- Fed hears data more loudly than IMF, World Bank.
- Japan Reuters Tankan June manufacturing index +14, non- manufacturing +36, May +13, +33, +19 and +36 eyed in September, non-mfg index at record high, consumption picking up.
- MoF flow data week-ended June 13 – Japanese buy net Y156.2 bln foreign stocks, sell trln bonds, buy Y4.5 bln bills; foreign investors sell net Y413.2 bln Japan stocks, volume massive, Y276.1 bln bonds, buy Y776.7 bln bills.
- MUFJ to issue Japan’s first CNY bond, CNY350 mln via MUFJ/MS.
- China May new home prices +0.2% m/m, -5.7% y/y, April -6.1% y/y.
- No breakthrough expected at EuroGroup (on Greece) despite Faymann visit, Juncker call.
- ECB/Buba Weidmann – ECB can’t fund Greece if political talks fail – Reuters.
- NZ Q1 GDP +0.2% q/q, +2.6% y/y, +0.6% and +3.0% eyed, drought bites, backs RBNZ rate cut view.
- (0430 ET/0830 GMT) UK May retail sales, unchanged m/m, +4.8% y/y eyed; last +1.2%, +4.7%.
- (0430 ET/0830 GMT) UK May ex-fuel, +0.1% m/m, +4.5% y/y eyed; last +1.2%, +4.7%.
- (0500 ET/0900 GMT) Euro zone Q1 labour costs and wages; last +1.1% y/y, +1.0%.
- (0830 ET/1230 GMT) US Q1 current account balance, $117.0 bln deficit eyed; last $113.5 bln deficit.
- (0830 ET/1230 GMT) US weekly initial jobless claims, 275k eyed; last 279k.
- (0830 ET/1230 GMT) US May CPI, +0.5% m/m, unchanged y/y eyed; last +0.1%, -0.2%.
- (0830 ET/1230 GMT) US May core, +0.2% m/m, +1.8% y/y eyed; last +0.3%, +1.8%.
- (0830 ET/1230 GMT) US May real weekly earnings; last unchanged m/m.
- (1000 ET/1400 GMT) US Jun Philly Fed business sentiment index, 8.0 eyed; last 6.7.
- (1000 ET/1400 GMT) US May lead indicators index, + 0.4% m/m eyed; last + 0.7%.
- (1130 ET/1530 GMT) US May Cleveland Fed CPI; last +0.2%.
Key Events Ahead
- N/A ECB Governing and General Council two-day meeting (final day).
- N/A London Chatham House event, various speakers, attendees.
- (0330 ET/0730 GMT) SNB policy announcement, 50 bp cut in 3-mo LIBOR target to -0.75% eyed.
- (0400 ET/0800 GMT) Norges Bank policy announcement, 25 bp cut in deposit rate to 1.0% eyed.
- (0430 ET/0830 GMT) Spain E2.5-3.5 bln 0.25/4.0/2.15% 2018/20/25 Bono auctions.
- (0450 ET/0850 GMT) France E7.5-8.5 bln 0/3.75/0% 2018/19/20 OAT auctions.
- (0515 ET/0915 GMT) ECB TLTRO allotment announcement.
- (0550 ET/0950 GMT) France E1.5-2 bln 1.1/2.1/1.8% 2022/23/40 index-linked OAT auctions.
- (0600 ET/1000 GMT) ECB/Austria CB Nowotny speech in Berlin.
- (0900 ET/1300 GMT) EuroGroup/EcoFin meeting in Luxembourg.
FX Recap
EUR/USD is supported above 1.1300 levels and currently trading at 1.1365 levels. It has made intraday high at 1.1370 and low at 1.1329 levels. The Federal Reserve has released its June policy statement ahead of its press conference, and the impact is thus far resulting in a weaker US Dollar. Pair is supported above $1.1300 as the US central bank lowered its 2015 GDP forecast and boosted its 2015 unemployment rate forecast, suggesting a slightly less optimistic outlook among policymakers. FOMC showed that the Fed remained firm on their position not to change the key rates at the latest two-day meeting. Today Euro group meeting will be main focus for the day. Initial support is seen around 1.1297 and resistance is seen around 1.1386 levels.USD/JPY is supported around 123.00 levels and posted a high of 123.59 levels. It has made intraday low at 123.02 and currently trading at 123.04 levels. Pair remains under pressured largely on broad based US dollar weakness after the dovish FOMC statement and Yellen’s comments. Fed Chair Yellen noted, “Economic conditions do not yet warrant an increase in the federal funds rate.” Moreover, with no progress reached on Greece so far, the yen remains broadly supported on the back of increased bids for safe-haven assets such as gold. Near term resistance is seen at 124.57 and support is seen at 122.60 levels.GBP/USD is supported above $1.5800 levels. It made an intraday high at 1.5850 and low at 1.5822 levels. Pair is currently trading at 1.5834 levels. The British Pound reached a fresh year high against its American rival, soaring up to 1.5846 following the release of the UK monthly employment figures and dovish FOMC comments. Today UK will release retail sales data for the further direction to the parity. Initial support is seen at 1.5744 and resistance is seen around 1.5939 levels.USD/CHF is supported around 0.9200 levels and trading at 0.9199 levels and made intraday low at 0.9195 and high at 0.9224 levels. The Swiss National Bank’s (SNB) monetary policy assessment will also be closely watched, as the Central bank is expected to refrain from implementing any changes in its benchmark interest rate and leave it below zero through most of 2016. The SNB will also publish new growth and inflation projections. The interest rate to be charged on sight deposit account balances is now at a record low of -0.75%. The target range for the three-month Libor is also in negative territory, currently at between -1.25% and -0.25%. Near term support is seen at 0.9170 levels and resistance is seen at 0.9289 levels.AUD/USD is supported above 0.7700 levels and trading at 0.7723 levels. It has made intraday high at 0.7754 levels and low at 0.7709 levels. The losses in the Aussie were cushioned by broad US dollar weakness following dovish FOMC statement released on Wednesday, which revealed a wait and see approach by the Fed before the first Fed rate hike in a decade. The pair turned lower at Tokyo open, after the Australian dollar tracked losses from poor NZ GDP data. Looking ahead, markets shift their attention towards a batch of crucial economic data from the US which may have major impact on the AUD/USD pair. Initial support is seen at 0.7568 and resistance at 0.7811 levels.
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