Market Roundup
- US Core Durables beat forecast in Apr, +1%; hints at biz confidence rebound
- U.S. seen growing 0.8 pct in second quarter, up from 0.7% (Atlanta Fed’s GDPNow)
- Greece’s Varoufakis says Greece will make June 5 IMF pmt, says there will be a deal by then
- Greek ‘red lines’ in talks with creditors on funding for reforms too rigid (EZ official)
- Bank of Portugal: exposure of banks to sov debt/real estate poses risks to financial stability
- Fitch Brazil’s fiscal effort threatened by recession, revenue weakness and rising interest costs
- Tombini vigilant on inflation, economic adjustments to help in recovery of confidence
- David Rosenberg of Gluskin Sheff: strong possibility Fed does not raise rates this yr (Rtrs)
- Swedish Cbanker Jansson says can’t have the kind of stengthening of crown vs euro we saw between Feb and March
- Swedish Cbanker Jansson says on high alert to do more if necessary
- Fed’S Fischer: We should expect spillovers when policy is tightened
- Fischer: Fed must take global feedback effects into account when making policy choices
Economic Data Ahead
- No Significant Data
Key Events Ahead
- (1950 ET/ 2350 GMT) Japan Bank of Japan to publish the minutes of its April policy meeting
- (2130 ET/ 0130 GMT) Japan Bank of Japan Deputy Governor Kikuo Iwata meets business leaders in Sapporo
FX Recap
GBP/USD: After falling to fresh 3-week lows near 1.5360, GBP/USD staged some sort of comeback. But the recovery was capped around the 1.5400 handle, amidst a growing sentiment towards the greenback. Currently the pair is trading at 1.5401, down 0.44% on the day. Supports are seen at 1.5354 (low May 26) then 1.5300 (psychological level) and finally 1.5260 (76.4% of 1.5088-1.5815). Resistance aligns at 1.5508 (high May 25) followed by 1.5567 (200-d MA) and then 1.5700 (high May 21). Option expiries for Wednesday 27 May: 1.5320 (251M). Thursday should be interesting for GBP traders, as housing prices gauged by Nationwide, Gfk’s Consumer Confidence and the preliminary print for the UK GDP during the first quarter are all due.
USD/CAD staged a nice rally on the back of supportive US economic data. The pair broke above the 100-day SMA and reached its highest level in more than a month at 1.2447. USD/CAD consolidates gains above 1.2400 and is at time of writing trading at 1.2425, recording a gain of 0.94% on Tuesday. Immediate resistances are at 1.2447 (daily high), 1.2500 (psychological level) and 1.2569 (Apr 15 high). On the flip side, supports are seen at 1.2365 (100-day SMA), 1.2304 (daily low) and 1.2275 (May 25 low).
EUR/USD down nearly 120 pips throughout the day as the dollar extended gains propelled by supportive US durable goods orders data. EUR/USD posted its lowest level in a month at 1.0863. At time of writing, the pair is trading at 1.0865, recording a 1.0% loss on the day, consolidating at 1-month lows. EUR/USD could find immediate supports at 1.0859 (Apr 28 low), 1.0819 (Apr 27 low) and 1.0800 (psychological level). On the other hand, resistances are seen at 1.0939 (intraday level), 1.0980 (daily high) and 1.1000 (psychological level). Option expiries for Wednesday 27 May: 1.0800 (769M), 1.0900 (543M), 1.0940-55 (1.5BLN), 1.1000 (1BLN)
USD/CHF: Greenback continues the rally that started two week ago from 0.9080, is about to post the third daily gain in a row. USD/CHF resumed the upside on broad USD strength. The pair rose back above 0.9500 and hit a fresh daily hith at 0.9527, the strongest level since the beginning of the month. Resistance levels are seen at 0.9570 and 0.9595 (April 28 high). On the opposite direction support now could be located at 0.9460, 0.9405 (weekly low) and 0.9365.
USD/JPY: Demand has taken the major above the fourth month ranges top and reached highs on the 123 handle. USD/JPY is currently trading at 123.04 with a high of 123.33 and low of 121.52. The bullish triangle was confirmed with the break out up to test the 123.20/30 resistance zone. Next hurdles are at 124.14 and then 125. On the flipside the 121/122.00 range hold in as support. Option expiries for Wednesday 27 May: 121.80 (300M), 123.00 (210M), 124.00 (350M)
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