Asia Round up Kiwi falls As Weaker Business Confidence Adds to Rate Cut Expectations – may 29th, 2015

Market Roundup

• NZ May ANZ business confidence 15.7%, own outlook 32.6%, April 30.2%, 41.3%.
• NZ April residential bldg consents -1.7% m/m, +1.4% y/y, March rev -10.3% m/m.
• Japan EconMin Amari – Can’t conclude current FX moves constitute excessive JPY weakness, markets determine appropriate FX levels, and rapid FX moves have economic impact whether it’s a JPY rise or fall.
• Japan April IP +1.0% m/m, +0.8% eyed, May estimated +0.5%, previous -0.3%, June -0.5%.
• Japan April core CPI +0.3% y/y, Tokyo May core +0.2%, +0.2% and +0.1% eyed.
• Japan April unemployment 3.3%, jobs-applicants ratio 1.17, 3.4% and 1.15 eyed, jobs-applicants March 1.15, 1.17 highest since March ’92.
• Japan April household spending -5.5% m/m, -1.3% y/y, +3.1% y/y eyed. April wage earner total real income +2.0% y/y.
• Standard Chartered launches Y150 bln 3-tranche samurai via MUFJ, Nomura and SMBC.
• Foreign CB US debt holdings +$17.214 bln to $3.339 trln May 27 week, Treasury holdings +$19.414 bln to $3.007 trln, agencies -$601 mln to $287.604 bln.
• NY Fed – FX swaps with foreign CB total $2 mln May 27 week, with BoJ.
• UK May GFK consumer confidence index +1, +4 eyed, April +4.
• Australia April private-sector credit +0.3% m/m, +0.5% eyed, housing +0.5%.

Economic Data Ahead

• (0100 ET/0500 GMT) Japan Apr housing starts, unchanged y/y eyed; last +0.7%, constr. orders +10.8%.
• (0145 ET/0545 GMT) Switzerland Q1 GDP, -0.1% q/q, +1.5% y/y eyed; last +0.6%, +1.9%.
• (0200 ET/0600 GMT) Germany April retail sales, +1.0% m/m eyed; last -1.4%.
• (0245 ET/0645 GMT) France April consumer spending, +0.2% m/m eyed; last -0.6%.

• (0245 ET/0645 GMT) France April producer prices; last +0.1% m/m.
• (0300 ET/0700 GMT) Spain May HICP – flash, -0.6% y/y eyed; last -0.7%.
• (0300 ET/0700 GMT) Switzerland May KOF economic indicator, 90.0 eyed; last 89.5.
• (0330 ET/0730 GMT) Sweden Q1 GDP, +0.5% q/q, +2.7% y/y eyed; last +1.1%, +2.7%.

• (0330 ET/0730 GMT) Sweden April household lending; last +6.4% y/y.
• (0400 ET/0800 GMT) Euro Zone April money supply M3, +4.9% AR  eyed; last +4.6%, 3-mo average +4.1%.

• (0400 ET/0800 GMT) Euro Zone April private loans, +0.2% m/m eyed; last +0.1%.
• (0400 ET/0800 GMT) Italy Q1 GDP – final, +0.3% q/q, unchanged y/y eyed; prelim +0.3%, unchanged.
• (0400 ET/0800 GMT) Spain March current account balance; last bln surplus.
• (0400 ET/0800 GMT) Norway May unemployment, 3.0% nsa, 93k sa eyed; last 3.0%, 91.65k.
• (0400 ET/0800 GMT) Norway April retail sales ex-autos, +0.3% m/m eyed; last +0.3%.
• (0500 ET/0900 GMT) Italy May CPI flash, +0.1% m/m, +0.1% y/y eyed; last +0.2%, -0.1%.
• (0500 ET/0900 GMT) Italy May HICP – flash, +0.1% m/m, +0.1% y/y eyed; last +0.4%, -0.1%.
• (0600 ET/1000 GMT) Italy April producer prices; last unchanged m/m, -2.4% y/y.
• (0830 ET/1230 GMT) US Q1 GDP prelim, -0.8% q/q eyed; last +0.2%.
• (0830 ET/1230 GMT) US Q1 PCE/core PCE prices – prelim, -2.0%, +0.9% eyed; last -2.0%, +0.9%.
• (0830 ET/1230 GMT) US Q1 GDP deflator prelim, -0.1% q/q eyed; last -0.1%.
• (0945 ET/1345 GMT) US May Chicago PMI, 53.0 eyed; last 52.3.
• (1000 ET/1400 GMT) US May U.Mich sentiment index – final, 89.9 eyed; prelim 88.6.

Key Events Ahead

• N/A Dresden G7 FinMins, central bankers meeting (final day).
• N/A BoE Young at Brussels EC EMIR public hearing, UK 1/3/6-mo t-bill auctions.
• (0400 ET/0800 GMT) Norway June currency operations, May NOK700 mln sales/day.
• (0700 ET/1100 GMT) ECB Mersch speech at Sofia IMF/World Bank meeting.

FX Recap

EUR/USD is supported above 1.0900 levels and currently trading at 1.0963 levels. It has made intraday high at 1.0973 and low at 1.0944 levels. Today Italy and Spain CPI data as well as Euro zone Money supply will be main focus for the European hours. Initial support is seen at 1.0859 and resistance is seen around 1.1041 levels.USD/JPY is trading below 124.00 levels and posted a high of 124.45 levels yesterday. It has made intraday low at 123.59 and currently trading at 123.68 levels. A data-filled Asian, with upbeat Japanese Core inflation print keeping the yen underpinned versus the US dollar. While Japanese stocks trades subdued amid stronger yen and falling Chinese equities. The US dollar extended its offered tone as traders remain nervous ahead of US Q1 GDP data due later today. Near term resistance is seen at 124.85 levels and support is seen at 123.22 levels.GBP/USD is supported below at $1.5350. It made an intraday high at 1.5341 and low at 1.5306 levels. The pair took a breather in its downslide and is seen struggling above 1.53. The pair keeps losses in reaction to news that the second estimate of UK Q1 GDP reading showed the UK economy slowed its pace of growth compared to the final quarter of 2014, while the reading confirmed the first estimate. Today is data free session for UK. Initial support is seen at 1.5258 and resistance is seen around 1.5371 levels.USD/CHF is supported below 0.9450 levels and trading at 0.9416 levels and made intraday low at 0.9407 and high at 0.9441 levels. Today Switzerland will release GDP data and KOF economic Indicator, which will provide further direction to the parity. Near term support is seen at 0.9285 levels and resistance is seen at 0.9571 levels.AUD/USD is supported below 0.7700 levels and trading at 0.7664 levels. It has made intraday high at 0.7673 levels and low at 0.7636 levels. The Aussie remains boosted largely as traders took to profit-booking on their AUD shorts after worse-than expected Australia’s private capex figures spurred rate RBA cut bets dragging the AUD lower to fresh six week lows of 0.7619 on Thursday. Moreover, the US dollar took a breather in its recent rally and has edged lower ahead of US GDP data which also keeps the Aussie underpinned. Initial support is seen at 0.7619 and resistance at 0.7752 levels.

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