Quick Recap
The scaffolding around the Euro’s rally fell away last night as a combination of news that the ECB will front load its QE before the summer holidays, a massive leap in US housing starts which surged by 20.2% in April to a seasonally adjusted pace of 1.14 million units — the highest since November 2007 — and building permit data certainly didn’t help the Euro or US bonds either.
But it’s the US dollars move which has really pushed markets to break recent complaceny.
Crude broke the level we’ve been watching and sank more than 3.5%, gold dropped $17, the Aussie is back near 79 cents, and copper fell out of bed as well.
So it’s an incredibly interesting night of moves. Hopefully those who read this note and my afternoon Asian wrap had a chance to participate.
On the day
On the data front today we get the release of Westpac’s Monthly Consumer Sentiment survey. But before that Japanese GDP stands as a test for forex traders and Abenomics. EU PPI tonight and the release of the BoE MPC vote cut is important in Europe this evening. Tomorrow morning at 4am we get the FOMC minutes. They’ll be poured over for signs of the if and when of the Fed’s first rate hike.
Here’s the overnight scoreboard (8.55am AEST):
- Dow Jones up 0.07% to 18,312
- Nasdaq down 0.17% to 5,070
- S&P 500 down 0.06% 2,127
- London (FTSE 100) up 0.38% to 6,995
- Frankfurt (DAX) up 2.23% to 11,853
- Paris (CAC) up 2.09% to 5,117
- Tokyo (Nikkei) up 0.68% to 20,026
- Shanghai (composite) up 3.15% to 4,418
- Hong Kong (Hang Seng) up 0.37% to 27,693
- ASX Futures Overnight (SPI June) +2 to 5,622
- US 10 Year Bond +0.05% to 2.29%
- Australian 10 year bond +0.04% to 3.00%
- AUDUSD: 0.7915
- EURUSD: 1.1142
- USDJPY: 120.68
- GBPUSD: 1.5506
- USDCAD: 1.2228
- Crude: $57.26
- Gold: $1,207
- Dalian Iron Ore (September): 415.5
CHART OF THE DAY: AUDUSD
The Aussie has broken support and could now head substantially lower. Could be another 100 points in this.
Euro – taken out on the fall last night through 1.1255
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