Global Markets:
- Asian stock markets: Nikkei down 0.60 %, Shanghai Composite fell 0.45 %, Hang Seng declined 1.05 %
- Commodities: Gold at $1269 (-0.20 %), Silver at $17.12 (-0.60 %), WTI Oil at $46.05 (+0.50 %), Brent Oil at $48.40 (+0.50 %)
- Rates: US 10-year yield at 2.22, UK 10-year yield at 1.00, German 10-year yield at 0.26
News & Data:
- Japan Core Machinery Orders m/m -3.1 % vs 0.5 % expected
- Japan Core Machinery Orders y/y 2.7 % vs 7.3 % expected
- Japan PPI m/m 0.0 % vs 0.1 % expected
- Japan PPI y/y 2.1 % vs 2.2 % expected
- Sterling steadies as British PM scrambles after poll shock, dollar awaits Fed – RTRS
CFTC Positioning Data:
- EUR long 74K vs 73K long last week. Longs increased 1K. Largest long position since 2007
- GBP short 37K vs 30K short last week. Shorts increased by 7K
- JPY short 55K vs 52K short last week. Shorts increased by 3K.
- CHF short 17K vs 19K short last week. Shorts trimmed by 2K
- CAD short 94K vs 98K short. Shorts trimmed by 4K. Near record levels still.
- AUD square vs 3K long. Shorts trimmed 3K
- NZD short 2K vs 5K short last week. Shorts trimmed 3K
Markets Update:
Markets had a relatively quiet start into the new trading week. The Euro consolidated in a 1.1200-10 range, while GBP/USD traded between 1.2710 and 1.2770. The Pound is likely to suffer from the political uncertainty in the near-term, and selling interest on larger rallies will be high. Strong resistance is seen at 1.2820 and ahead of 1.29.
USD/JPY is slightly lower amid a decline in Asian stock markets. The pair fell from 110.45 to 110.15 in Asia. The short-term outlook is mixed. Should USD/JPY fail to break above 111 resistance soon, a retest of 109 seems likely.
AUD/USD consolidated in a 10 pips range overnight. Important support lies at 0.75. A break below would suggest that momentum is still too weak, and that a return to 0.7380 support is likely.
Overall, volatility in the FX market is likely to remain low ahead of the Fed meeting on Wednesday. The central bank is expected to increase interest rates, but the focus will be on the FOMC projections and statement. A cautious Fed could bring the Dollar under additional pressure.
Upcoming Events:
- 09:00 BST – Italian Industrial Production
- 09:30 BST – RBA Assistant Governor Debelle speaks
The Week Ahead:
Tuesday, June 13th
- 02:30 BST – Australian NAB Business Confidence
- 07:00 BST – German WPI
- 09:30 BST – UK CPI
- 10:00 BST – German ZEW Economic Sentiment
- 10:00 BST – Euro Zone ZEW Economic Sentiment
- 13:30 BST – US PPI
- 23:45 BST – New Zealand Current Account
Wednesday, June 14th
- 01:30 BST – Australian Westpac Consumer Sentiment
- 03:00 BST – Chinese Industrial Production
- 03:00 BST – Chinese Retail Sales
- 07:00 BST – German CPI
- 09:30 BST – UK Unemployment Rate
- 09:30 BST – UK Average Earnings
- 09:30 BST – UK Claimant Count Change
- 10:00 BST – Euro Zone Industrial Production
- 13:30 BST – US CPI
- 13:30 BST – US Retail Sales
- 19:00 BST – Fed Interest Rate Decision
- 19:30 BST – FOMC Press Conference
- 23:45 BST – New Zealand GDP
Thursday, June 15th
- 02:30 BST – Australian Employment Change
- 02:30 BST – Australian Unemployment Rate
- 07:45 BST – French CPI
- 08:15 BST – Swiss CPI
- 08:30 BST – SNB Rate Decision
- 08:30 BST – SNB Press Conference
- 09:00 BST – Italian CPI
- 09:30 BST – UK Retail Sales
- 10:00 BST – Euro Zone Trade Balance
- 12:00 BST – Bank of England Rate Decision
- 12:00 BST – Bank of England Meeting Minutes
- 13:30 BST – US Philadelphia Fed Manufacturing Index
- 14:15 BST – US Industrial Production
- 14:15 BST – US Manufacturing Production
- 15:00 BST – US NAHB Housing Market Index
Friday, June 16th
- 07:30 BST – Bank of Japan Press Conference
- 10:00 BST – Euro Zone CPI
- 13:30 BST – US Housing Starts
- 13:30 BST – US Building Permits
- 15:00 BST – US Michigan Consumer Sentiment
