Asia Round up Aussie Returns to Post Fomc Minutes Highs – may 21th, 2015

Market Roundup

• BoJ Gov Kuroda and company to weigh raising economic assessment.
• Japan May flash mfg PMI 50.9, expansion again, April 49.9, orders pick up.
• Japan MoF flow data week-ended May 16 – Japanese buy net Y39.4 bln foreign stocks, trln bonds, Y42.4 bln bills; foreign investors buy net Y187.3 bln Japan stocks, sell Y672.8 bln bonds, Y383.4 bln bills.
• UK pay awards stuck at 2%, no pick-up this year.
• Greece to default in June without aid from lenders.
• China bank FX sales/purchases deficit narrows in April, anticipation for stable RMB improves.
• China May HSBC flash mfg PMI 49.1, 49.3 eyed, April 48.9, sub-50 3-mos now, output sub-index at 13-mo low on weak domestic and export demand.
• NZ budget surplus next year, less robust going forward, Moody’s sees NZ showing steady fiscal improvement despite ’15 deficit.
• NZ annual migration climbs to record high in April.

Economic Data Ahead

• (0300 ET/0700 GMT) France May PMI manufacturing – flash, 48.5 eyed; last 48.0.
• (0300 ET/0700 GMT) France May PMI Services – flash, 51.9 eyed; last 51.4.
• (0300 ET/0700 GMT) France May PMI composite – flash; last 50.6.
• (0330 ET/0730 GMT) Germany May PMI manufacturing – flash, 52.3 eyed; last 52.1.
• (0330 ET/0730 GMT) Germany May PMI services – flash, 53.9 eyed; last 54.0.
• (0330 ET/0730 GMT) Germany May PMI composite – flash; last 54.1.
• (0400 ET/0800 GMT) Euro zone May PMI manufacturing – flash, 52.0 eyed; last 52.0.
• (0400 ET/0800 GMT) Euro zone PMI services – flash, 53.9 eyed; last 54.1.
• (0400 ET/0800 GMT) Euro zone PMI composite – flash, 53.8 eyed; last 53.9.
• (0400 ET/0800 GMT) Euro zone March c/a balance, +E26.0 bln sa; last E26.4 bln sa, +E13.8 bln nsa.
• (0400 ET/0800 GMT) Euro zone March net investment flow; last E13.2 bln inflow.
• (0400 ET/0800 GMT) Italy April wage inflation; last unchanged m/m, +1.0% y/y.
• (0430 ET/0830 GMT) UK April retail sales, +0.4% m/m, +3.8% y/y eyed; last -0.5%, +4.2%.
• (0430 ET/0830 GMT) UK April – ex-fuel, +0.3% m/m, +3.7% y/y eyed; last +0.2%, +5.0%.
• (0600 ET/1000 GMT) UK May CBI trends survey – orders index; last +1.0.
• (0830 ET/1230 GMT) US w/e initial jobless claims, 271k eyed; last 264k.
• (0830 ET/1230 GMT) US April Chicago Fed national activity index; last -0.42.
• (0945 ET/1345 GMT) US May Markit mfg PMI – flash, 54.5 eyed; last 54.1.
• (1000 ET/1400 GMT) US May Philly Fed business sentiment index, 8.0 eyed; last 7.5.
• (1000 ET/1400 GMT) US April leading indicators index, +0.3% m/m eyed; last +0.2%.
• (1000 ET/1400 GMT) US April existing home sales, 5.24 mln AR eyed; last 5.19 mln.
• (1100 ET/1500 GMT) US May KC Fed mfg/composite indices; last -2, -7.

Key Events Ahead

• N/A BoJ Policy Board begins two-day meeting, Ireland E500 mln 6-mo bill sale.
• N/A ECB forum in Sintra, Portugal, various speakers, attendees (till May 23).
• (0430 ET/0830 GMT) BoE Dep Gov Bailey speech in Harrogate.
• (0430 ET/0830 GMT) Spain E4.5-5.5 bln 0.25/1.4/1.95% 2018/20/30 Bono auctions.
• (0450 ET/0850 GMT) France E7.5-8.5 bln 4/zero/2.5/3.25% 2018/20/20/21 OAT auctions.
• (0450 ET/0850 GMT) France E1-1.5 bln 1.85/3.4/0.7% 2027/29/30 index-linked OAT auctions.
• (0530 ET/0930 GMT) UK DMO bln 4.75% 2030 Gilt auction.
• N/A NY Fed conference in New York (till May 21).
• (0915 ET/1315 GMT) BoE MPC Weale speech at London AIECE conference.
• (1200 ET/1600 GMT) Buba Buch speech in Kiel.
• (1415 ET/1815 GMT) Canada FinMin Oliver speech at Toronto Bloomberg conference.
• (1900 ET/2300 GMT) SF Fed Williams, ex-Philly Fed Plosser in Stanford panel discussion.

FX Recap

EUR/USD is supported above 1.1100 levels and currently trading at 1.1121 levels. The movement is very less as it has made intraday high at 1.1129 and low at 1.1101 levels. Today Flash manufacturing data from France, Germany and Euro zone will be in main focus. 1.1316 is an immediate resistance and a daily close below 1.1120 levels may drag the pair towards 1.1015 levels.USD/JPY is trading higher at 121.04, having posted a daily high at 121.21 levels and low at 121.01 levels. Yesterday pair made high of 121.47 levels. It is fuelled by strong stocks of late and the volatility around the FOMC minutes overnight in the US session.  On the top side, the next resistance is located at 121.60. Immediate support might be located at 119.80 levels.GBP/USD recovered losses, trading around $1.5555. It made intraday high at 1.5560 and low at 1.5540 levels. Today UK retail sales data is due later in a day which will give further direction to the parity. Immediate resistance is seen at 1.5632, above which gains could be extended to 1.5700 levels. On the other side, support is seen at 1.5392 levels.USD/CHF is trading around 0.9350 levels and made intraday low at 0.9333 and high at 0.9361 levels. Today is data free session for Switzerland. Near term support is seen at 0.9315 levels and resistance is seen at 0.9412 levels.AUD/USD is supported above 0.7900 levels and trading at 0.7903 levels. It has made intraday high at 0.7912 levels and low at 0.7876 levels. AUD released Inflation expectation data with flat numbers as well as China Flash manufacturing data gave uplift to the parity as well. Initial support is seen at 0.7860 and resistance at 0.7976 levels.

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