Market Roundup
- Euro climbs to $1.12485, strongest since Feb 26.
- Euro hits 8-week high of 132.995 yen as euro strengthens broadly.
- Dollar/yen extends losses, hits 1-month low below 118.525 yen.
- BOJ Gov Kuroda: BOJ will examine both upside, downside risks to economy and prices, and adjust policy as appropriate; won't hesitate to adjust policy if there's change to price trend; no change in our commitment to achieve 2 pct target at earliest possible time.
- RBNZ no change but dovish rhetoric keeps the rate cut door wide open.
- Japan Mar Housing Starts yy increase to +0.7 % (consensus -1.9 %) vs previous -3.1 %.
- Eurozone Mar Unemployment Rate stays flat at 11.3 % (consensus 11.2 %) vs previous 11.3 %.
- Eurozone Apr Inflation, Flash yy increase to 0.0 % (consensus 0.0 %) vs previous -0.1 %.
- Germany Apr Unemployment Rate sa stays flat at 6.4 % (consensus 6.4 %) vs previous 6.4 %.
- Germany Mar Retail Sales mm real decrease to -2.3 % (consensus 0.4 %) vs previous -0.5 %.
- Italy Apr Consumer Price Prelim mm increase to 0.3 % (consensus 0.2 %) vs previous 0.1 %.
- France Mar Producer Prices mm decrease to 0.1 % vs previous 0.7 %.
- France Mar Consumer Spending mm decrease to -0.6 % (consensus -0.3 %) vs previous 0.1 %.
- Switzerland Apr KOF indicator 89/5 vs previous 90/9 revised. 91.5 consensus
Economic Data Ahead
- (0830 EDT/1230 GMT) US Continuing Jobless Claims, previous 2.325
- (0830 EDT/1230 GMT) US Personal Income mm, consensus 0.3%, previous 0.4%
- (0830 EDT/1230 GMT) US PCE - Price Index yy, previous 0.3%
- (0830 EDT/1230 GMT) US Initial Jobless Claims, previous 295
- (0830 EDT/1230 GMT) US Personal Spending, consensus 0.5%, previous 0.1%
- (0830 EDT/1230 GMT) Canada GDP mm, consensus -0.1%, previous -0.1%
- (0945 EDT/1345 GGMT) US Chicago Purchasing Managers' Index, consensus 50, previous 46.3
- (1930 EDT/2330 GMT) Japan Jobs/applicants ratio, consensus 1.15, previous 1.15
- (1930 EDT/2330 GMT) Japan National CPI ex Food, Energy yy, previous 2%
- (1930 EDT/2330 GMT) Japan Unemployment Rate, consensus 3.5%, previous 3.5%
- (1930 EDT/2330 GMT) Japan National CPI yy, previous 2.2%
- (1930 EDT/2330 GMT) Japan Overall Household Spending, consensus -12.1%, previous -2.9%
- (1930 EDT/2330 GMT) Australia AiG Performance of Mfg Index, previous 46.3
Key Events Ahead
- (0830 EDT/1230 GMT) Fed's Tarullo Speech on "Tailoring Community Bank Regulation and Supervision", DC
- (1000 EDT/1400GMT) Commerce Dept issues annual benchmark revisions to retail sales; through Mar 2015
FX Recap
EUR/USD soared higher in the European session and hit a two-month high at 1.1248 levels on the back of rising German bund yields. It currently trades at 1.1188 levels. On the topside, resistance is located at 1.1249 (Today' High) levels, and a break above could push it to 1.13 levels. On the downside, support is likely to be found at 1.1160 (March 1 Low) levels and then at 1.1100 levels. Option expiries at 1.1000 (2.6BLN), 1.1050 (762M), 1.1075 (375M), 1.1100 (511M).
GBP/USD currently trades at 1.5441 levels, having touched session's high at 1.5491 levels. The pair saw fresh selling interest as traders exited their long USD positions post FOMC statement. The topside is likely to be capped by 1.5500 levels and any further strength could see the pair testing 1.5553 (Feb 26 High) levels. On the other hand, support located at 1.5402 (Today's Low) below and a break below could drag it to 1.5381 levels. Option expiries at 1.5400 (395M), 1.5450 (220M), 1.5500 (346M).
USD/JPY trades at 118.90 levels, recovering from the lows of 118.48 levels hit earlier in the day. It was temporarily boosted by BOJ Governor's positive statements for the country's economy. However, downward revisions to growth and inflation forecasts kept the yen under pressure. The pair has resistance at 119.20 (100-DMA) levels and then at 119.52 (20-DMA) levels. On the reverse side, support is seen at 118.50 (Today's Low) below which losses could be extended to 118.30 (March 26 Low) levels. Option expiries at 118.60 (1.3BLN), 119.00 (734M), 119.15 (486M), 119.50-55 (1BLN), 120.00 (3BLN).
USD/CHF is currently trading at 0.9401 levels, consolidating from the day's low of 0.9326 levels hit earlier in the day. On the downside, support is seen at 0.9269 levels and any further weakness could see the pair testing 0.9200 levels. On the upside, it may run into resistance at 0.9604 levels and then at 0.9490 levels. Option expiries at 0.9550 (242M).
AUD/USD weakened further in Europe and dropped to 0.7922 levels. It currently trades at 0.7929 levels. The Aussie is seen under pressure due to Australia's weak import prices data. On the Downside, support is seen at 0.7829, the low of April 28, while on the flipside, resistance is located at 0.8076, Wednesday's high and a three-month high. Option expiries at 0.7950 (604M), 0.8050 (397M).
NZD/USD declined till 0.759 after release of RBNZ monetary policy and currently trades at 0.7613 levels. Kiwi sinks after RBNZ opened the door to rate cuts. The RBNZ says NZD unjustifiably high and unsustainable and would be appropriate to lower cash rate if demand weakens. Technically the pair's minor resistance is around 0.7648 (200 day HMA) and any break above would extend gains till 0.7695 (cloud top)/0.7740 in short term. On the downside NZD/USD is facing minor support around 0.7580 and break below will drag the pair further down till 0.7550/0.7520. Option expiries at 0.7500 (526M), 0.7650 (751M), 0.7720-25 (500M).
