Market Roundup
- US Challenger Layoffs Apr 61.582k, (previous 36.594k)
- US Initial Jobless Claims w/e 265k, (consensus 280k, previous 262k)
- US Jobless Claims 4-Wk Avg w/e 279.50k, (previous 283.75k), lowest in 15-yrs
- Canada Building Permits mm Mar 11.6%, (consensus 2.5%, previous -0.3%)
- Mexico 12-month Inflation Apr 3.06%, (consensus 3.1%, previous 3.14%)
- Mexico 12-month Core Inflation Apr 2.31%, (previous 2.45%)
- Brazil IGP-DI Inflation Index Apr 0.92%, (consensus 0.9%, previous 1.21%)
- Fed’s Evans 2016 hike would be consistent with more confidence on inflation, rate hike possible after each meeting
- Denmark’s CB will respond to downward pressure on the DKK w/FX interventions rather than interest rate hikes
- Greece’s Varoufakis says Greece will pay the IMF EUR 750m on Tuesday, there must be some way to swap Greek legacy debt for new debt
- UK’s Conservatives/Liberals in dead heat (Populos opinion poll)
- France’s Sapin sees no deal with Greece on Mon but in days that follow
- Brazil’s CB mon pol should remain vigilant, sees inflation converging to 4.5% target by YE ’16
- BCB says faster global growth, CCY depreciation to favor Brazilian expansion
Economic Data Ahead
- China Exports YY Apr (consensus 2.4%, previous -15%)
- China Imports YY Apr (consensus -12%, previous -12.7%)
- China Trade Balance Apr (consensus 39.45b, previous 3.08b)
Key Events Ahead
- (1950 ET/ 2350 GMT) Japan BoJ to publish the minutes of April policy-setting meeting
- (2130 ET/ 0130 GMT) Australia RBA releases quarterly statement on monetary policy
FX Recap
EUR/USD is looking to consolidate around 1.1270 area towards the end of the NA session on Thursday. There was nothing tangible from Greek today and focus will be on critical US Non-farm Payrolls tomorrow as markets looking for clues regarding the timing of the next Fed’s rate hike. At the time of writing the pair is trading at 1.1270 down 0.67% on the day. Supports are at 1.1270, 1.1237 (low May 7), 1.1200 (psychological level) and then 1.1175 (low May 6). Resistances are at 1.1393 (high May 7) followed by 1.1450 (high Feb 17) and finally 1.1486 (high Feb 6). Option expiries Friday 8 May: 1.1100 (522M), 1.1200 (1.5BLN), 1.1295 (563M),1.1345-50 (680M)
GBP/USD: Pound gained momentum across the board amid UK elections. Cable rose, broke above 1.5235 to 1.5275 reaching a fresh daily high. Volatility could increase in GBP pairs during the Asian session with the results of UK elections coming up. At the time of writing the pair trades at 1.5260, up just 20 pips from yesterday closing but headed toward the third daily gain in a row. Immediate resistance is seen at 1.5290 (May 6 high), 1.5300 and 1.5340. While support levels could be located at 1.5205, 1.5160 (daily low) and 1.5110. Option expiries Friday 8 May: 1.4900 (359M), 1.5000 (190M), 1.5100 (285M)
USD/CHF is making a strong reversal ahead of the US employment report. The pair bottomed at 0.9070 during the European session after the release of exchange reserves data from the SNB but later pared losses and rebounded over 100 pips as the US dollar climbed across the board. USD/CHF is having the best day since April 22, trading at 0.9218 with a daily high above 0.9220.
USD/JPY: Better than expected US jobless claims data lifted USD. USD/JPY extended its recovery rising nearly 80 pips from a 1-week low of 119.05 scored earlier on the day. Focus on nonfarm payrolls report Friday, investors will be searching for signs of a bounce in hiring. Resistances are at 120.00 (psychological level) and 120.50 (May 5 high). Supports are seen at 119.32 (100-day SMA), 119.05 (daily low) and 118.49 (Apr 30 low). Option expiries Friday 8 May: 119.00 (1.25BLN), 120.00 (927M), 120.50 (1BLN), 121.25 (478M)
EUR/GBP has been drifting to the downside as Sterling remains better bid and weighs on the 0.74 handle. The euro is faltering on attempts to the upside and has been sold off from a touch below the 1.14 handle down to test the 1.1250 region. EUR/GBP is currently trading at 0.7391 with a high of 0.7483 and a low of 0.7391. A clearer picture of UK voting outcome not emerging until around 4:00-5:00 GMT. Support is seen around 0.7323 while resistance on the upside remains at circa 0.7489.
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