Fx
Asian Market Update
Japan stocks rebound from overnight collapse as yen-sellers resurface
Economic Data
(NZ) NEW ZEALAND APR TRADE BALANCE (NZ$): 157M V 515ME (3-month low); EXPORTS: 3.95B V 4.06BE; IMPORTS: 3.80B V 3.60BE
(PH) PHILIPPINES MAR TRADE BALANCE: -$593M V -$967M PRIOR; TOTAL IMPORTS: $4.9B V $4.7B PRIOR; TOTAL IMPORTS: -8.4% V -5.8% Y/Y
Markets Snapshot (as of 02:30 GMT)
Nikkei225 +2.9%
S&P/ASX -1.3%
Kospi +0.1%
Shanghai Composite +0.3%
Hang Seng flat
Jun S&P500 +0.2% at 1,653
Jun gold +0.1% at $1,393/oz
Jul crude oil flat at $94.25/brl
Observations/Insights
Outsized losses in Tokyo equities are being corrected in the final session of the week as traders swooped in to put a floor under the free-fall in the yen pairs overnight. Yen selling has returned amid the ...
St Louis Fed President, James Bullard, a supposed hawk, has been bullying the 'single' currency bears into temporary submission ahead of today's FOMC meeting minutes or at least he should be held responsible for getting the ball rolling. Yesterday, he suggested that the most appropriate policy for the Fed is to continue the current QE3 policy. Dovish comments from the voting hawk has put the 'mighty' dollar under pressure when the market least expected it when he mentioned adjusting the pace of purchases in view of incoming data on economic performance, employment and inflation.
The only thing that Mr. Bullard purposely refused to acknowledge yesterday was when the Fed might be tapering off its purchases. Bullard went on to say that like Japan, Europe risks an "extended period of low ...
European Market Update
UK retail sales data comes in negative and well expectations; markets ahead Bernanke testimony for hints of QE tapering
Notes/Observations
Bank of Japan (BoJ) leaves policy unchanged (as expected). Upgrades economic outlook for 5th straight month
Japan Apr trade deficit worse than expected but smallest deficit in three months
Australia consumer confidence sees biggest drop in 17 months
USD corrects from recent strength as markets might have gotten ahead of itself on the debate over tapering of QE
UK retail sales come in negative and below expectations; cold weather blamed
Economic Data
(HU) Hungary Mar Avg Gross Wages Y/Y: 3.2% v 3.0%e
(DK) Denmark May Consumer Confidence: -2.6 v -2.5e
(EU) ECB: €206M borrowed in overnight loan facility vs. €190M prior; € ...
Fundamental Analysis
EUR
"The financial markets appear to have survived the government debt crisis, but the leading economic indicators have recently declined."
- Joerg Kraemer, Chief Economist at Commerzbank AG
Producer prices in Europe’s largest economy slowed for the third consecutive month in April, suggesting weak domestic demand and raising concerns that the economy is far away from the recovery. The measure of producer prices for industrial products inched up only 0.1% from the corresponding month of the prior year.
Read more: FULL REPORT - Fundamental Analysis
Technical Analysis
EUR/USD
"Bernanke isn’t hawkish, so I think he’s more likely to continue monetary easing. The market will probably respond with dollar-selling to Bernanke’s remarks."
- Gaitame.com Research Institute ...
Morning Briefing : Eyeing the US dollar ahead of key events today
What's new :
Asia: Equity indices mixed this morning
Japan: BoJ left rates unchanged in line with expectations
Forex: Aussie and Kiwi continue to tumble
Overnight rates and Indices:
EUR/USD 1.2903 1.2939 0.16 %
USD/CHF 0.9681 0.9715 0.07 %
GBP/USD 1.5138 1.5174 -0.04 %
USD/JPY 102.35 102.74 -0.11 %
EUR/CHF 1.2515 1.25426 -0.07 %
EUR/JPY 132.22 132.69 -0.28 %
Dow Jones 15325.68 15434.50 0.34 %
Nasdaq 3011.51 3036.71 0.18 %
S&P 500 1662.67 1674.93 0.17 %
Nikkei 225 15432.64 15706.63 1.60 %
Shanghai 2292.43 2314.18 -0.18 %
Gold spot 1372.47 1389.16 0.78 %
Crude Oil 95.51 95.97 -0.27 %
Comments:
All eyes on the ...
Asian Market Update
Yen steady, JGB yields higher after BOJ maintained its policy stance without a mention of higher rates risk
Economic Data
(JP) BANK OF JAPAN (BOJ) REITERATES POLICY STANCE: TO INCREASE MONETARY BASE AT ANNUAL PACE OF ¥60-70T (decision unanimous); UPGRADES ECONOMIC ASSESSMENT FOR 5TH CONSECUTIVE MEETING
(JP) JAPAN APR MERCHANDISE TRADE BALANCE: -¥879.9B V -¥621BE; ADJUSTED: -¥764.4B V -¥603BE(smallest deficit in 3 months)
(AU) AUSTRALIA APR DEWR INTERNET SKILLED VACANCIES M/M: -1.3% V +0.1% PRIOR
(AU) AUSTRALIA MAY WESTPAC CONSUMER CONFIDENCE INDEX: -7.0% (biggest decline in 17 months) V -5.1% PRIOR; INDEX: 97.6 V 104.9 PRIOR
(TW) TAIWAN APR UNEMPLOYMENT RATE: 4.2% V 4.2%E
(KR) SOUTH KOREA Q1 EXTERNAL SHORT-TERM DEBT: $122.2B V $126.8B PRIOR
(US) NORTH AMERICA ...
EUR – USD
Uptrend is still intact in a triangle configuration. It should continue to rally to 1.2937 or 1.2946 if support around 1.2894 hold. After which a pullback to 1.2894 - 1.2874 zone is possible.
USD – CHF
It is a triangle configuration. Market should break either side. Acceleration should occur above 0.9726 or under 0.9678 limits.
GBP – USD
There is bearish potential for a fall to 1.5085 while 1.5181 - 1.5215 resist. After this fall a recovery up to 1.5215 or 1.5249 is expected.
USD – JPY
It may attempt a test higher to 102.69 - 102.89 after which weakness may set it to a drift down to 102.09 limit.
USD – CAD
While below 1.0275 it might drop to 1.0228 or below 1.0189 zone.
NZD – USD
Strength can extend to 0.8190 or even higher than 0.8213 as declines ...
www.sunbirdfx.com
The analysis regarding the EUR, AUD, and NZD from yesterday is relevant also for today, nothing has changed.
GBP will have some important data tomorrow (MPC meeting minutes), which can trigger the pair to break the last day's range of 1.5150-1.5330. It's very hard to predict right now what's going to happen, but I have to say that because of the trend, I prefer selling over buying. No clear trades right now.
Tonight, we should have important news regarding the JPY (BOJ press conference and monetary policy statement), for the last few months we've seen this pair jumping higher after the news release, but this time, things may differ because we've reached a 103 area; which is a strong resistance area on a monthly chart (and don't forget we've climbed from 78). I want ...
European Market Update
UK inflation comes in lower than expected and offers BOE more room to stimulate if data does disappoint
Notes/Observations
RBA minutes: rate cut appropriate to boost growth; subdues growth & inflation provided room to cut rates; AUD high by historical standards
The USD/JPY was steady after the Japanese Econ Min Amari backed off from his comments expressing satisfaction with the current value of the JPY
Germany's Chancellor Merkel said to be considering certain treaty changes aimed at giving more powers to Brussels
Draft EU law to protect insured bank depositors under €100k; larger depositors could suffer losses after equity and bond holders hit
UK inflation comes in lower than expected and offers BOE more room to stimulate if data does disappoint
Thursday ...