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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