Talking Points:
- Yen gains, commodity-bloc FX drops amid risk aversion in Asian trade
- Australian Dollar underperforms after disappointing labor-market data
- US Dollar may extend advance as Fed-speak boosts June rate hike bets
The anti-risk Japanese Yen outperformed while sentiment-linked commodity bloc currencies faced selling pressure as risk aversion swept financial markets in Asian trading hours. The dour mood appeared to reflect follow-on momentum after a drop Wall Street triggered by hawkish rhetoric within minutes from April’s FOMC meeting (as expected). The Australian Dollar suffered outsized losses in the wake of disappointing labor-market figures.
Looking ahead, a lull in high-profile event risk offers markets space for consolidation as investors digest yesterday’s volatility surge. Another round of Fed-speak may break the quiet however as Fed policy speculation heats up anew. Comments from Fed Vice Chair Stanley Fischer and Bill Dudley, the President of the central bank’s New York branch, are due to cross the wires.
Fischer and Dudley represent the central core of the rate-setting FOMC committee, suggesting their views are likely to match the majority consensus. If their tone matches the hawkish lean on display in the Minutes document, the US Dollar is likely to continue higher and another round of risk aversion may strike the broader markets. As it stands, the priced-in probability of a rate increase in June has surged to 34 percent from just 4 percent at the start of the week.
Check out the latest standings for the FXCM $10k trading contest HERE.
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:00 | NZD | ANZ Job Advertisements (MoM) (APR) | 1.7% | - | 3.1% |
| 23:50 | JPY | Housing Loans (YoY) (1Q) | 1.9% | - | 2.2% |
| 23:50 | JPY | Machine Orders (MoM) (MAR) | 5.5% | -2.0% | -9.2% |
| 23:50 | JPY | Machine Orders (YoY) (MAR) | 3.2% | 0.8% | -0.7% |
| 01:00 | NZD | ANZ Consumer Confidence Index (MAY) | 116.2 | - | 120.0 |
| 01:00 | NZD | ANZ Consumer Confidence (MoM) (MAY) | -3.2% | - | 1.7% |
| 01:30 | AUD | Employment Change (APR) | -10.8k | 12.0k | 25.7k |
| 01:30 | AUD | Unemployment Rate (APR) | 5.7% | 5.8% | 5.7% |
| 01:30 | AUD | Full Time Employment Change (APR) | -9.3k | - | -10.0k |
| 01:30 | AUD | Part Time Employment Change (APR) | 20.2k | - | 35.7k |
| 01:30 | AUD | Participation Rate (APR) | 64.8 | 64.9% | 64.9% |
| 01:30 | AUD | RBA FX Transactions Government (APR) | -991m | - | -978m |
| 01:30 | AUD | RBA FX Transactions Market (APR) | 946m | - | 954m |
| 01:30 | AUD | RBA FX Transactions Other (APR) | 68m | - | 44m |
| 01:45 | CNY | MNI Business Indicator (MAY) | 50.0 | 50.5 | |
| 04:30 | JPY | All Industry Activity Index (MoM) (MAR) | - | 0.7% | -1.2% |
| 06:00 | JPY | Machine Tool Orders (YoY) (APR F) | - | - | -26.4% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| - | - | G7 FinMins, Central Bank Governors Meet | - | - | Medium |
| 08:00 | EUR | ECB Current Account SA (MAR) | - | 19.0b | Low |
| 08:00 | EUR | Current Account NSA (MAR) | - | 11.1b | Low |
| 08:30 | GBP | Retail Sales Ex Auto Fuel (MoM) (APR) | 0.6% | -1.6% | Medium |
| 08:30 | GBP | Retail Sales Ex Auto Fuel (YoY) (APR) | 2.0% | 1.8% | Medium |
| 08:30 | GBP | Retail Sales Inc Auto Fuel (MoM) (APR) | 0.6% | -1.3% | Medium |
| 08:30 | GBP | Retail Sales Inc Auto Fuel (YoY) (APR) | 2.5% | 2.7% | Medium |
| 09:00 | EUR | Eurozone Construction Output (MoM) (MAR) | - | -1.1% | Low |
| 09:00 | EUR | Eurozone Construction Output (YoY) (MAR) | - | 2.5% | Low |
| 11:30 | EUR | ECB Account of April Policy Meeting | - | - | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1045 | 1.1147 | 1.1181 | 1.1249 | 1.1283 | 1.1351 | 1.1453 |
| GBP/USD | 1.4084 | 1.4315 | 1.4457 | 1.4546 | 1.4688 | 1.4777 | 1.5008 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
