Market Roundup
- US ADP National Employment May 201.0k, (consensus 200k, previous +165k)
- US International Trade MM USD Apr -40.88b, (consensus -44.0b, previous -50.57b)
- US ISM N-Mfg Idx May 55,7 (previous 57.8), 57 expected
- US ISM N-Mfg Employment Idx May 55.3, (previous 56.7)
- US ISM N-Mfg Price Paid Idx May 55.9, (previous 50.1)
- Brazil HSBC Composite PMI May 42.9, 44.2-prev, Growth weak- BCB expected to hike 50bps
- ECB leaves int rates unchanged
- ECB’s Draghi APP proceeding well, QE to run until Sep 2016, inflation set to increase later in ’15
- ECB’s Draghi won’t plan to change monetary policy stance in response to mkt volatility, present policy stance adequate to reach objective
- ECB’s Draghi GC wants Greece to stay in the euro
- EU’s Moscovici deal on Greece is only option there is no plan B
- German Fgn Minister up to Greek govt to adopt creditor reforms, Grexit would be catastrophic
- Greek Creditor proposal assumes 1% primary surplus in ’15, 2% in ’16, 3% in ’17
- Atlanta Fed’s GDPNow U.S. on track to grow 1.1 pct in Q2 after trade data vs 0.8% June 1
- Fed Beige Book Strong USD hurting some industries, slight wage/emp growth in most district
- Iraq oil minister says will pump 1mio BPD more w/in 6-7 mos after sanctions lifted
- Iran Oil Minister says after lifting of sanctions Iran o/p will return to pre-sanctions levels
Economic Data Ahead
- (1950 ET/ 2350 GMT) Japan Foreign Bond Investment w/e (previous 911.8b)
- (1950 ET/ 2350 GMT) Japan Foreign Invest JP Stock w/e (previous 561.2b)
- (2130 ET/ 0130 GMT) Australia Retail Sales MM Apr (consensus 0.4%, previous 0.3%)
- (2130 ET/ 0130 GMT) Australia Trade Balance G&S (AUD) Apr (consensus -2250m, previous -1322m)
- (2130 ET/ 0130 GMT) Australia Goods/Services Imports Apr (previous -2%)
- (2130 ET/ 0130 GMT) Australia Goods/Services Exports Apr (previous -2%)
Key Events Ahead
- (2000 ET/ 0000 GMT) Japan BOJ BOJ Gov Kuroda speaks on mon policy at the central bank’s conference
FX Recap
EUR/USD: Despite renewed uncertainty coming from the Greek front, EUR/USD has managed to rise more than 350 pips over the last sessions. The pair today reached its highest level in 2 weeks buoyed by rising bund yields. Currently it is trading at 1.1270, up 1.09% on the day, with immediate bullish target at 1.1325 (May 19 high). A break above 1.1325 will take the pair toward 1.1465 (May 15 recovery high). Supports are seen at 1.1078 (daily low/100-day SMA) and 1.0975 (50-day SMA). Option expiries for Thursday 04 June: 1.1100 (1.4BLN), 1.1145 (691M), 1.1195-1.1205 (690M), 1.1220(350M)
USD/JPY well placed on the 124 handle ahead of Nonfarm Payrolls this week. The pair is currently trading at 124.41 with a high of 124.69 and a low of 123.78. The major is consolidating the upside ahead of 124.80 resistance and on 123.60 support that defines the near term range. The 5 month uptrend at 119.20 is considered to be a key support. Option expiries for Thursday 04 June: 123.50 (950M), 124.00 (646M), 125.00 (400M)
USD/CHF rose sharply during the European session and peaked at 0.9420/25 but then quickly pared gains amid Draghi’s press conference. The pair dropped to test daily lows and the 0.9300, attempted to bounce back, but it was unable to rise above 0.9350. At the time of writing the pair trades at 0.9346. Resistance levels might lie at 0.9380, 0.9425 (daily high) and 0.9455/60 (May 2 high). On the flip side support could be located at 0.9300 (psychological and daily low), 0.9265 and 0.9240 (May 19 low).
USD/MXN: The Mexican peso resumed the decline against USD after a short lived recovery. USD/MXN rises above 15.500 and is testing Monday’s highs that lie around 15.530. A break higher could open the doors for a bullish run toward 16.000. Short term outlook for the pair continues to favor the upside, as greenback continues to rise at a modest pace but constantly. Banxico will announced its decision on monetary policy tomorrow, analysts are expecting it to remain on hold.
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