Market Roundup
- US ISM Mfg Prices Paid May 49.5, (consensus 42.5, previous 40.5)
- US ISM Mfg Employment Idx May 51.7, (consensus 49.2, previous 48.3)
- US PCE Price Index MM Apr 0%, (previous 0.20%), weak PCE moves USD lower pre-ISM
- US Construction Spending MM Apr 2.2%, (consensus 0.7%, previous 0.50%)
- BCB Poll Brazil '15 inflation (consensus 8.39% v previous 8.37%), '15 growth-1.27 v -1.24%
- Atlanta Fed's GDPNow sees US econ on track to grow 0.8% after Apr cons spending
- Fed's Rosengren (dove) conditions for Fed rate hike not yet met
- Fed's Fischer main place we look for potential problems is real estate, but don't see crisis on horizon
- Fed's Fischer want to go back to holding only Tsy securities on Fed balance sheet
- UK govt will push benefits of staying in EU if happy with reform-Hammond
- Italy's Padoan Grexit would be a reason to accelerate EZ integration
Economic Data Ahead
- (1845 ET/ 2245 GMT) NewZealand Terms of Trade QQ Q1 (consensus 1.7%, previous -1.9%)
- (1845 ET/ 2245 GMT) NewZealand Terms of Trade - Exp Volume Q1 (consensus 2.4%, previous 1.5%)
- (1845 ET/ 2245 GMT) NewZealand Terms of Trade - Imports Q1 (consensus -4.5%, previous 0.2%)
- (1845 ET/ 2245 GMT) NewZealand Terms of Trade - Exports Q1 (consensus -3.1%, previous -1.8%)
- (2130 ET/ 0130 GMT) Australia Current Account Deficit Q1 (consensus 10.80b, previous 9.60b)
- (2130 ET/ 0130 GMT) Australia Net Exports Contribution Q1 (consensus 0%, previous 0.7%)
Key Events Ahead
- (0030 ET/ 0430 GMT) Australia RBA Cash Rate Jun (consensus 2%, previous 2%)
FX Recap
EUR/USD fell to daily lows near 1.0880 earlier in the day as mounting concerns surrounding Greece kept undermining any bullish attempt. EU officials categorically denied rumours on an imminent EU-Greece deal in the European afternoon. The pair subsequently pared loses and has regained the 1.0900 handle and is currently trading at 1.0931, down 0.51% on the day. Next support lies at 1.0867 (low May 28) ahead of 1.0819 (low May 27) and finally 1.0800 (psychological level). Resistances are seen at 1.0990 (high Jun 1), 1.1002 (10-D MA) and 1.1010 (high May 25). Option expiries for Tuesday 02 June: 1.0900 (745M), 1.0980 (682M), 1.1000 (1BLN)
USD/JPY is on track to post the highest close since 2002. The pair pierced the psychological barrier on an intraday basis and is currently trading at 124.80 with low of 123.84. The pair is extending last week's 123.40 / 124/40 range to aforementioned highs, basing on the 124 handle. Moves to the upside are dubious having moved on little substance. 125.00 could be a strong resistance level to break and to hold above. US Payrolls and PMIs coming up this week will be in focus for further direction. Option expiries for Tuesday 02 June: 124.00 (550M)
AUD/JPY unable to rise despite the rally of USD/JPY to fresh multi-year highs. Last Thursday the pair bottomed at 94.57, the lowest level in two weeks. Recovery attempts have remained limited, and the pair continues to move sideways, consolidating around last week lows. AUD/JPY currently trades at 94.94, with support at 94.60 and resistance below 95.20. Market awaits RBA decision Tuesday at 04:30 GMT. Rates are expected to remain on hold. The statement will likely impact on AUD crosses.
USD/MXN: Mexican peso is falling against the US dollar for the sixth day in a row. The pair hit 15.000 for the first time in a month. USD/MXN recently climbed to 15.513, hitting the strongest level since early May, then pulled back as it found resistance around 15.500 and it was trading at 15.498, up 0.75% for the day. Banxico will meet to decide on interest rates on Thursday and is expected to remain on hold at 3.0%.
EUR/AUD is testing the upside with 1.4440 on the horizon and a break there puts 1.48 in play. The pair is currently trading at 1.4368 with a high of 1.4393 and a low of 1.4240. On going Grexit scenario and tonight's RBA meeting key risks to the pair. EU delegates Mario Draghi, along with IMF chief Christine Lagarde and leaders of Germany, France, and the European Commission meet in Berlin to dicuss Greece. Meanwhile, the RBA will meet and is expected to maintain the policy rate at 2.00%, the tone will be key.
