EUROPEAN session review: chineese data still have impact on market

Data released (actual, consensus, previous):                 

05:45 GMT Switzerland Unemployment Rate s.a (MoM) (May) 3.2%    3.2%    3.1%         

07:15 GMT Switzerland Real Retail Sales (YoY) (Apr)  3.3%    2.4%    -0.8%        

08:30 GMT EMU Sentix Investor Confidence (Jun)  -11.6    -10.0    -15.6   

Trades remain very quiet on Monday. The Japanese yen slipped Monday, a day ahead of a central-bank decision, while lackluster Chinese economic data pushed the Australian dollar lower as well. 

Experts of Societe Generale notes that Chinese data over the weekend was disappointing. Soft domestic demand, weak trade, no inflationary pressure. Q2 will see GDP growth slow. Wei Lao's commentary is becoming very downbeat, verging on downright scary. Simply bad news for commodity markets and commodity-related currencies.

EURO:

Data out the EMU showed Eurozone Sentix Investor Confidence rose to -11.6 in June, from -15.6 in May. Analysts expected slightly more increase to -10. 

EUR/USD holds around $1.3200 and now losses may widen to $1.3108 (MA100d) ahead of $1.3075 (low Jun 6) and then $1.3053 (low Jun.5).     Initial resistance comes at $1.3230 (Asian highs), then - at $1.3300, tested Thursday.  A breakout of $1.3319 (high Feb.25) would open the door to $1.3343 (61.8% of Feb-Apr slide).  

POUND:

The pound compensated earlier losses. Sterling has appreciated 5.2% in the past three months, while the dollar gained 0.9% and the euro rose 2.4%. 

GBP/USD consolidates within the 50-points range with initial resistance on $1.5560/70, stronger - at Thursday’s high on $1.5680, extending to $1.5700. Break under $1.5500 targets $1.5420 (38.2% Fibo of the $1.5000 - $1.5680 rise) and $1.5370 (Jun 3 high).

YEN:

The yen’s losses came as the Bank of Japan kicked off its two-day meeting in Tokyo, with investors waiting to see whether the central bank would offer any further easing moves after standing pat at its previous gathering in late May. 

Japan posted a larger-than-expected current-account surplus of ¥750 billion ($735 billion) for April, compared with expectations for a ¥310 billion surplus. Separately, Japan revised its growth data for the January-to-March period to 4.1% in annualized terms, higher than the 3.5% growth initially reported. 

USD/JPY recovered more then 300 points from Friday’s lows near Y95.00. Currently the rate challenge 38.2% Fibo of the Y103.80 - Y95.00 decline) with a break above targets Y99.35/40 (50%) and Y100.40 (61.8% and Jun 4 highs). Initial support is near Y97.70 (Asian lows). Below dollar may retreat to Y95.50 (Thursday’s lows) and Y95.00/95 (Friday’s lows).

DATA AHEAD:

UK RICS Housing Price Balance (May) will end the day’s data at 23:01GMT.

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