Market Roundup
- BOE holds rates/QE steady, makes no statement after decision, GBP adds to post-election gains
- Fed’s Williams prefers Fed not telegraph timing of Rate hike, every meeting is on table for a hike
- Eurogroup’s Dijsselbloem says Greece could get partial disbursement in exch for partial implementation
- Greece’s Varoufakis differences w/creditors narrowing progress on VAT reform & privatization; gaps remain on labor mkt reform
- Greece executed order for May 12 IMF payment of EUR 750m
- Brazil ’15 inflation f/c 8.29 v 9.26% prev week, ’15 GDP growth -1.20 v -1.18%
- Reuters Summit-EU watchdog ESMA’s Maijoor says QE risk of overvaluation in stocks/bonds considerable
- Reuters Poll Traders see 23% chance of Greece leaving EZ (40% 2 weeks ago)
Economic Data Ahead
- (1950 ET/ 2350 GMT) Japan Foreign Reserves Apr (previous 1245.30b)
- (2130 ET/ 0130 GMT) Australia Housing Finance Mar (consensus 1%, previous 1.20%)
- (2130 ET/ 0130 GMT) Australia Invest Housing Finance Mar (previous -3.40%)
- (0100 ET/ 0500 Japan Coincident Indicator MM Mar (previous -2.8)
- (0100 ET/ 0500 Japan Leading Indicator Mar (previous -0.2)
Key Events Ahead
- –:– Australia releases 2015/16 Federal Budget
FX Recap
USD/JPY: The better tone from US treasuries is underpinning USD/JPY. now gyrating around 120.00 the figure. Nothing relevant from the US calendar today. In Tuesday’s docket, Japan flash Leading Economic Index and Coincident Index for March to be in focus. The pair is now trading at 120.03 up 0.22% on the day. Next hurdle is at 120.24 (high May 8) followed by 120.51 (high May 5) and then 120.84 (high Apr 13). Supports lie at 119.40 (low May 11), 119.34 (daily cloud base) and finally 119.06 (low May 7). Option expiries Tuesday 12 May: 120.00 (1.2BLN)
EUR/USD initially unmotivated but now testing the 1.1165/70 band following the Eurogroup Q&A session. The pair was capped by 1.1200, traded in a narrow range between 1.1140 and 1.1170. The pair is currently trading at 1.1163 down 0.36% on te day. Initial support is seen at 1.1100 (psychological level) followed by 1.1066 (low May 5) and finally 1.0959 (low Apr 29). Resistances are located at 1.1207 (high May 11) would target 1.1290 (high May 8) en route to 1.1370 (high May 6). Option expiries Tuesday 12 May: 1.1100 (584M), 1.1000 (776M)
EUR/JPY has been attempting the another go at the 134 handle. Eurogroup has been the main focus while option expiries were large in both the Yen and EUR NY cut’s. Concerns rising that Greece will not be able to meet the deadlines. Tomorrow alone, there is the deadline for Greece to repay EUR757m to the IMF. EUR/JPY is currently trading at 133.93 with a high of 134.24 and a low of 133.48.
GBP/CHF is rising for the third trading day in a row as the pound climbs across the board. The pair peaked on Monday, approaching 1.4600, up 750 pips from last week lows. Support could be found at 1.4525/30, 1.4450 and 1.4410. On the flipside resistance might lie at 1.4600, 1.4665 (Apr 28 high) and 1.4700/10.
USD/CAD remains rangebound, trading between 1.2000 and 1.2200. After climbing as high as 1.2140 overnight, USD/CAD has now deflated to the 1.2090 area. In this week’s docket US Retail Sales due on Wednesday ahead of the BoC Review due on Thursday will be relevant. At the time of writing the pair is up 0.15% trading at 1.2091. Next hurdle is at 1.2145 (high May 8) followed by 1.2164 (high May 7) and then 1.2180 (high May 4). On the flip side, supports are seen at 1.2080 (low May 11) ,1.2046 (low May 8) and finally 1.2033 (low May 7). Option expiries Tuesday 12 May: 1.2065 (375M)
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