- NZD/USD plays 0.6565 late NY Wednesday to 0.6695 highs in London.
- RBNZ cuts OCR 25 bps to 3.0%, further easing likely.
- UK June retail sales -0.2% m/m vs +0.2% previous, +0.3% expected.
- Foreigners buy fewest US 30-year bonds at auction since '13.
- Japan economy seen slowing in Q2.
- JBIC Watanable- Don't expect rapid yen depreciation ahead.
- Japan June trade balance Y69.0 bln deficit, Y5.4 bln surplus eyed.
- Greek government spokesman- Divisions in Syriza party are obvious.
- Greek parliament vote approved the 2nd prior actions bill.
- Portugal to hold elections 4th October.
- Giant fund Bridgewater flips view on China: No safe places to invest.
- (0830 ET/1230 GMT) Canada May Retail Sales consensus 0.5% m/m, -0.1% previous.
- (0830 ET/1230 GMT) US Initial Jobless Claims July 18 week consensus 285k, previous 281k.
- (0830 ET/1230 GMT) US Continued Claims Jul 11 week consensus 2.250mln, previous 2.215mln.
- (0830 ET/1230 GMT) US Chicago Fed National Activity Index Jun previous -0.17.
- (1000 ET/1400 GMT) Index of Leading Econ Industry June consensus +0.2% m/m, previous +0.6%.
- (1000 ET/1400 GMT) Freddie Mac releases weekly U.S. mortgage rates.
- (1100 ET/1500 GMT) Kansas City Fed Manufacturing Production Index July.
- (1100 ET/1500 GMT) Kansas City Fed Composite Index (July).
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade ops 30yr F.Mae/Fr.Mac max $1.975bln.
FX Recap
EUR/USD is supported around 1.1000 levels and currently trading at 1.0993 levels. It has made intraday high at 1.1003 and low at 1.0919 levels. The euro jumped above $1.10 for the first time in a week on Thursday, this week's steadier tone and the doubts about the dollar's rally prompted some traders to abandon short-term bets for more gains. After a dive lower in morning trade in Europe, the dollar was half a percent lower against the euro, having briefly pushed above $1.10. Greece's parliament early today approved by a wide margin a second set of economic reforms demanded by its international creditors, opening the way to detailed negotiations on a third bailout for the country. Later in the New York session, traders will focus on weekly US jobs data. Moreover, the earnings season in the US will get a lot of the attention. Initial support is seen around at 1.0789 and resistance at 1.1083 levels. Option expiries are at 1.0845-50 (840M), 1.0900 (1.9BLN), 1.10 (1.9BLN).
USD/JPY is supported below 124.00 levels and posted a high of 124.04 levels. It has made intraday low at 123.66 and currently trading at 123.75 levels. Economic data out of Japan on Thursday showed the merchandise trade deficit shrinking to ¥69.0 billion in June from ¥217.2 billion in May, coming in worse than the surplus of ¥45.8 billion picked by analysts. Exports rose 9.5% year-on-year, while imports fell 2.9%. Near term resistance is seen at 124.57 and support is seen at 120.63 levels. Option expiries are at 123.00 (1.1BLN), 123.90-124.00 (360M), 125.00 (1.1BLN).
GBP/USD is supported around $1.5600 levels. It made an intraday high at 1.5669 and low at 1.5582 levels. Pair is currently trading at 1.5595 levels. Sterling fell to a day's low of $1.5584, down 0.15 percent on the day, after UK retail sales fell 0.2 pct unexpectedly in June having traded at $1.5656 beforehand. The euro rose 0.8 percent to a high of 70.57 pence, from around 70.17 pence before the data was released. 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 0.6684 levels and made intraday low at 0.6560 and high at 0.6694 levels. The New Zealand dollar was the biggest mover, jumping 1.5 percent after the RBNZ disappointed those who bet on a larger cut in interest rates and toned down its call for more falls for the kiwi. The central bank lowered interest rates for the second time since June on Thursday; policymakers did however drop the harsh language about the strength of the New Zealand dollar, and signalled that its depreciation was helping to support the economy and inflation. The Official Cash Rate (OCR) was lowered from 3.25% to 3.0% on Thursday, and the central bank explicitly stated that further rate cuts were likely. Initial support is seen at 0.6465 and resistance at 0.6722 levels. Option expiry is at 0.6600 (351M).
AUD/USD is supported around 0.7400 levels and trading at 0.7408 levels. It has made intraday high at 0.7416 levels and low at 0.7358 levels. Pair has been trodden on by the bears on a better overnight session for the greenback with commodities lagging and a recovery in the US dollar that has seen the Aussie down from though the 0.7440 heights of yesterday's business. RBA Governor Stevens spoke on monetary policy at the Anika Foundation. He said that although the economy is in the right path, the recovery is being slow and that further rate cuts are still on the table. In the European session AUD recovered above $0.7400 ahead of US data. For the rest of the week, we look out for HSBC Manufacturing PMI (Jul) from China and New Home Sales data for June as well as Markit Manufacturing for July from the US. Initial support is seen at 0.7325 and resistance at 0.7647 levels. Option expiries are at 0.7470 (259M),0.7350 (458M), 0.7200 (1.6BLN).
