Global Markets:
- Asian stock markets: Nikkei up 0.05 %, Shanghai Composite gained 1.65 %, Hang Seng rose 1.50 %, ASX 0.90 % higher
- Commodities: Gold at $1205 (+0.02 %), Silver at $17.05 (+0.02 %), WTI Oil at $59.78 (+0.10 %), Brent oil at $65.48 (-0.60 %)
- Rates: US 10 year yield at 2.193, UK 10 year yield at 1.941, German 10 year yield at 0.608
News & Data:
- New Zealand Trade Balance -NZ$2.62bln y/y, Expected: -NZ$2.79bln, Previous: -NZ$2.41bln
- New Zealand Trade Balance NZ$123mln m/m, Expected: NZ$100mln, Previous: NZ$754mln
- New Zealand Exports NZ$4.17bln, Expected: NZ$4.20bln, Previous: NZ$4.92bln
- New Zealand Imports NZ$4.04bln, Expected: NZ$4.10bln, Previous: N$4.16bln
- Singapore GDP 3.2 % q/q, Expected: 1.8 %, Previous: 1.1 %
- Singapore GDP 2.6 % y/y, Expected: 2.2 %, Previous: 2.1 %
- Yen’s Resilience Causes Investors to Shift Bets – WSJ
- Asian shares turn higher as China rallies, dollar up – RTRS
- Fed's Fischer: Too much weight placed on Fed's first rate hike – RTRS
- Fed’s Mester Says ‘Time Is Near’ for U.S. Interest-Rate Increase – BBG
Markets Update:
The US Dollar extended gains overnight, still inspired by the higher inflation data last week and the Yellen speech on late Friday. Stops were taken out below 1.0950 in EUR/USD and the pair remains under significant pressure. Selling interest reported at 1.10 and 1.1050 with stops from short-term specs laying above. Meanwhile, GBP/USD has nearly retraced all of the post-election gains and is slowly approaching towards the 1.54 level. A clear break below would then pave the way for a 1.51 test. However, we have some significant data releases out of the UK this week, including the GDP release on Friday morning.
USD/JPY is gaining momentum after its breakout last week and is heading towards the 122 level. Dealers report that there is a barrier option at that level and option-related supply ahead of it. However, it is unlikely to be a major obstacle and a breakout seems imminent. The commodity currencies remain weak overall, but have performed well overnight. Dealers note solid AUD & NZD demand in the cross pairs, especially EUR/AUD and EUR/NZD, which both fell already 150 pips since the Sunday open.
Upcoming Events:
- 13:30 BST – US Core Durable Goods Orders
- 13:30 BST – US Durable Goods Orders
- 13:55 BST – US Redbook
- 14:00 BST – US House Price Index
- 14:45 BST – US Services PMI
- 15:00 BST – US New Home Sales
- 15:00 BST – US Richmond Manufacturing Index
- 17:30 BST – FOMC Member Stanley Fischer speaks
