Talking Points
- Spain Secures €100 Billion EU Bailout to Recapitalize Banking Sector
- Chinese Exports Unexpectedly Accelerate, Denting Slowdown Fears
- Dollar, Yen Vulnerable as S&P 500 Futures Point to Risk-On Mood
The US Dollar and Japanese Yen began the week sharply lower amid a broad-based recovery in risk appetite that sapped demand for the go-to haven currencies. The MSCI Asia Pacific regional benchmark equity index rose 1.9 percent, lifted by news that Spain successfully lobbied for a €100 billion EU aid package to recapitalize its banking sector.
The announcement downgrades the possibility of a credit squeeze in the event that a Spanish lender folded. The apparent absence of added austerity measures attached to the terms of the bailout reinforced the risk-on mood, hinting it will not compound Spain’s already deep recession and contribute to Eurozone-linked headwinds battering global output at large.
A supportive set of Chinese Trade Balance figures likewise amplified chipper sentiment trends, showing exports grew at the fastest pace in three months. The outcome hinted that the world’s second-largest economy and its top exporter may not be facing as deep of a demand slump as has been feared at the hands of the Eurozone recession.
Looking ahead, S&P 500 stock index futures are pointing firmly higher, hinting haven currencies will likely remain under pressure against their major counterparts. The economic calendar is relatively uneventful in Europe and empty in US hours, suggesting that little stands to disrupt established momentum in the near term (at least as far as scheduled event risk is concerned).
Asia Session: What Happened
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
6/9 1:30 |
CNY |
Consumer Price Index (YoY) (MAY) |
3.0% |
3.2% |
3.4% |
6/9 1:30 |
CNY |
Producer Price Index (YoY) (MAY) |
-1.4% |
-1.1% |
-0.7% |
6/9 5:00 |
CNY |
Industrial Production YTD (YoY) (MAY) |
10.7% |
10.8% |
11.0% |
6/9 5:00 |
CNY |
Industrial Production (YoY) (MAY) |
9.6% |
9.8% |
9.3% |
6/9 5:00 |
CNY |
Fixed Assets Inv Excl Rural YTD (YoY) (MAY) |
20.1% |
20.0% |
20.2% |
6/9 5:00 |
CNY |
Retail Sales YTD (YoY) (MAY) |
14.5% |
14.6% |
14.7% |
6/9 5:00 |
CNY |
Retail Sales (YoY) (MAY) |
13.8% |
14.2% |
14.1% |
2:55 |
CNY |
Exports (YoY) (MAY) |
15.3% |
7.1% |
4.9% |
2:55 |
CNY |
Imports (YoY) (MAY) |
12.7% |
5.5% |
0.3% |
3:00 |
CNY |
Trade Balance ($) (MAY) |
18.70B |
16.25B |
18.43B |
22:45 |
Manufacturing Activity (1Q) |
-1.8% |
- |
0.9% (R-) |
|
22:45 |
NZD |
Manufacturing Activity Volume s.a. (QoQ) (1Q) |
0.7% |
- |
1.3% |
23:01 |
Lloyds Employment Confidence (MAY) |
-59 |
- |
-59 |
|
23:50 |
JPY |
BSI Large All Industry (QoQ) (2Q) |
-3.1 |
- |
-2.7 |
23:50 |
JPY |
BSI Large Manufacturing (QoQ) (2Q) |
-5.7 |
- |
-7.3 |
23:50 |
JPY |
Japan Money Stock M2 (YoY) (MAY) |
2.1% |
2.5% |
2.6% |
23:50 |
JPY |
Japan Money Stock M3 (YoY) (MAY) |
1.9% |
2.2% |
2.3% |
5:00 |
JPY |
Consumer Confidence (MAY) |
40.7 |
39.8 |
40.0 |
6:00 |
JPY |
Machine Tool Orders (YoY) (MAY P) |
-2.9% |
- |
0.4% |
Euro Session: What to Expect
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
6:45 |
French Industrial Production (YoY) |
-0.3% |
-0.9% |
Low |
|
6:45 |
EUR |
French Manufacturing Production (YoY) |
-0.9% |
-0.3% |
Low |
6:45 |
EUR |
French Manufacturing Production (MoM) |
-0.7% |
1.4% |
Low |
6:45 |
EUR |
French Industrial Production (MoM) |
-0.1% |
-0.9% |
Low |
8:00 |
EUR |
Italian Gross Domestic Product (QoQ) |
-0.8% |
-0.8% |
Low |
8:00 |
EUR |
Italian Gross Domestic Product (YoY) |
-1.3% |
-1.3% |
Low |
9:30 |
EUR |
Germany to Sell €4B in 6-mo Bills |
- |
- |
Median |
13:00 |
EUR |
France to Sell €7.8B in 91-, 168- and 350-day Bills |
Critical Levels
CCY |
SUPPORT |
RESISTANCE |
1.2444 |
1.2787 |
|
1.5406 |
1.5605 |
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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