- Japan corporate survey - 40% of firms to up CAPEX in FY '15/16, half plan to keep spending steady, 35% cite higher demand, 39% need to refurbish capacity, 27% see domestic sales undershooting plans, 13% above, 59% say on track, 23% see overseas sales undershooting, 9% exceeding, 68% on track.
- Japan's tarnished Toshiba to sell 5% interest in Finnish elevator maker Kone, stake valued at Y120 bln+, taking scalpel beyond management.
- China injects massive funds into policy lenders.
- Australia CPI at +0.7% q/q, +1.5% y/y, trimmed mean +0.6%, +2.2%, weighted median +0.5%, +2.4%, +0.8/+1.7%, +0.6/+2.2% and +0.5/+2.3% eyed.
- RBA Gov Stevens - Rate cuts on table but risks associated with low rates, leverage, a somewhat lower AUD necessary for economy, economic changes coming slowly, growth disappointing but not disastrous, China easing good.
- Australia June Westpac/MI leading index 97.96, May 97.94., +0.06% from trend.
- (0245 ET/0645 GMT) France July business climate index, 100 eyed; last 100.
- (0400 ET/0800 GMT) Italy May industrial orders/sales; last +5.4% m/m, +7.9% y/y & -0.6%, -0.2%.
- (0500 ET/0900 GMT) Italy May retail sales, unch m/m sa eyed; last +0.7% m/m sa, unch y/y nsa.
- (0900 ET/1300 GMT) US May FHFA monthly home price index; last +0.3% m/m, +5.3% y/y.
- (1000 ET/1400 GMT) US June existing home sales, 5.4 mln unit AR eyed; last 5.35 mln AR.
Key Events Ahead
- N/A Portugal E1-1.25 bln each 4.8% and 4.1% 2020 and 2037 OT auctions.
- (0430 ET/0830 GMT) BOE MPC July meeting minutes, 9-0 vote for no changes eyed.
- (0500 ET/0900 GMT) Euro zone quarterly data on government debt.
- (0615 ET/1015 GMT) EU Juncker, EIB Hoyer speech.
- (1430 ET/1830 GMT) US TsySec Lew press conference on social security, Medicare.
- (1700 ET/2100 GMT) RBNZ policy announcement, 25-50 bp cut in 3.25% OCR eyed.
- (1700 ET/2100 GMT) Expected Greek parliament vote on second round of reforms.
FX Recap
EUR/USD is supported above 1.0900 levels and currently trading at 1.0934 levels. It has made intraday high at 1.0959 and low at 1.0923 levels. After failing to extend its rally, the American dollar got smashed in the New York session, giving back much of the ground gained last week. The day started in slow motion, with no relevant data released in Europe or the US, and in fact, the EUR/USD extended its decline down to 1.0808, a fresh 3-month low. But the lack of follow through finally played against dollar's bulls, forced to take profits out and wait for better levels before getting back in. Today is data thin calendar for the Euro zone. Market will eye on US macro economic data for the further movement. Initial support is seen around at 1.0789 and resistance at 1.1083 levels.
USD/JPY is supported below 124.00 levels and posted a high of 123.88 levels. It has made intraday low at 123.60 and currently trading at 123.67 levels. Japan's benchmark Nikkei 225 index tumbled 1.01% to 20,632.03 points within the first hour of trade, while Tokyo's broader Topix gauge fell 0.86% to 1,659.42 points. Export-exposed stocks fell sharply as the Japanese yen strengthened against a weakening US dollar overnight. The greenback was buying some ¥123.77 on Wednesday compared with ¥124.30 during the previous equity session. Near term resistance is seen at 124.57 and support is seen at 120.63 levels.
GBP/USD is supported below $1.5600 levels. It made an intraday high at 1.5577 and low at 1.5546 levels. Pair is currently trading at 1.5571 levels. The UK currency eased from its intraday high and slid well below the 1.56 threshold on start of the week. Today UK will release monetary policy meeting minutes for the further direction of the parity. Initial support is seen at 1.5413 and resistance is seen around 1.5734 levels.
NZDUSD is supported above 0.6600 levels and trading at 0.6616 levels and made intraday low at 0.6601 and high at 0.6643 levels. The New Zealand dollar was pushed higher after the PM expressed caution about the scale of the currency's recent fall. Traders said the kiwi had recovered some ground after PM John Key said the currency's 25 pct fall over the last year had been faster than expected. While the RBNZ is widely expected to follow up last month's rate cut with another on Thursday. The New Zealand dollar had a solid start to the week, rising for the third day in a row on Wednesday, with the much-awaited Reserve Bank of New Zealand cash-rate decision pending. Initial support is seen at 0.6465 and resistance at 0.6645 levels.
AUD/USD is supported above 0.7400 levels and trading at 0.7412 levels. It has made intraday high at 0.7438 levels and low at 0.7371 levels. The Aussie went through a rollercoaster session in Asia, falling from session highs straight to lows. The primary cause of the downside move was the speech from the RBA's Stevens who was positive about the effects of a weaker AUD. Earlier in the session, the Aussie was bolstered and spiked to 0.7439 high following upbeat Australia's CPI data which showed that last quarter the CPI rose 0.7% after fuel prices were lifted back almost to levels seen before the drop in global oil prices last year. Initial support is seen at 0.7325 and resistance at 0.7647 levels.
