Market Roundup
- Dollar recovers from 4 month lows, DXY 92.268/93.799. 92.135 was last week’s low.
- EUR/USD tests 1.1366 from 1.1450. 1.1468 was Friday’s peak.
- AUD/USD, NZD/USD lower at 0.7993, 0.7412.
- U.S crude futures rise $60.69/barrel on heightened Mideast tensions.
- Brent up near 4% from Friday 65.37 low but struggling to maintain gains.
- Iran deputy oil min says OPEC unlikely to cut output.
- ECB Mersch- Success of asset purchase programme depends on full implementation.
- Fed Evans- If confidence in economy, could imagine a case being made for June hike.
- Greek Govt- Aims to make all payments, when asked about Jun 5 IMF payments.
- SNB Zurbruegg- Negative interest rates working as expected, current level satisfactory.
- Zurbruegg- Rise in CHF poses enormous challenges.
- Switzerland sight deposits fall in w/e May 15 to 377.233bln from previous 379.364.
- Switzerland March Retail sales -2.8% y/y vs previous -3.1%.
- Riksbank Ingves- Key that SEK doesn’t strengthen quickly.
- Event risk today’s 1100 GMT Riksbank non-policy meet, CPI concerns could trigger rate cut.
- BoJ Economist: Expect to reach 2% target in H1 of fiscal 2016.
- ECB’S Mersch- Success of asset purchase programme depends on its full implementation.
- Swedish C. Banker Ingves- If we need to do more can extend purchases of bonds, cut rates, lower repo rate path.
Economic Data Ahead
- (1000 ET/1400 GMT) US NAHB Housing Market Index (May) consensus 57, previous 56.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 30-year Fannie Mae/Freddie Mac (max $2.000 bln).
- (1430 ET/1830 GMT) Fed Trade operation 15-year Fannie Mae/Freddie Mac (max $575 mln).
FX Recap
EUR/USD broke 1.1400 levels and made a new intraday low at 1.1366 levels. It is currently trading around 1.1396 levels. The pair has broken intraday major support 1.1395 and this confirms short term weakness, a decline till 1.1320 cannot be ruled out. Italy trade balance data came with positive numbers and now market will eye on US NAHB housing market index due later in a day. 1.1450 is an immediate resistance and if that holds we may see a short dip. Initial support is seen around 1.1324 levels. Option expiries are at 1.1300 (619M), 1.1450 (629M), 1.1500 (286M).USD/JPY is trading higher at 119.67, having posted a daily high at 119.76 levels and low at 119.34 levels. JPY released Core machinery orders with positive numbers and revised industrial production with negative numbers. On the top side, the next resistance is located at 120.30 (May 1 High) levels and above which it could extend gains 120.54 (May 5 High) levels. Immediate support might be located at 118.85 levels. Option expiries are at 118.95-119.05 (1.1BLN), 119.20 (260M), 120.00 (793M).GBP/USD is slipped from 1.5814 levels and trading around 1.5775levels. It made intraday high at 1.5737 and low at 1.5651 levels. Today is data free session for UK. The pair has an immediate resistance at 1.5845 above which gains could be extended to 1.5900 levels. On the other side, support is seen at 1.5633.USD/CHF is trading around 0.9168 levels and made intraday low at 0.9152 and high at 0.9216 levels. Today Switzerland released retail sales data with negative numbers. SNB board member Zurbruegg says in newspaper interview Swiss Franc still greatly overvalued against the euro. After the data CHF depreciated against major peers but the movement was temporary only. Near term support is seen at 0.9070 levels and resistance is seen at 0.9227 levels.AUD/USD is supported below 0.8050 levels and trading around 0.7998 levels. It has made intraday high at 0.8044 levels and low at 0.7992 levels. Today AUD$ released new motor vehicle sales data with flat numbers. RBA Lowe gave the market a push saying it still had scope to cut interest rates. Initial support is seen at 0.7964 and resistance at 0.8162 levels. Option expiries are at 0.8000 (755M).
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