Market Roundup
- China April trade surplus $34.13 bln, exports -6.4% y/y, imports -16.2%, 39.45 bln, +2.4% and -12.0% eyed.
- UK's Cameron on track to return to power as PM, Tories 316/650 seats, Labour 239, SNP 58, LibDems 10, UKIP 2 as per exit polls.
- RBA qtrly MPS - Will assess outlook, adjust policy as needed for growth,Inflation, AUD not offering enough support to economy, further fall likely,Growth forecasts trimmed, below trend for little while longer.
- BoJ April 7-8 Policy Board minutes - Firms cautious on overseas demand, stable, FX would boost medium/long-term business plans, CAPEX, consumption resilient, though sluggish, lags strong employment-income, CPI still tied to energy, expectations rising on whole.
- Japan's new fiscal plan won't include new tax hikes.
- Japan R&D set for big increase: Hitachi plans more money for AI, robots, sensors.
- Foreign CB US debt holdings +$21.686 bln to $3.315 trln May 6 week, Treasury holdings +$19.725 bln to $2.986 trln, agencies +$551 mln to $284.686 bln.
- US-based stock funds post $14.8 bln outflows in May 6 week.
Economic Data Ahead
- (0145 EDT/0545 GMT) Switzerland Apr unemployment, 3.3% nsa and sa eyed; last 3.4%, 3.2%.
- (0200 EDT/0600 GMT) Germany Mar industrial output, +0.4% m/m eyed; last +0.2%.
- (0200 EDT/0600 GMT) Germany Mar trade balance, E19.7 bln surplus sa eyed; last E19.7 bln surplus.
- (0300EDT/0700 GMT) Spain Mar industrial output, +1.2% y/y eyed; last +0.6%.
- (0315 EDT/0715 GMT) Switzerland Apr CPI, +0.1% m/m, -0.9% y/y eyed; last +0.3%, -0.9%.
- (0400 EDT/0800 GMT) Italy Mar industrial output, +0.2% m/m, -0.2% y/y eyed; last +0.6%, -0.2%.
- (0400 EDT/0800 GMT) NO Mar manufacturing output, +0.3% m/m eyed; last +1.2%.
- (0430 EDT/0830 GMT) UK Mar trade balance, GBP9.8 bln deficit eyed; last bln deficit.
- (0430 EDT/0830 GMT) UK Mar - non-EU, bln deficit eyed; last GBP 3.24 bln deficit.
- (0830 EDT/1230) US Apr non-farm payrolls, +224k eyed; last +126k.
- (0830 EDT/1230) US Apr unemployment, 5.4% eyed; last 5.5%, participation 62.7%.
- (1000 EDT/1400 GMT) US Mar wholesale inventories, +0.3% m/m eyed; last +0.3%.
- (1000 EDT/1400 GMT) US Mar wholesale sales, +0.5% m/m eyed; last -0.2%.
Key Events Ahead
- N/A BoE MPC begins two-day meeting, Riksbank executive board meeting.
- N/A UK DMO GBP1/1.5/2 bln 1/3/6-month treasury bill auctions.
- (0100 EDT/0500 GMT) Buba Nagel at Frankfurt policy discussion/Buba Buch speech Saturday.
- (0130 EDT/ 0530 GMT) ECB/Finland CB Liikanen at Helsinki event.
- (0230 EDT/0630 GMT) Norges Bank Gov Olsen lecture in Stavanger, Norway.
- (0730 EDT/1130 GMT) ECB VP Constancio lecture at London forum.
- (0945 EDT/1345 GMT) NY Fed Dudley speech in New York.
FX Recap
EUR/USD is trading at 1.1215 levels and made high of 1.1256 so far. Pair broke major support levels of 1.290 and made low of 1.1197. In European session German and Italy Industrial production data will be main focus today. Neutral momentum studies, 20 day Bollinger's, 5, 10 & 20 dma's head north. Initial support/resistance is seen at 1.1158 and 1.1280 levels.
USD/JPY turns up side and currently trading at 119.84 levels and made low of 119.70. The Japanese yen weakened marginally after April central bank board meeting minutes offered no surprises on views. The Bank of Japan board sees the output gap improving, but also concern about the ability to hit a target of 2% sustained inflation in the coming year. Initial support is seen at 119.05 and 118.49. Resistance is seen at 120.69 levels.
GBP/USD is currently trading at 1.5506 levels and made a high of 1.5522. Exit polls appear to be playing out as early results come in. A major surprise - pre-election polls proved misguided. UK is going to release Halifax HPI as well as trade balance data. Initial resistance are seen at 1.5554 2015 high and 1.5570 - 38.2% Fibonacci retracement.
USD/CHF touched the low at 0.9070 levels yesterday and currently trading Upside at 0.9227 levels. Today is major day for Switzerland as it will release Unemployment rate and CPI numbers. Near term support is seen at 0.9055 levels and resistance is seen at 0.9221 levels. A daily close above 0.9221 level lead the pair towards 0.9262, 0.9281 levels.
AUD/USD is trading at 0.7912 and made intraday low at 0.7862 levels. The Australian dollar fell as the central bank cut its outlook for inflation and growth, suggesting there may be further room to ease the cash rate from a record low 2% and trade data from China was downbeat. China's April trade data showed exports fell 6.2% in April year-on-year and imports slumped 16.1% with a trade surplus of $34.13 billion. Initial support is seen at 0.7862, today's low and resistance at 0.7976, 0.8010 levels.
