Market Roundup
- Japan Econ Min Amari – Japan to recover moderately, mindful of risks, job-income improvements, oil price fall effect to underpin recovery, deflation not completely beat yet.
- Japan Q1 GDP +0.6% q/q, +2.4% AR, +0.4% and +1.5% eyed, growth best since Q1 ’14, CAPEX +0.4% q/q, +0.8% eyed, still weak but 1st gain in 4 qtrs, external demand contribution -0.2%, domestic +0.8%, GDP deflator +3.4% y/y.
- Japan to invest $100 bln in Asian projects, same as AIIB – Straits Times.
- Hedge funds got early access to info that prompted EUR slide – Telegraph.
- Australia May Westpac/MI consumer sentiment index 102.4, +6.4%m/m, +10.1% y/y.
- Dairy prices fall, volumes drop at NZ Fonterra auction, GDT index -2.2%.
Economic Data Ahead
- (0200 ET/0600 GMT) Germany April producer prices, +0.2% m/m, -1.4% y/y eyed; last +0.1%, -1.7%.
- (0330 ET/0730 GMT) Sweden April unemployment, 8.2% nsa, 7.7% sa eyed; last 8.0%, 7.6%.
- (0400 ET/0800 GMT) Norway Q1 GDP, national/mainland, -0.1%/+0.2% q/q eyed; last +0.9%, +0.5%.
- (0500/0900 GMT) Switzerland May ZEW investor sentiment index; last -23.2.
Key Events Ahead
- N/A Munich conference on growth-policy-reform, various speakers (final day).
- N/A Sweden govt bond, Portugal E1-1.25 bln each 6/12-month t-bill auctions.
- (0430/0830 GMT) BoE MPC May 8 meeting minutes, 9-0 vote for no change eyed.
- (0800 ET/1200 GMT) Riksbank DepGov Jocknick speech at Stockholm seminar.
- N/A NY Fed conference in New York (till May 21).
- (1400 ET/1800 GMT) FOMC April meeting minutes.
FX Recap
EUR/USD broke 1.1200 levels and made a new intraday low at 1.1120 levels. It is currently trading around 1.1139 levels. The pair has broken intraday major support 1.1120 and this confirms short term weakness. Today Germany PPI data will be main focus in European session. 1.1316 is an immediate resistance and a daily close below 1.1120 levels may drag the pair towards 1.1070 levels.USD/JPY is trading higher at 120.93, having posted a daily high at 120.98 levels and low at 112.65 levels. USD/JPY remains lifted as markets continue to cheer notable US housing starts and building permits data released in the previous session which boosted the USD bulls. Moreover, better than forecasts Japanese GDP figures released this morning failed to lift the yen versus the US dollar, taking the pair higher towards 121 handle. On the top side, the next resistance is located at 121.60. Immediate support might be located at 119.80 levels.GBP/USD extends losses, falls below $1.55 for first time since May 11 to $1.5445 and trading around 1.5502 levels. It made intraday high at 1.5523 and low at 1.5494 levels. UK will release monetary policy meeting minutes in European session. Immediate resistance is seen at 1.5737, above which gains could be extended to 1.5800 levels. On the other side, support is seen at 1.5392 levels.USD/CHF is trading above 0.9350 levels and made intraday low at 0.9358 and high at 0.9383 levels. CHF depreciated after negative retail sales data as well as SNB board member Zurbruegg told to newspaper interview Swiss that Franc still greatly overvalued against the euro. Today Switzerland ZEW economic sentiment data will be main focus. Near term support is seen at 0.9335 levels and resistance is seen at 0.9412 levels.AUD/USD is supported around 0.7900 levels and trading around 0.7920 levels. It has made intraday high at 0.7934 levels and low at 0.7897 levels. The Westpac-Melbourne Institute Consumer Sentiment index jumped 6.4% to a 16-month high of 102.4 in May from 96.2 in April. Moreover, the Aussie remains boosted also as the greenback takes a breather in its rally following yesterday’s housing data that showed improving housing sector in the US. Meanwhile, traders now shift their focus towards FOMC minutes release later today. Initial support is seen at 0.7860 and resistance at 0.7976 levels.
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