Talking Points:
- Yen falls, commodity-bloc FX gains as risk appetite recovers overnight
- New Zealand Dollar outperforms on fading RBNZ rate cut speculation
- G7 officials’ comments may help sentiment rebound into the week-end
The Japanese Yen underperformed in overnight trade as stocks advanced, weighing on the anti-risk currency. Not surprisingly, the sentiment-linked Australian and New Zealand Dollars traded higher alongside share prices.
The Kiwi outperformed as the island nation’s front-end bond yields pushed upward, hinting at ebbing RBNZ rate cut speculation. Indeed, a gauge of the priced-in 12-month outlook implied in OIS rates has moved to the least dovish in four months.
The overall risk appetite recovery likely reflects corrective flows after yesterday’s Fed-inspired selloff. Fears of imminent stimulus withdrawal swelled as traders digested unmistakably hawkish rhetoric within minutes from April’s FOMC meeting, pushing the MSCI Asia Pacific regional benchmark equity index to a monthly low.
Stock index futures are trading notably higher ahead of the opening bell in Europe, hinting the risk-on mood is aiming to carry through into the week-end. Sideline comments from a meeting of G7 finance ministers and central bank governors may help if officials hint at on-coming fiscal measures to boost sagging global growth as monetary efforts appear increasingly stretched.
What does retail traders’ buying and selling say about market trends? Find out here !
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:45 | NZD | Net Migration SA (APR) | 5520 | - | 5330 |
| 3:00 | NZD | Credit Card Spending (MoM) (APR) | 2.5% | - | -1.4% |
| 3:00 | NZD | Credit Card Spending (YoY) (APR) | 9.1% | - | 4.8% |
| 5:00 | JPY | Nationwide Dept Sales (YoY) (APR) | -3.8% | - | -2.9% |
| 5:00 | JPY | Tokyo Dept Store Sales (YoY) (APR) | -1.5% | - | -1.1% |
European Session
| GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
|---|---|---|---|---|---|
| 6:00 | EUR | German PPI (MoM) (APR) | 0.1% (A) | 0.0% | Medium |
| 6:00 | EUR | German PPI (YoY) (APR) | -3.1% (A) | -3.1% | Medium |
| 7:00 | JPY | Convenience Store Sales (YoY) (APR) | - | -0.1% | Low |
| 8:00 | EUR | ECB Current Account SA (MAR) | - | 19.0b | Low |
| 8:00 | EUR | ECB Current Account NSA (MAR) | - | 11.1b | Low |
| 10:00 | GBP | CBI Trends Total Orders (MAY) | -13 | -11 | Low |
| 10:00 | GBP | CBI Trends Selling Prices (MAY) | - | 4 | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1104 | 1.1154 | 1.1179 | 1.1204 | 1.1229 | 1.1254 | 1.1304 |
| GBP/USD | 1.4410 | 1.4511 | 1.4561 | 1.4612 | 1.4662 | 1.4713 | 1.4814 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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