Market Roundup
- United States Apr building permits revised number mm decrease to 1.14 mln vs prev 1.143 mln
- United States Apr Building permits revised change mm decrease to 9.8 % vs prev 10.1 %
- United States May Dallas Fed services revenues decrease to 3.8 vs prev 14.6
- United States May Texas service sector outlook increase to 1.1 vs prev -1.0
- EUR rebounds after Greek official says Brussels group has started procedure to draw up staff-level agreement, but steadies after EZ officials dismiss Greek comments on deal being drafted (Reuters)
- Bank of Canada leaves rate steady at 0.75%, shrugs off weak US Q1, net effect of recent strong CAD/higher oil if sustained will need to be assessed as more data becomes available
- US Treasury’s Lew back half of 2015 should be much stronger than first half
- Chilean CB poll sees rates steady over next 12-mos, was expected to hike w/US
- Fitch Brazil: country has much worse econ indicators than countries with similar ratings
- Brazil’s government cuts 2016 growth forecast to 1.0 pct
- Portugal Foreign Minister says can’t lose any more time, in everybody’s interest that Greece stays in euro
- Germany’S Steinmeier says says goal of intense talks is to keep Greece in euro, every day is decisive
Economic Data Ahead
- (1845 ET/ 2245 GMT) NewZealand Building Consents Apr (previous 11%)
- (1950 ET/ 2350 GMT) Japan Foreign Bond Investment w/e (previous 1099.2b)
- (1950 ET/ 2350 GMT) Japan Foreign Invest JP Stock w/e (previous 187.3b)
- (1950 ET/ 2350 GMT) Japan Retail Sales YY Apr (consensus 5.4%, previous -9.7%)
- (2130 ET/ 0130 GMT) Australia Capital Expenditure Q1 (consensus -2.4%, previous -2.2%)
- (2130 ET/ 0130 GMT) Australia Building Capex Q1 (consensus -2.5%, previous -2.6%)
- (2130 ET/ 0130 GMT) Australia Plant/Machinery Capex Q1 (consensus -1.2%, previous -1.3%)
Key Events Ahead
- ( 0220 ET/ 0620 GMT) US Federal Reserve Bank of San Francisco President John Williams speaks before the Monetary Authority of Singapore Banking Supervision and Regulation joint conference
FX Recap
EUR/USD: Rumours regarding a deal (or the lack of) between the Brussels Group and the Greek negotiators has EUR/USD flirting with 1.0900. Price action will continue to hinge on Greece during the second half of the week. Currently the pair is trading at 1.0886 up 0.12% on the day. Next resistance is at 1.0930 (high May 27) ahead of 1.0984 (high May 26) followed by 1.1062 (low May 20). On the downside, supports are seen at 1.0819 (low May 27), 1.0800 (psychological level) then 1.0785 (low Apr 24). In the EU, EMU’s Economic Sentiment and Consumer Confidence followed by the EU Financial Stability Report will be in focus tomorrow. While Initial Claims and Pending Home Sales will be in the limelight across the Atlantic. Option expiries for Thursday 28 May: 1.1150 (1.8BLN)
GBP/USD: Greenback is about to post the fourth daily gain in a row against the pound. After hitting a fresh 3-week low at 1.5300 during the American session, cable is attempting to move off session lows. At the time of writing GBP/USD is trading at 1.5340, still down more than 50 pips for the day. In Thursday’s docket, second estimate on UK Q1 GDP growth will be in focus. Traders are also with eyes over the negotiations between Greece and its creditors. An agreement that boost risk appetite could favor the upside in the GBP/USD. Option expiries for Thursday 28 May: 1.5100 (1.1BLN)
USD/JPY is currently trading at 123.85 with a high of 124.07 and low of 122.77. The dollar is extending gains into a fourth consecutive day versus the yen, following a steep rally the previous day. BOJ chief Kuroda said on Wednesday that is desirable that FX reflect economic fundamentals but refrained from making comments against weak JPY. Resistance is seen at 124.13 (Jun 22 2007 high). On the downside, supports could be found at 122.76 (daily low), 122.45 (intraday support May 26) and 122.00 (psychological level). Option expiries for Thursday 28 May: 123.00 (960M), 124.20 (300M), 124.50 (400M), 124.80 (400M)
EUR/JPY: Weak yen and speculations about a deal between Greece and its creditors pushed EUR/JPY higher during the American session. The pair hit 135.00, highest since last Friday and then pulled back modestly, finding support above 134.70. At the time of writing the pair is trading at 134.84, rises for the second day in a row. Due ahead during Thursday’s Asian session is Japan retail sales report, while in Europe negotiations between the Brussels Group and Greek officials, Economic Sentiment and Consumer Confidence Survey will be watched.
USD/CHF: Franc recovering some ground after three days of losses against the dollar. USD/CHF reached a 1-month peak of 0.9542 at the beginning of the New York session, but eventually pared gains and eased somewhat. At time of writing, the pair is trading at 0.9500, 0.28% below its opening price. Immediate resistances is seen at 0.9542 (daily high), 0.9571 (Apr 29 high) and 0.9596/0.9600 (Apr 28 high/psychological level). On the downside, supports are seen at 0.9476 (100-day SMA), 0.9443 (May 26 low) and 0.9304 (May 25 low).
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