Asia Brief: Australia Westpac Consumer Sentiment -4.6 % vs +3.8 % previous. BoJ Deputy Gov Iwata said weak Yen by itself can't boost prices in mid-long term, company executives say stable FX is desirable and sees no problem with minus yields in BoJ operations. Iwata also said weak yen to assist exports but not as strongly as before.
Global Markets: Nikkei up 0.25 %, Shanghai Comp and ASX both lost 0.60 %&, Hang Seng dropped 1.80 %. US 10 year yield at 2.507. Gold at $1257 (+0.70 %), Silver at $19.08 (+0.80 %), Crude Oil at $92.72 (-0.05 %).
FX Overview: The Euro has been actually one of the better performers in the G10 FX space over the past few days and it hasn't lost much against the USD either this week. I think this is a sign that extreme positioning is making it difficult to push the EUR/USD lower. No doubt selling interest remains very solid, but a further squeeze up to 1.30 or 1.3020 should not be ruled out. EUR short covering in the crosses continues, with EUR/AUD shorts bailing out after the AUD/USD broke beneath the 0.92 level. The pair should run into some good resistance around 1.4207, which is the July '14 low. EUR/GBP is struggling with 0.8040 resistance, but it's quite likely we'll see a push towards 0.8080 ahead of the Scottish referendum vote. Solid bids reported from 0.80 down to 0.7980.
Cable has bounced off 1.6060 support twice now and given the uncertainty present in the market, it would not surprise me if the market goes for the topside stops for a change. I'd expect the topside to be capped around 1.62 though, as many are still eager to sell into rallies. Key intraday resistance at 1.6158, 1.6187 and then 1.6233. Larger trailing stops resting above 1.6160 and 1.6170.
USD/JPY posting fresh highs as we are heading into the EU open. The option barrier at 106.50 has been taken out, as well as some stops above. I don't think barrier structures will be much of an obstacle to the topside, at least not until we get to the big 110.00 resistance level. Bids reported at 106.20 and again into 106.00. Intraday stops through 106.15 and sub-106.00 in good size. To the topside, offers from local names at 106.80.
Looking ahead, there is not much on the econ calendar. The main event of the day will the RBNZ rate decision & statement at 21:00 GMT.
Good luck!
Global Markets: Nikkei up 0.25 %, Shanghai Comp and ASX both lost 0.60 %&, Hang Seng dropped 1.80 %. US 10 year yield at 2.507. Gold at $1257 (+0.70 %), Silver at $19.08 (+0.80 %), Crude Oil at $92.72 (-0.05 %).
FX Overview: The Euro has been actually one of the better performers in the G10 FX space over the past few days and it hasn't lost much against the USD either this week. I think this is a sign that extreme positioning is making it difficult to push the EUR/USD lower. No doubt selling interest remains very solid, but a further squeeze up to 1.30 or 1.3020 should not be ruled out. EUR short covering in the crosses continues, with EUR/AUD shorts bailing out after the AUD/USD broke beneath the 0.92 level. The pair should run into some good resistance around 1.4207, which is the July '14 low. EUR/GBP is struggling with 0.8040 resistance, but it's quite likely we'll see a push towards 0.8080 ahead of the Scottish referendum vote. Solid bids reported from 0.80 down to 0.7980.
Cable has bounced off 1.6060 support twice now and given the uncertainty present in the market, it would not surprise me if the market goes for the topside stops for a change. I'd expect the topside to be capped around 1.62 though, as many are still eager to sell into rallies. Key intraday resistance at 1.6158, 1.6187 and then 1.6233. Larger trailing stops resting above 1.6160 and 1.6170.
USD/JPY posting fresh highs as we are heading into the EU open. The option barrier at 106.50 has been taken out, as well as some stops above. I don't think barrier structures will be much of an obstacle to the topside, at least not until we get to the big 110.00 resistance level. Bids reported at 106.20 and again into 106.00. Intraday stops through 106.15 and sub-106.00 in good size. To the topside, offers from local names at 106.80.
Looking ahead, there is not much on the econ calendar. The main event of the day will the RBNZ rate decision & statement at 21:00 GMT.
Good luck!
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