Gov Kuroda - No comment on FX levels, daily moves, desirable for FX to reflect fundamentals, move in stable manner, market still pricing in Fed rate hikes? FX not being targeted, 2% CPI target to be achieved in H1 FY'16, QQE to continue till target-stable prices achieved, only half-way there.
- BOJ Policy Board Sato - Fiscal discipline important, eyeing QQE effect on JGB market, liquidity dwindling? QQE returns diminishing? No need for further policy actions now, economic momentum up, inflation to rise.
- Japan Vice Fin Min Miyashita - Sales tax to be upped to 10% in April '17.
- Japan April core machinery orders +3.8% m/m, +3.0% y/y, -2.0% and -1.3% eyed, Cabinet Office ups assessment of sector, sector-CAPEX recovering.
- Japan May domestic corporate goods prices +0.3% m/m, -2.1% y/y, +0.2%, -2.2% eyed.
- Iceland CB will be more active in FX market after controls lifted.
- IMF Furusawa - Global growth still modest, '15 better than '14, Asia to remain best growing region, fiscal policy important.
- RBA Gov Stevens - Open to more easing with caveats, AUD needs to fall more.
- Australia June Westpac/MI consumer confidence index -6.9% to 95.3, sub-100.
- NZ May electronic card retail sales +1.2% m/m, +3.2% y/y, April -0.7%, +3.9%.
- (0245 ET/0645 GMT) France April industrial output, +0.4% m/m eyed; last -0.3%.
- (0330 ET/0730 GMT) Sweden April industrial output, +0.2% m/m, -2.0% y/y eyed; last +0.8%, +0.3%.
- (0330 ET/0730 GMT) Sweden April new manufacturing orders; last +1.4% y/y.
- (0400 ET/0800 GMT) Norway May CPI, +0.2% m/m, +2.1% y/y eyed; last +0.4%, +2.0%.
- (0400 ET/0800 GMT) Norway May core, +0.3% m/m, +2.2% y/y eyed; last +0.4%, +2.1%.
- (0400 ET/0800 GMT) Norway May PPI; last -5.6% y/y.
- (0400 ET/0800 GMT) Italy April industrial output, +0.2% m/m, +0.8% y/y eyed; last +0.4%, +1.5%.
- (0430 ET/0830 GMT) UK April industrial output, +0.1% m/m, +0.6% y/y eyed; last +0.5%, +0.7%.
- (0430 ET/0830 GMT) UK April manufacturing output, +0.1% m/m, +0.4% y/y eyed; last +0.4%, +1.1%.
Key Events Ahead
- N/A Estonia CB Hansson speaks on latest macro-economic forecasts.
- N/A Norway NOK2 bln 1.75% 2025 bond, Sweden t-bill, Italy 12-BOT auctions.
- N/A Greece bln 3/6-month treasury bill auctions.
- (0400 ET/0800 GMT) ECB/Finland CB Liikanen press conference on updated economic forecasts.
- (0400 ET/0800 GMT) ECB/Austria CB Nowotny speech at Frankfurt CESEE conference.
- (0400 ET/0800 GMT) Iceland central bank monetary policy announcement.
- (0630 ET/1030 GMT) Germany E5 bln zero% 2017 Schatz auction.
- N/A IEF Americas Conference of Montreal (till June 11), various speakers.
- N/A OECD tax conference in Washington, DC (till June 11).
- (0830 ET/1230 GMT) Buba Nagel speech in Nuremburg.
- (1545 ET/1945 GMT) BoE Gov Carney, ChancExch Osborne London Mansion House speeches.
- (1700 ET/2100 GMT) RBNZ policy announcement, no change eyed in 3.5% OCR but cut chance.
FX Recap
EUR/USD is supported below 1.1300 levels and currently trading at 1.1285 levels. It has made intraday high at 1.1306 and low at 1.1270 levels. Today Italy and France will release industrial production data, which will provide further direction to the parity. Initial support is seen at 1.1257 and resistance is seen around 1.1380 levels.
USD/JPY is supported below 124.00 levels and posted a high of 124.61 levels. It has made intraday low at 122.97 and currently trading at 123.30 levels. Pair is down over 100 pips on headlines, tumbling from 124.61 sessions high to a session low of 122.97 on the unexpected headlines from BOJ. Pair is selling-off aggressively following comments from BOJ Kuroda saying that Yen's excessive rises have been corrected in past 3 years, also adding that real effective exchange rate shows that yen is weak, while also saying that yen may not weaken much further on real effective exchange rate basis. Near term resistance is seen at 124.74 and support is seen at 123.04 levels.
GBP/USD is supported above $1.5400 levels. It made an intraday high at 1.5417 and low at 1.5367 levels. Pair is currently trading at 1.5413 levels. There is nothing much to report in the session ahead, with the main focus likely to be the industrial production and manufacturing production data from the UK. UK industrial production results in April are seen as gaining 0.1% on a monthly basis after the 0.5% gain reported in March, and adding 0.6% on an annual basis compared to the 0.7% growth reported in March. While Greece headline may continue flowing in all through the day. Initial support is seen at 1.5368 and resistance is seen around 1.5440 levels.
USD/CHF is supported below 0.9300 levels and trading at 0.9293 levels and made intraday low at 0.9289 and high at 0.9320 levels. Today is 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 just below 0.7700 levels and trading at 0.7693 levels. It has made intraday high at 0.7702 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 0.7739 levels.
