Thursday 14th May: European Open Briefing

Global Markets:

  • Asian stock market: Nikkei down 0.70 %, Shanghai Composite rose 0.25 %, Hang Seng gained 0.10 %, ASX fell 0.80 %
  • Commodities: Gold at $1212.60 (-0.50 %), Silver at $17.08 (-0.80 %), WTI Oil at $60.20 (-0.50 %), Brent Oil at $67.10 (+0.30 %)
  • Rates: US 10 year yield at 2.285, UK 10 year yield at 2.023, German 10 year yield at 0.727

News & Data:

  • New Zealand Retail Sales 2.7 % q/q, Expected: 1.5 %, Previous: 1.7 %
  • New Zealand Core Retail Sales 2.9 % q/q, Expected: 1.5 %, Previous: 1.9 %
  • UK RICS House Price Balance 33.0 %, Expected: 22.0 %, Previous: 22.0 %
  • Dollar sags after weak data, bond rout resumes – RTRS
  • Oil slips, worries about world economy offset U.S. crude stocks draw – RTRS
  • Weak US retail sales dampen sharp Q2 growth rebound hopes – RTRS
  • Treasuries Fall Amid Renewed Selling in European Bonds – BBG
  • Japan Stocks Head for First Loss in Five Days as Yen Strengthens – BBG

Markets Update:

The main event overnight was the New Zealand retail sales release, which beat expectations, arriving at 2.7 % vs a median forecast of 1.5 %. This sent the Kiwi Dollar rallying, with NZD/USD gaining 0.70 % on the day. The pair reached a high of 0.7562, about 13 pips away from the May 05th high. The Aussie Dollar is also very well bid after the daily close above 0.81. The pair rallied to 0.8161 overnight and there is little tech resistance until 0.8235 now. To the downside, expect decent support at the former resistance levels at 0.8080/85 and 0.8030.

USD/JPY finally moved a bit, though we are still in the same old range. Weak US retail sales led to another round of broad USD weakness in the market and the pair was no exception. It fell to 119.03 and bids from Japanese names have kept it supported pre-119.00, but it seems just a matter of time until it breaks lower and goes for the stops below. The pivotal support area remains 119.60/65.

Looking ahead, it will likely remain quiet in the EU session with no data releases or events at all. Traders are now looking forward to the US Initial Jobless Claims and PPI data at 13:30 BST.

Upcoming Events:

  • 13:30 BST – US Initial Jobless Claims
  • 13:30 BST – US PPI
  • 13:30 BST – US Core PPI
  • 13:30 BST – Canadian Housing Price Index
  • 14:45 BST – Bloomberg US Consumer Confidence

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