EUROPEAN session review: central banks didn’t surprised the markets

Data released (actual, consensus, previous):                 

07:00 GMT Halifax House Prices (3m/YoY) (May)    2.6%    2.5%    2.0%         

07:00 GMT Halifax House Prices (MoM) (May)    0.4%    0.2%    1.1%         

07:15 GMT Consumer Price Index (YoY) (May)    -0.5%    -0.6%    -0.6%         

07:15 GMT Consumer Price Index (MoM) (May)    0.1%    0.1%    0.0%      

10:00 GMT German Apr Factory Orders -0.4     -0.2     -0.4 

11:00 GMT BoE Asset Purchase Facility £375B      £375B      £375B 

11:00 GMT BoE nterest Rate Decision 0.5%     0.5%    0.5% 

11:45 GMT ECB Interest Rate Decision 0.5%     0.5%    0.5%

The euro climbed to the highest level in almost a month versus the dollar after ECB rate was unchanged at 0.5% as expected. 

Europe’s shared currency rose against all but two of its 16 major counterparts. ECB President Mario Draghi is due to give a press conference in Frankfurt after the central bank announces its decision.

EURO:

The euro keeps positive mood amid speculation the European Central Bank will refrain from cutting its main interest rate today. 

Morgan Stanley & Co. and IHS Global Insight are the only institutions to predict a quarter-point reduction. 

Germany Factory Orders were a bit worse then it was forecasted but it had no impact on euro. 

EUR/USD has pierced Monday’s high at $1.3110 (initial resistance) and trades at $1.3120. Break above will target  $1.3140 (Apr 11 high) and then - $1.3200. Below yesterday’s lows on $1.3040 support comes at $1.2980 and then - near $1.2945. Below losses may widen to $1.2900.

POUND:

The pound strengthened versus the greenback after the Bank of England released its latest policy decision at noon in London. As it was expected rates stayed unchange at 0.5% as well as BoE Asset Purchase Facility (£375B). Halifax House Prices (3m/YoY) (May) added 2.6% vs  2.0% in April. 

GBP/USD still keeps positive mood. Above May 10 high $1.5455 resistance comes at $1.5470/80 (upper Bollinger). Below $1.5380 and Tuesday’s lows on $1.5270 support comes at $1.5200.

YEN:

The yen retaines its gains versus the dollar and euro as Japanese stocks slumped after Prime Minister Shinzo Abe failed to provide additional detail on stimulus measures, boosting demand for safer assets. For first time in two months Nikkei 225 closed below 13,000. 

USD/JPY fell to Y98.85 (Monday’s lows). Below support comes at  Y98.20 (channel line). Initial resistance comes at yesterday’s high on Y100.40, then - at Y101.00 (channel line from May 22). Above bulls may target Y101.80 (May 30 high).

DATA AHEAD:

The ECB Monetary policy statement and press conference will be digested at 12:30 GMT. 

The same time US release Initial Jobless Claims for the May 31 week.

Link>>