US session review 16.07.2013:

Data released (actual, consensus, previous):                              

08:30 GMT UK Core Consumer Price Index (YoY) (Jun) 2.3%    2.3%    2.2%        

08:30 GMT UK Consumer Price Index (MoM) (Jun) -0.2%    -0.1%    0.2%        

08:30 GMT UK Consumer Price Index (YoY) (Jun) 2.9%    3.0%    2.7%        

08:30 GMT UK DCLG House Price Index (YoY) (May) 2.9%    2.9%    2.6%        

08:30 GMT UK Producer Price Index - Output (YoY) n.s.a (Jun)2.0%    1.9%    1.2%        

08:30 GMT UK PPI Core Output (MoM) n.s.a (Jun)  0.0%    0.1%    0.1%        

08:30 GMT UK PPI Core Output (YoY) n.s.a (Jun) 1.0%    1.1%    0.8%        

08:30 GMT UK Producer Price Index - Input (MoM) n.s.a (Jun)  0.2%    -0.2%    -0.6%       

08:30 GMT UK Producer Price Index - Input (YoY) n.s.a (Jun)  4.2%    4.2%    1.8%   

08:30 GMT UK Producer Price Index - Output (MoM) n.s.a (Jun)  0.1%    0%    0%        

08:30 GMT UK Retail Price Index (YoY) (Jun)  3.3%    3.4%    3.1%        

08:30 GMT UK Retail Price Index (MoM) (Jun)  -0.1%    0.0%    0.2%   

09:00 GMT EMU Consumer Price Index (YoY) (Jun) 1.6%    1.6%    1.4%        

09:00 GMT EMU Consumer Price Index - Core (YoY) (Jun) 1.2%    1.2%    1.2%        

09:00 GMT EMU Consumer Price Index (MoM) (Jun) 0.1%    0.1%    0.1%        

09:00 GMT EMU Trade Balance n.s.a. (May) €15.2B    €11.8B    €14.1B    Revised from €14.9B    

09:00 GMT EMU Trade Balance s.a. (May) €14.6B    €16.2B    €15.2B    Revised from €16.1B    

09:00 GMT EMU ZEW Survey - Economic Sentiment (Jul) 32.8    31.8    30.6        

09:00 GMT DE ZEW Survey - Economic Sentiment (Jul) 36.3    39.6    38.5    

The expectations that Fed Chmn. Bernanke’s comments in front of Congress later this week will lean dovish are pressuring the USD.

However, in essence, they expect a repeat of what policy makers have been suggesting for a while now tapering is likely to start later this year but that interest rate increases (i.e. a tightening in monetary policy) is a long way off still. “Yesterday’s announcement that the chairman’s prepared remarks will be released at 8.30ET, instead of just as he starts to speak at 10ET as has been the case before, prompted some speculation that there will be important news communicated in the testimony, though we doubt this logic. Lawmakers simply want time to read the speech ahead of Chairman Bernamke’s remarks it seems.”

EURO:

Eurozone Trade surplus n.s.a widened to €15.2 billion in May from €14.1 billion in April, according to data released today by Eurostat. Analysts expected the surplus to narrow to €11.8 billion.

Trade surplus s.a. narrowed to €14.6 billion in May, from €15.2 billion in April and against forecasts of widening to €16.2 billion.

ZEW report were dissapinting.

In US June consumer prices rose 0.5%, which was above the 0.3% uptick that had been expected. This followed the prior month's increase of 0.1%. The jump in prices was mostly a result of a 6.3% increase in the gasoline index. In addition, core prices rose 0.2%, in line with the consensus.

Industrial production increased 0.3% in June, which was in-line with the consensus estimate. That followed on the heels of an unchanged reading for May and was driven by a 0.3% increase in manufacturing production and a 0.8% jump in the output at mines. The output of utilities decreased 0.1%.

Lastly, the May net long-term TIC flows report indicated a $27.2 billion outflow of foreign capital from U.S. denominated assets. This followed the prior month's $37.3 billion outflow.

EUR/USD is testing resistance at $1.3150 (hourly high). A break above $1.3208 (high Jul 11) would expose $1.3255 (high Jun 21). Below $1.3000 next support comes at $1.2966 (low Jul.11) ahead of $1.2949 (high Jul.10) and finally $1.2755 (low Jul.1).

POUND:

The pound has not changed much after the higher UK inflation figures during June. According to experts’ opinion, to really get a stronger move up here we need to see a daily close above 1.5195/1.5200 resistance.

GBP/USD trades at 1.5120 with the next resistance at 1.5143 (high Jul.16) followed by 1.5173 (38.2% of 1.5753-1.4814) and then 1.5222 (high Jul.11). On the downside, a violation of 1.5028 (low Jul.15) would clear the way to 1.5018 (50% of 1.4814-1.5222) and then 1.5000 (psychological level).

YEN:

Yen rose against dollar.

USD/JPY remains under Y100.00. Support comes at recent lows on YY98.20. Below support comes at Y97.77/70, ahead of Y97.00 (June 25 low). Initial resistance comes at Y99.70-Y100.00, then - at  Y101.00 and Y101.50.

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