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Talking Points
- US Dollar Aims Higher as S&P 500 Stock Index Futures Point to Risk Aversion
- Greek Government Impasse Overshadows China’s Weekend Interest Rate Cut
- Eurozone Finance Ministers’ Meeting, Italian and Spanish Debt Sales Key Ahead
The US Dollar pushed higher to start the trading week as stocks fell in overnight trade, driving demand for the go-to haven currency. The MSCI Asia Pacific regional benchmark equity index fell 0.6 percent as Greek lawmakers failed to come up with an agreement on a ruling coalition at meeting over the weekend. Traders are concerned that a lingering impasse will push Athens to fall short of its obligations under the terms of the EU/IMF bailout, paving the way for Greece’s ejection from the Eurozone and possibly even the overall EU.
This would be an unprecedented development with effectively unpredictable practical implications for financial markets, fueling a broadly defensive tone and overshadowing risk-supportive news of a Chinese rate cut. Beijing announced over the weekend that reserve requirement ratios (RRRs) will be cut 50bps to 20 percent effective May 18. The move could have been expected to boost risk appetite and drive stocks-linked currencies higher on hopes of better-supported growth in the world’s second-largest economy were it not for Greek-related headwinds.
Looking ahead, S&P 500stock index futures are pointing sharply lower, hinting risk aversion is likely to continue driving the greenback higher against most of its leading counterparts. The spotlight is on a meeting of Eurozone Finance Ministers in Brussels, with traders on the lookout for any clues about a possible way forward beyond the Greek stalemate. Italy and Spain are also due to issue debt, with markets keeping a close eye on average yield and bid-to-cover readings to gauge the extent to which Athens-born jitters are spilling over elsewhere.
Asia Session: What Happened
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
22:30 |
NZD |
Performance Services Index (APR) |
56.7 |
- |
54.2 (R+) |
|
22:45 |
NZD |
Retail Sales Ex Inflation (QoQ) (1Q) |
-1.5% |
-0.5% |
1.8% (R-) |
|
23:50 |
JPY |
Loans & Discounts Corp (YoY) |
-0.4% |
- |
0.2% |
|
23:50 |
JPY |
Domestic CGPI (MoM) (APR) |
0.3% |
0.1% |
0.5% (R-) |
|
23:50 |
JPY |
Domestic CGPI (YoY) (APR) |
-0.2% |
-0.3% |
0.5% (R-) |
|
1:30 |
AUD |
Owner-Occup. Value of Loans (MoM) (MAR) |
-0.3% |
- |
-4.1% (R-) |
|
1:30 |
AUD |
Home Loans (MoM) (MAR) |
0.3% |
-2.0% |
-2.5% |
|
1:30 |
AUD |
Investment Lending (MAR) |
-1.0% |
- |
4.3% (R-) |
Euro Session: What to Expect
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
6:00 |
EUR |
German Wholesale Price Index (MoM) (APR) |
- |
0.9% |
Low |
|
6:00 |
EUR |
German Wholesale Price Index (YoY) (APR) |
- |
2.2% |
Low |
|
6:45 |
EUR |
France Current Account (€) (MAR) |
- |
-5.3B |
Low |
|
7:15 |
CHF |
Producer & Import Prices (MoM) (APR) |
0.2% |
0.3% |
Low |
|
7:15 |
CHF |
Producer & Import Prices (YoY) (APR) |
-2.1% |
-2.0% |
Low |
|
8:00 |
EUR |
Italian CPI (NIC incl. tobacco) (MoM) (APR F) |
0.5% |
0.5% |
Low |
|
8:00 |
EUR |
Italian CPI (NIC incl. tobacco) (YoY) (APR F) |
3.3% |
3.3% |
Low |
|
8:00 |
EUR |
Italian CPI – EU Harmonized (MoM) (APR F) |
0.9% |
0.9% |
Low |
|
8:00 |
EUR |
Italian CPI – EU Harmonized (YoY) (APR F) |
3.8% |
3.8% |
Low |
|
8:30 |
EUR |
Spain to Sell 364-518 Day Bills |
- |
- |
Medium |
|
8:30 |
EUR |
Italian General Government Debt (€) (MAR) |
- |
1928.2B |
Medium |
|
9:00 |
EUR |
Italy to Sell 2015-2025 Bonds |
- |
- |
Medium |
|
9:00 |
EUR |
Euro-Zone Industrial Production (YoY) (MAR) |
-1.4% |
-1.8% |
Medium |
|
9:00 |
EUR |
Euro-Zone Industrial Production (MoM) (MAR) |
0.4% |
0.5% |
Medium |
|
15:00 |
EUR |
Euro Zone Finance Ministers Meet in Brussels |
- |
- |
High |
Critical Levels
|
CCY |
SUPPORT |
RESISTANCE |
|
EURUSD |
1.2821 |
1.2948 |
|
GBPUSD |
1.6003 |
1.6128 |
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak
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