US session review 10.07.2013:

Data released (actual, consensus, previous):                     

06:00 GMT Germany Consumer Price Index (YoY) (Jun)  1.8%    1.8%    1.5%        

06:00 GMT Germany Consumer Price Index (MoM) (Jun)   0.1%    0.1%    0.4%        

06:00 GMT Germany Harmonised Index of Consumer Prices (MoM) (Jun) 0.1%    0.1%    0.3%   06:00 GMT Germany Harmonised Index of Consumer Prices (YoY) (Jun) 1.9%    1.9%    1.6%        

06:45 GMT France Current Account (May) €-4.1B   _     €-2.8B        

06:45 GMT France Industrial Output (MoM) (May)  -0.4%    -0.8%    2.2%        

Cascading stops in EUR/USD, USD/JPY and other dollar pairs are contributing to a sharp slump in the US dollar.

Many Federal Reserve officials want to see more signs employment is picking up before they’ll begin slowing the pace of $85 billion in monthly bond purchases, according to minutes of policy makers’ last meeting.

Chairman Ben S. Bernanke said in a press conference after the meeting that the Fed may trim its bond-buying program this year and halt it around mid-2014 if economic performance tracks the central bank’s forecast. The minutes show officials want to see that forecast confirmed before tapering their purchases.

ECB member Christian Noyer, who spoke today at a financial conference in Paris, saw downside risks to the Eurozone economy and reiterated that the ECB's monetary policy would remain accomodative for as long as needed. The forward guidance on rates, introduced by Mario Draghi last week, was consistent with the central bank's mandate.

EURO:

BNP think  Fed minutes don't change bullish dollar view.

Euro rose a bit but ECB member Cœure noted that Eurozone is still engulfed in a severe crisis and it makes problems for the government.

EUR/USD jumped  to $1.2950 after earlier it challenged $1.2760. Below losses widen to $1.2745 (Apr 24 lows) and $1.2660 (Dec 13’2012 lows). Initial resistance is near $1.3030 (high Jul.3) and $1.3080 (high Jul.2).

POUND:

The pound rose from a three-year low versus the dollar amid speculation a recent selloff was excessive before inflation data due next week. Moreover, Moody's upgrades UK banking system outlook.

GBP/USD  recovered to $1.4990 after it challenged $1.4810. Initial resistance is near $1.5020 (Friday’s Asia higihs), then - at $1.5130 (Jul 3 lows). Below recent lows support comes at $1.4780 (Feb 28’2010 lows) and $1.4720.

YEN:

Deputy economic minister Nishimura noted he expects BOJ to continue easing policy. To reach 2% inflation target BOJ should communicate with market to stabilise rates.

USD/JPY trades at Y100.20 with support comes at Y99.90 (Friday’s low) and Y99.50 (Jul 4 low). Resistance is around  Y101.00, then - at Y101.50, above - near Y102.70 (channel line from Jun 14), then - at Y103.70 (May 22 high).

DATA AHEAD:

At 22:30 GMT New Zealand’s Jun  Business PMI .

At 23:50 GMT Japan reports May Machinery Orders with 1.3% m/m and 2.5% y/y expected after -8.8% and -1.1% earlier respectively.

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