четверг, 4 июля 2013 г.

EUROPEAN session review (04.07.2013):

Data released (actual, consensus, previous):           
01:30 GMT Australia Building Permits (YoY) (May)  -3.2%   _     28.8%    
01:30 GMT Australia Building Permits (MoM) (May)  -1.1%    -1.5%    9.5%    
07:00 GMT UK Halifax House Prices (3m/YoY) (Jun) 3.7%    3.6%    2.6%        
07:00 GMT UK Halifax House Prices (MoM) (Jun)  0.6%    0.4%    0.4%        
11:00    UK    GBP    BoE Interest Rate Decision (Jul 4)  0.5%    0.5%    0.5%        
11:00    UK    GBP    BoE Asset Purchase Facility (Jul)  £375B    £375B    £375B        
11:45    EMU    EUR    ECB Interest Rate Decision (Jul 4)     0.5%    0.5%    0.5%        
12:30    EMU    EUR    ECB Monetary policy statement and press conference

The euro fell to a five-week low against the dollar after European Central Bank President Mario Draghi made an unprecedented pledge to keep interest rates low for an extended period.


The common  currency dropped the most in almost three weeks versus the yen as Draghi said the ECB’s monetary policy stance will “remain accommodative” for as long as needed to spur growth.
 
The pound slumped the most in 18 months against the dollar after the Bank of England said rising bond yields around the world will weigh on the nation’s economic outlook. The Dollar Index rose a four-week high before the Labor Department releases its monthly job report tomorrow at 12:30 GMT.

The US jobs report release for June will be a closely followed event, in the light of the Federal Reserve officials' hints at the possibility of QE tapering sometime this year. The consensus expectation however is for moderate growth of around 170K, which should not induce the Fed to change policy.

The  majority of the economists  believe we will see a 150-180K increase in hiring in June.

As for the unemployment rate, currently at 7.6%, consensus points to a drop to 7.4%-7.5%. Still, this would not be enough "to warrant the Fed tapering before or even during September, especially given the recent signs of slowdown in China.

U.S. financial markets are closed today for the Independence Day holiday.


EURO:
Draghi may field questions about Portugal. The bid yield on Portugal’s 10-year government bond Wednesday jumped to more than 8% for the first time since last November.

EUR/USD under $1.2900 as Draghi speaks.
At the moment the pair is at $1.2890 facing the next support at $1.2860 (weekly cloud top) followed by may lows $1.2820.  On the flip side, a break above $1.3030 (high Jul.3) would target $1.3055 (MA100d) en route to $1.3078 (high Jul.2).


POUND:
The pound fell against all of its 16 major counterparts after the Bank of England said in a statement that increases in market rates aren’t justified and may weigh on growth, prompting speculation it will add stimulus.

GBP/USD fall to the bottom of the $1.5100/$1.5325 range.
There had been a bias for the near term at least to the upside with bullish UK data and for a push higher towards $1.5350/75, however evidently and more broadly speaking, the pair remains caught in a bear trend. With a faster improving US economy and a potentially higher yielding placement in 2yr treasuries, fundamentals persist. Resistances to the top side within the range come as $1.5285, $1.5305/10, $1.5350 and $1.5375. Strong support is now the figure $1.5100, and a break below opens up previos territory and June lows.
Buy interest clustered at $1.5050/60.


YEN:
The yen lost its grounds versus the dollar. Bank of Japan Gov. Haruhiko Kuroda said earlier in the day the local economy was improving and that consumer prices were expected to gradually rise as the effect of the central bank’s quantitative easing took hold.
BOJ also raised economic assessment for 8 out of 9 regions in quarterly report.

USD/JPY holds a bit above Y100 with resistance remains at Y100.45/50. Break above will target Y101.20.  Initial support is around daily lows on Y99.20. Below Y98.80 support comes at Y97.20, with a break under targets last Friday’s lows near Y96.90.


DATA AHEAD:

At 23:30 GMT Australian Jun AiG Performance of Construction Index comes.

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