Market Roundup
- Euro lifted by French PMI survey, but weaker German data caps gains.
- EUR/USD lifts to 1.1173 fm 1.1077 lows. 1.1062 was Wed's base.
- The dollar index off Wed 95.837 high, plays 95.036/95.650.
- GBP/USD regains 200 DMA at 1.5585 to hit 1.5667 tops.
- EUR/GBP breaks 0.7118 April low, 0.7129 to 0.7115 range.
- UK April Retail sales 1.2% m/m, 4.7% y/y vs previous -0.7%/4.0% revised. 0.4%/3.8% expected.
- UK CBI May manufacturing Order Book Balance at -5, low since Oct vs +1 in April.
- UK CBI May manufacturing Output Expectations Balance +15 vs +16 April.
- Euro zone March current account NSA 24.9bln vs previous 14.7bln revised. SA 18.6bln vs previous 27.3bln revised. 26bln expected.
- Euro zone March Net investment flow -42.1bln vs previous 9.4bln revised.
- Euro zone May manufacturing flash PMI 52.3 vs previous 52.0. 52.0 expected.
- Germany May Composite flash PMI 52.8 vs previous 54.1.
- France May manufacture flash PMI 49.3 vs previous 48.0. 48.5 expected.
- SNB Danthine - Suffering of Swiss economy due to strong CHF is temporary.
Economic Data Ahead
- (0830 ET/1230 GMT) US Jobless Claims (May 16 wk), consensus 271k, previous 264k.
- (0830 ET/1230 GMT) US Continued Claims (May 16 wk), consensus 2.231 mn, previous 2.229 mn.
- (0830 ET/1230 GMT) US Chicago Fed National Activity Index (Apr), previous -0.42.
- (1000 ET/1400 GMT) US Philly Fed Manufacturing Survey (May), consensus 8.0, previous 7.5.
- (1000 ET/1400 GMT) US Existing Home Sales (Apr), consensus 5.24 mn SAAR, previous 5.19 mn SAAR.
- (1000 ET/1400 GMT) US Leading Indicators (Apr), consensus +0.3% m/m, previous +0.2% m/m.
- (1100 ET/1500 GMT) US Kansas City Fed Manufacturing Production Index (May).
- (1100 ET/1500 GMT) US Kansas City Fed Composite Index (May).
Key Events Ahead
- (0800 ET/1200 GMT) Day 2 (of 2) of FRB New York conference on mortgage contract design; New York.
- (0045 ET/1545 GMT) Fed Trade operation 30-year Ginnie Mae (max $1.075 bn).
- (1330 ET/1730 GMT) Tsy Asst Sec for Econ Policy Dynan on implications for monetary policy/fin stability from mortgage contract design.
- (1400 ET/1800 GMT) Fed Vice Chair Fischer on "Past, Present and Future Challenges for the Euro Area".
- (1430 ET/1830 GMT) FedTrade operation 15-year Fannie Mae / Freddie Mac (max $575 mn).
- (1900 ET/2300 GMT) FRB SF's Williams (& former FRB Plosser) discussing the impact of reform in practice.
FX Recap
EUR/USD is supported above 1.1150 levels and currently trading at 1.1165 levels. It has made intraday high at 1.1181 and low at 1.1079 levels. Today Flash manufacturing PMI data from France and Europe came with Positive numbers while German data fell sharply. 1.1316 is an immediate resistance and a daily close below 1.1120 levels may drag the pair towards 1.1015 levels. Option expiries are at 1.1000 (701M), 1.1075 (547M), 1.1100 (448M), 1.1200 (295M).
USD/JPY is trading at 121.02, having posted a daily high at 121.21 levels and low at 120.84 levels. Yesterday the pair made a high of 121.47 levels. On the top side, the next resistance is located at 121.60. Immediate support might be located at 119.80 levels. Option expiries are at 121.00 (371M), 121.20 (350M).
GBP/USD recovered losses, trading higher at $1.5685. It made an intraday high at 1.5689 and low at 1.5524 levels. The pair extends its two-day rally largely on the back of a solid UK retail sales print which signalled economic recovery slightly back on track, fuelling BOE rate hike bets. Moreover, the US dollar remains heavily sold-off on the back of dovish Fed minutes released yesterday which pushed back June rate lift off in June. Immediate resistance is seen at 1.5751 and on the otherside; support is seen at 1.5600 levels. Option expiry is at 1.5400 (467M).
USD/CHF is trading around 0.9321 levels and made intraday low at 0.9304 and high at 0.9381 levels. Today was data free session for Switzerland. Near term support is seen at 0.9272 levels and resistance is seen at 0.9412 levels.
AUD/USD is supported around 0.7900 levels and trading at 0.7892 levels. It has made intraday high at 0.7912 levels and low at 0.7876 levels. AUD released Inflation expectation data with flat numbers as well as China Flash manufacturing data gave uplift to the parity as well. Initial support is seen at 0.7860 and resistance at 0.7976 levels.
