Market Roundup
- US PPI Final Demand YY Apr -1.3%, (consensus -0.8%, previous -0.8%); inflation key fed metric
- US Initial Jobless Claims w/e 264k, (consensus 275k, previous 265k); near 15-yr low
- ECB’s Draghi will implement APP in full, little indication that financial imbalances are emerging
- Buba’s Weidmann concerned about increasing politicization of c.banks (Handelsblatt)
- Iranian boats fire shots across bow of Singapore-flagged vessel in Persian Gulf (CNN)
- BoC’S Patterson: Bank proposing to fine-tune operations, says no inferences should be drawn from proposals about current or future stance of monetary policy
Economic Data Ahead
- (1950 ET/ 2350 GMT) Japan Corp Goods Price MM Apr (consensus 0.1%, previous 0.3%)
- (1950 ET/ 2350 GMT) Japan Corp Goods Price YY Apr (consensus -2.1%, previous 0.7%)
- (0100 ET/ 0500 GMT) Japan Consumer Confidence Index Apr (previous 41.7)
Key Events Ahead
- (2340 ET/ 0340 GMT) Japan BOJ Governor Kuroda speaks at the Yomiuri International Economic Society
FX Recap
EUR/USD: Better-than-expected US jobless claims twarted EUR/USD’s brief recovery attempt. The pair reached a 3-month high of 1.1444 during the European session but pulled back after the release of Claims data. Comments from ECB Draghi further weighed on the shared currency, and EUR/USD dropped back to the 1.1340 zone. However, USD recovery didn’t last and EUR/USD resumed the upside to currently trade at 1.1400, 0.42% above its opening price. Immediate resistances are at 1.1444 (daily high), 1.1485 (Feb 6 high) and 1.1500 (psychological level). Supports are seen at 1.1340 (daily low), 1.1252 (100-hour SMA) and 1.1202/00 (May 13 low/psychological level). Option expiries for Friday 15 May: 1.1250 (679M), 1.1350 (319M)
GBP/CHF: The pound lost strength with the outlook presented with the Bank of England inflation report yesterday. Sterling is falling against the Swiss franc for the second day in a row retreating further after reaching yesterday weekly highs at 1.4608. GBP/CHF bottomed during the European session at 1.4340, hitting the lowest level since Monday. The pound’s recovery was capped by the short term resistance area located around 1.4435/40. Currently the pair trades at 1.4390 still holding a bearish tone for the coming hours. A break above 1.4440 could change the intraday perspective.
USD/JPY has finally penetrated the 119 handle to the downside to print the lows for May so far. The pair is currently trading at 119.15 with a high of 119.34 and a low of 118.88. Thin data from the US today. Through 119.65, to the downside, 118.80 and 118.40 come in as next key supports. Option expiries for Friday 15 May: 119.00 (220M), 119.75 (216M), 120.50-55 (1BLN)
USD/CAD has managed to revert the initial weakness buoyed by positive data from the US Initial Claims. The pair rebounded from daily lows near 1.1920 to touch 1.2000. However the pair failed to sustain the upside momentum and the recovery halted at 1.2000. At the moment the pair is trading at 1.1988 up 0.25% on the day. Next hurdle is at 1.2028 (high May 13) ahead of 1.2107 (high May 12) and then 1.2128 (21-d MA). On the flipside supports are at 1.1918 (low May 14), 1.1900 (psychological level) and then 1.1836 (low Jan 12). Option expiries for Friday 15 May: 1.1970 (531M), 1.2050 (475M), 1.2200 (492M)
USD/MXN: The mexican peso extends gains for the third day in a row versus the US dollar and reached the strongest level since April 9. USD/MXN accelerated toward 15.100 after Mexico inflation report showed that the IPP declined 0.4% in April. The pair climbed on Asian hours to 15.300 but then turned to the downside, moving during the rest of the day with a bearish bias. Currently is hovering around 15.095, attempting to consolidate below the important 15.100 level.
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