Market Roundup

  • US NFIB Business Optimism Index Apr 96.9, (previous 95.2)
  • US JOLTS Job Openings Mar +4.994m, (consensus 5.100m, previous +5.144m)
  • Mexico Industrial Output MM Mar 0%, (consensus 0.35%, previous 0.30%); weak may keep Banxico on hold
  • Fed’s Williams safer to raise rates a bit earlier, gradually, than later & dramatically
  • Fed’s Williams Fed’s ability to delay rates liftoff now more limited than speeding up tightening
  • White House says hopes U.S. Senate can work through trade bill ‘snafu’
  • ECB raises emergency funding cap for Greek banks to EUR 80 bln
  • Greece tapped its emergency IMF reserves to pay IMF debt
  • Greek PM calls on EU/IMF lenders to offer concessions in talks
  • Spain’s Economy Minister Luis de Guindos sees Q2 growth similar to Q1
  • China to accept govt bonds as collateral from some borrowers
  • Moody’s: stronger US dollar and shifts in capital flows stoke divisions in global growth
  • Moody’s: Maintain forecast that GDP growth in China will slow gradually to 6.8% in ’15 & 6.5% in ’16 after 7.4% last year
  • Moody’s: Australia’s relatively low govt debt levels mitigate credit impact of continued fiscal deficits
  • Moody’s: forecast Mexico GDP growth slightly below 3 percent this year & around 3.5% in 2016
  • OPEC raises ’15 oil demand growth forecast from 1.17m BPD to 1.18m BPD (Monthly Report)
  • UK’s Cameron could hold EU referendum earlier than end of 2017, seeks treaty change

Economic Data Ahead

  • (1845 ET/ 2245 GMT) NewZealand Food Price Index Apr previous 0.1%)
  • (1950 ET/ 2350 GMT) Japan Bank Lending YY Apr (previous 2.6%)
  • (1950 ET/ 2350 GMT) Japan Current Account NSA JPY Mar (consensus 2060.1b, previous 1440.1b)
  • (0100 ET/ 0500 GMT) Japan Economy Watchers Poll Apr previous 52.2)
  • (0130 ET/ 0530 GMT) China Urban investment (ytd)yy Apr (consensus 13.5%, previous 13.5%)
  • (0130 ET/ 0530 GMT) China Industrial Output YY Apr (consensus 6%, previous 5.6%)
  • (0130 ET/ 0530 GMT) China Retail Sales YY Apr (consensus 10.5%, previous 10.2%)

Key Events Ahead 

  • (1700 ET/ 2100 GMT) NewZealand Reserve Bank of New Zealand to publish fiscal stability report
  • (1705 ET/ 2105 GMT) NewZealand RBNZ Governor Wheeler News Conference on FSR

FX Recap 

GBP/USD: Pound entering a phase of consolidation, with GBP/USD deflating from daily highs to the current area of 1.5680/70. UK’s labour market figures in focus Wed ahead of the critical Quarterly Inflation Report by the BoE and Governor Carney’s speech. Currently the pair is trading at 1.5684 up 0.63% on the day. Next resistance seen at 1.5713 (high May 12) ahead of 1.5753 (high Dec 17) and then 1.5785 (high Dec 16). Supports are at 1.5557 (low May 12), 1.5498 (high Apr 29) and finally 1.5393 (low May 11). 

EUR/USD: After rising as high as 1.1278 during the European session, EUR/USD has surrendered part of those gains and is now attempting to consolidate around the mid-1.1200s. EUR/USD was indifferent to Williams’ speech, Williams stressed that a rate hike could happen at any meeting. Currently the pair is up 0.70% at 1.1233 with the next hurdle at 1.1290 (high May 8) ahead of 1.1392 (high May 7) and finally 1.1400 (psychological level). Supports seen at 1.1131 (low May 11), 1.1067 (low May 5) then 1.1059 (38.2% of 1.0521-1.1392). Option expiries Wednesday 13 May: 1.1145 (789M), 1.1205 (589M), 1.1260 (431M), 1.1300 (267M)

USD/JPY: USD is falling across the board, dragging USD/JPY down to hit fresh daily lows, erasing yesterday’s gains. The pair dropped to 119.79, then bounced to the upside but it was unable to recover 120.00.  Resistance seen at 119.95 (intraday level), 120.30 and 120.50 (May 5 high). On the flip side, support could be located at 119.75/850, 119.60 and 119.20. Option expiries Wednesday 13 May: 119.50 (350M), 120.50 (280M)

USD/CAD extended losses during the American session amid broad greenback weakness and higher oil prices underpinning the loonie. USD/CAD broke below the 1.2000, dropped more than 120 pips throughout the day and scored a 6-day low of 1.1977.  At time of writing, the pair is trading at 1.1985, down 0.95% on the day. Strong support seen at 1.1940 area, followed by 1.1900 (psychological level). Resistances are seen at 1.2106 (daily high) and 1.2150 (21-day SMA). Option expiries Wednesday 13 May: 1.2200 (350M)

EUR/CHF remains capped in a range, consolidating since the beginning of the week, moving sideways without clear direction. The pair weakened and dropped below 1.0400 during the European session, but pared loses and is currently trading around 1.0420, flat for the day. Support seen at 1.0385 and resistance at 1.0435/40 (May 11, 12 high). The needs to break 1.0435 for further gains. 

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