Market Roundup
- US Industrial Output MM May -0.2%, (forecast 0.2%, previous -0.5%); Jun NAHB at 59 (highest since Sep)
- Canada Manufacturing Sales MM Apr -2.1%, (forecast -0.5%, previous 2.7%)
- ECB’s Draghi liquidity will be extended as long as Greek banks solvent with sufficient collateral
- ECB’s Draghi says latest data show econ recovery proceeding at moderate pace, expects inflation to remain low before rising by YE’15
- ECB’s Draghi for mon pol to yield full recovery has to be accompanied by structural action
- ECB’s Praet says monitoring FI volatility to see if likely or not to affect mon pol stance
- Greek non-payment of ECB bonds maturing Jul/Aug would not mean default rating (S&P)
- EU fin Ministers to discuss bank structural reform Friday, banks with trading activity over EUR 100b would face full requirements of new reform law
- Reuters Poll US FF rate seen 0.375% at end Q3, 0.625% YE ’15, 1.625 YE ’16
- Reuters Poll Median 30% chance Greece leaves EZ this year (Traders)
- Bank of England’S Forbes says financial institutions much better able to handle contagion from Greece than before
- Bank of England’S Forbes says most traditional channels of contagion from Greece are manageable
- Greek govt official denies German newspaper report on plan for Greece to impose capital controls this weekend if talks fail
- German govt spokesman says cannot confirm newspaper report that euro zone prepared Greek contingency plan including capital controls
- Russian foreign ministry says NATO boosting its presence near Russian borders may have ‘dangerous consequences’
Economic Data Ahead
- (2130 ET/ 0130 GMT) Australia New Motor Veh Sales m/m May (previous -1.5%)
- (1950 ET/ 2350 GMT) Japan Exports YY May (consensus 3.5%, previous 8%)
- (1950 ET/ 2350 GMT) Japan Imports YY May (consensus -7.5%, previous -4.2%)
- (1950 ET/ 2350 GMT) Japan Trade Balance Total Yen May (consensus -226.0b, previous -53.4b)
Key Events Ahead
- (2130 ET/ 0130 GMT) Australia RBA June Meeting Minutes
FX Recap
GBP/USD: Investors selling the USD ahead FOMC meeting Wednesday pushing GBP/USD higher. GBP/USD trading above 1.5600 for the first time in 4 weeks. Cable rallied over 120 pips on the day from 1.5485 during the European session to break above 1.5600. At the time of writing GBP/USD is trading at 1.5602, up 0.26% on the day, having posted a daily high at 1.5610 and low at 1.5487. This week’s main event for the dollar and broader currency markets will be the outcome of the Fed’s two-day meeting on Wed. Above 1.5600, GBP/USD will find resistances at 1.5620, 1.5660 and 1.5680. To the downside, supports are at 1.5570, 1.5550 and 1.5490.
EUR/USD is up for the third week in a row; however, the pair remains trading in a big range between 1.1100 and 1.1370. Euro’s rally from 1.1200 against the US Dollar took a breather at 1.1290 where the pair found a selling interest that sent the pair back to 1.1250. Currently, EUR/USD is trading at 1.1271, up 0.06% on the day, having posted a daily high at 1.1288 and low at 1.1189. Not much progress on the Greek front, just more of the same rumours and counter-rumours. Above 1.1250, EUR/USD will find resistances at 1.1290 and 1.1330. To the downside, supports are at 1.1240, 1.1200 and 1.1180. Option expiries for Tuesday 16 June: 1.1200 (1BLN)
AUD/JPY: The aussie holds a bullish tone against the yen in the short term as it continues to reach higher lows, recovering after hitting last week 94.51, the lowest since May 11. AUD/JPY bottomed at 95.15 and then turned to the upside as AUD/USD rose past 0.7735. Currently the pair trades at 95.80/85, up 45 from Friday’s closing price and is testing the 96.00 resistance area. RBA will release the minutes of its latest meeting Tuesday and also new vehicle sales numbers will be published. No relevant economic data from Japan is expected on Tuesday.
USD/CAD: Renewed softer tone in the US dollar dragging USD/CAD towards the 1.2300 key support. US Capacity Utilization, Industrial Production and the manufacturing gauge by the Empire State index all missed expectations weighing on USD. Currently the pair is down 0.04% at 1.2314 with the immediate support at 1.2296 (low Jun 15) followed by 1.2279 (low Jun 12) and finally 1.2253 (low Jun 11). On the other hand, a breakout of 1.2362 (high Jun 15) would aim for 1.2442 (high Jun 9) and then 1.2473 (high Jun 8). Option expiries for Tuesday 16 June: 1.2185 (1BLN), 1.2200 (320M), 1.2500 (859M)
USD/MXN: Last week USD/MXN lost 2.25% and fell from record highs at 15.767 to 15.341. Today the Mexican peso is falling modestly against the US dollar, retreating for the second day in row after rising sharply last week. USD/MXN rose back above 15.400, but the recovery was capped by 15.450. The next important report will be on Thursday with release of latest Banxico minutes.
EUR/JPY: ECB with their asset purchasing programme and Greece’s failure of progress continues to weigh on the euro. EUR/JPY has collected up a bearish theme with a better bid Yen. The pair is currently trading at 139.25 with a high of 139.35 and low of 138.06. Resistances are seen at 139.87, 140.22 and 140.57, while supports on the downside are located at 138.51, 138.16 and 137.81. Option expiries for Tuesday 16 June: 139.75 (330M)
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