Market Roundup
- USD/JPY is trading up just under 1% from Thursday’s 118.89 low.
- Euro off 3 month highs as rise in Bund yields stalls.
- EUR/USD plays 1.1345/1.1421.
- DXY off 4 month 93.133 base but remains heavy, 93.668/93.746 on the day.
- AUD/USD slips from near 4 month peak at 0.8164, NZD off fm 0.7564 to 0.7441.
- Switzerland April Producer/Import price -2.1% m/m, -5.2% y/y vs previous 0.2%/-3.4%.
- UK March Construction output 3.9% m/m, vs previous -0.3% m/m. 2.5% expected. Biggest rise since Jan 2014.
- BOJ Kuroda: No need for further ease now, too early to debate exit strategy too.
- BOJ mulls which interest rate to use as policy tool post QQE.
- Polish presidential challenger Duda leads in the polls ahead of May 24 runoff.
- NBP Hausner- Rates will have to be raised in H2 2016.
- China net FX buying at 32.4 b yuan in April CB data.
- Australian PM backs probe into iron ore slump.
- Poland’s Central banker Hausner – Potential hike in public spending could push GDP growth up to 4 pct y/y.
Economic Data Ahead
- (0830 ET/1230 GMT) US Empire State Manufacturing Index (May) consensus 5.00, previous -1.19.
- (0915 ET/1315 GMT) US Industrial Production (April) consensus +0.1% m/m, previous -0.6% m/m.
- (0915 ET/1315 GMT) US Factory Output (April) consensus +0.2% m/m, previous +0.1% m/m.
- (0915 ET/1315 GMT) US Capacity Utilization (April) consensus 78.5%, previous 78.4%.
- (1000 ET/1400 GMT) US UOM Sentiment (May) consensus 96.0, previous 95.9.
- (1000 ET/1400 GMT) US UOM Current Conditions (May) consensus 107.0, previous 107.0.
- (1000 ET/1400 GMT) US UOM Expectations (May) consensus 88.6, previous 88.8.
- (1400 ET/1800 GMT) US Treasury International Capital Statistics (March).
Key Events Ahead
- (1145 ET/1545 GMT) US Fed Trade operation 30-year Ginnie Mae (max $875 mln).
FX Recap
EUR/USD extended its drop to hit a session low at 1.1345 as the German-US 10-year bond yield spread narrowed, thereby supporting the greenback. The 10-year treasury yield is now down 4.9 basis points, while the 10-year German yield is now down almost 6 basis points. The yield play is likely to remain in place throughout the European session, given the absence of major economic data releases. 1.1450 is an immediate resistance and if that holds we may see a short dip. Initial support is seen around 1.1324 levels. Option expiries are at 1.1250 (679M), 1.1350 (379M). USD/CHF: 0.9000 (293M).USD/JPY pair trades higher at 119.86, having posted a daily high at 119.88 levels. The US dollar is appreciating against the Japanese Yen and after climbing 60 pips in the European session, it broke above the 200-hour MA at 119.70 and it is now trading at 2-day highs just below 120.00. On the top side, the next resistance is located at 120.30 (May 1 High) levels and above which it could extend gains 120.54 (May 5 High) levels. Immediate support might be located at 118.85 levels. Option expiries are at 119.00 (270M), 119.75 (216M), 120.50-55 (1BLN).GBP/USD made a new low at 1.5715 levels today and currently trading flat at 1.5725 levels, largely on the back of flat UK construction output data. The pair has an immediate resistance at 1.5845 above which gains could be extended to 1.5900 levels. On the other side, support is seen at 1.5672. Option expiries are at 1.5600 (273M), 1.5750 (224M), 1.5850 (200M).USD/CHF is trading around 0.9204 levels and made intraday low at 0.9113 levels. Today Switzerland released producer import price data with negative numbers and due to that data CHF is depreciating against the major peers. Near term support is seen at 0.9070 levels and resistance is seen at 0.9227 levels.AUD/USD is supported below 0.8050 levels and trading around 0.8008 levels. Also significance noting that in the last 24hours, iron ore has been under pressure, which might have weighed on the Aussie. Today is no major data schedule for Australia. Markets now eye US UOM consumer sentiment data due later in a day. Initial support is seen at 0.7964 and resistance at 0.8239 levels. Option expiries are at 0.8000 (1.2BLN). NZD/USD: 0.7400 (200M).
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