- Yen off session lows hit after Kuroda comments.
- Euro holds up despite Greece concerns, EUR/USD range bound from 1.1239 to 1.1330.
- Sterling falls after UK inflations inches up just 0.1%.
- GBP/USD to 1.5542 from 1/5631 session tops.
- German DAX off 1.25%, ZEW a factor but stocks down at opening.
- UK May CPI 0.2% m/m, 0.1% y/y vs previous 0.2%/-0.1%. 0.2%/0.1% expected.
- UK May PPI Input prices -0.9% m/m, -12.0% y/y vs previous 1.4%/-11.0% revised. 0.4%/-11.4% expected.
- UK May PPI Output prices 0.1% m/m, -1.6% y/y vs previous 0.1% revised/-1.7%. 0.1%/-1.6% expected.
- UK May PPI core Output 0.0% m/m, 0.1% y/y vs previous 0.0%/0.1%. 0.0%/0.1% expected.
- Euro Zone Q1 Employment 0.1% q/q, 0.8% y/y vs previous 0.1%/0.9%.
- Germany June ZEW economic sentiment 31.5 vs previous 41.9. 37.1 expected.
- Germany June ZEW current conditions 62.9 vs previous 65.7. 63.0 expected.
- Greece denies report of capital controls by weekend if talks fail.
- ECJ says ECB OMT bond-buying plan in line with EU law.
- CDU lawmaker- Would have to accept a ‘Grexit’ if no solid reform package presented.
- Switzerland government trims growth forecasts, warns on Greece.
- (0830 ET/1230 GMT) US Housing Starts (May) consensus 1.100 mn, previous 1.135 mn.
- (0830 ET/1230 GMT) US Building Permits (May) consensus 1.100 mn, previous 1.140 mn.
- (0855 ET/1255 GMT) US Redbook Same Store Sales Index previous +1.2% y/y.
Key Events Ahead
- (1145 ET/1545 GMT) Fed Trade operation 30-year Fannie Mae/Freddie Mac (max $1.825 bn).
- (1300 ET/1700 GMT) FOMC two-day meeting begins (see Fed Outlook).
FX Recap
EUR/USD is supported above 1.1200 levels and currently trading at 1.1257 levels. It has made intraday high at 1.1328 and low at 1.1238 levels. Greece is running out of time before the final portions of its €240 billion bailout expire on June 30. It is unknown if Greece has enough cash in emergency reserve funds to meet a €1.1 billion loan repayment to the International Monetary Fund at the end of the month. On Monday, yields on Greece 2-Year surged almost 300 basis points to 26.6% as the possibility of a Greek deal waned. Investors await Thursday’s meeting of euro zone finance ministers in Luxembourg for further developments in the saga. Pair is now intensifying the intraday decline after the ZEW Survey in Germany and the EMU disappointed investors Economic Sentiment and Current Situation in the German economy dropped to 31.5 and 62.9 respectively, while EMU’s Economic Sentiment fell to 53.7 from 61.2. In addition, the Employment Change in the Euro area came in at 0.1% q/q during the first quarter and 0.8% on a yearly basis. Initial support is seen around 1.1144 and resistance is seen around 1.1386 levels. Option expiry is at EUR/USD: 1.1200 (1.2BLN).USD/JPY is supported above 123.00 levels and posted a high of 123.79 levels. It has made intraday low at 123.30 and currently trading at 123.52 levels. Pair jumped to an intraday high of 123.79 after the Bank of Japan governor Kuroda clarified that he is not in opposition to the idea of further weakness in the Yen nominal exchange rate. Today Governor made his stance clear by stating that he never meant to predict the Yen outlook nor he is against further weakness in the Yen nominal exchange rate. Near term resistance is seen at 124.57 and support is seen at 123.02 levels. Option expiries are at 122.75 (250M), 123.00 (876M), 123.75 (285M).GBP/USD is supported below $1.5600 levels. It made an intraday high at 1.5631 and low at 1.5540 levels. Pair is currently trading at 1.5589 levels. Sterling fell to an intraday low against the dollar on Tuesday after data showed British consumer prices inched up 0.1 percent in May, disappointing some expecting a better pick-up in inflation. Sterling fell to $1.5567 after the data, from $1.5613 before its release. Against the euro, it traded flat at 72.36 pence. Initial support is seen at 1.5486 and resistance is seen around 1.5689 levels.USD/CHF is supported above 0.9300 levels and trading at 0.9307 levels and made intraday low at 0.9270 and high at 0.9325 levels. Today no major data is expecting from the Switzerland. Near term support is seen at 0.9242 levels and resistance is seen at 0.9372 levels. Option expiry is at 0.9350 (260M).AUD/USD is supported just above 0.7700 levels and trading at 0.7738 levels. It has made intraday high at 0.7779 levels and low at 0.7720 levels. The Reserve Bank of Australia gave few clues on future rate decisions in the release of minutes from its June 2 meeting, but suggested that the high level of the Australian dollar was continuing to dampen economic growth. The RBA refrained from giving an explicit easing bias in the minutes, instead saying that the bank was assessing information on economic and financial conditions. Initial support is seen at 0.7568 and resistance at 0.7811 levels. Option expiries are at 0.7680 (562M), 0.7720 (522M), 0.7800 (336M), 0.7825 (512M).NZDUSD is supported below 0.7000 levels and currently trading at 0.6979. It has made intraday high at 0.7008 and low at 0.6970 levels. The pair has moved along sideways of the downtrend that occurred when the RBNZ recently surprised markets and cut the OCR last week. Today was data free session for New Zealand, market will eye on NZD Current Account data due on tomorrow. Initial support is seen at 0.6946 and resistance is seen around 0.7055 levels.
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