Markets await Fed minutes!
Key Notes:
- Japan preliminary GDP q/q 0.6% vs. 0.4%; Prelim price index y/y 3.4% vs. 3.6%
- Australia Westpac consumer sentiment 6.4% vs. -3.2% previously
- German PPI m/m 0.1% vs. 0.1%
- BoE releases meeting minutes
- Switzerland ZEW Economic expectations -0.1 vs. -23.2 previously
- Canada Wholesale sales m/m 0.8% vs. 0.9%
Later:
- US Crude Oil inventories report
- FOMC meeting minutes
The currency markets were relatively quiet since the start today as far as the Kiwi and the Australian Dollars were concerned. The Japanese Yen saw a bit of volatility early into the Asian trading session as the Japanese GDP quarterly data was released. On an annualized basis, GDP expanded 2.4% for January – March periods, rising above 1.5% expected increase. Private consumption also gained, rising 0.4% for the quarter including capital spending, marking a first increase in the past few quarters. The modestly better than expected GDP data is likely to see the Bank of Japan stand pat on policy at its next meeting. USDJPY rallied to mark a day’s high near 121.100 and virtually stalled ahead of the FOMC minutes later in the evening.
With the Greenback posting a strong gain yesterday, the Australian and Kiwi dollars remained subdued. AUDUSD is back at familiar support near 0.78875 while NZDUSD was flirting back near previous lows of 0.7344.
The European trading session was also light today with the exception of the Bank of England’s meeting minutes. While there was no change to the vote count for interest rate hikes, the minutes revealed a close decision for two members who wanted to vote otherwise. The minutes, showing nothing new to the markets, saw a subdued reaction from the Pound Sterling which continues to remain under pressure since yesterday’s negative CPI data.
GBPUSD has been largely consolidating for the most part today and is trading near the support zone of 1.551 through 1.5455. A break of support here could see the GBPUSD decline further seeking support near 1.52, while to the upside price will have to break above 1.58.
The Euro, single currency was also trading sideways although looking weaker to the downside after breaking below 1.117 support. The next likely level to target will be 1.10 following which EURUSD could possibly test 1.082 support, which will put to question the strength of the Euro rally going forward.
Crude Oil futures managed to edge higher for the most part today but looks vulnerable to the inventories report as a negative bias is starting to fill up the market sentiment and also technically the Crude Oil charts point to a correction to the short term bullish rally that has lasted a few months.
The US trading session saw the Canadian wholesale sales data being released which grew 0.8%, missing estimates on a softer not, but overall saw an improvement from previous month’s contraction of -0.4%. With no more major news events due for the remainder of the evening, the currency markets are likely to continue their sideways price action until the release of the Fed’s minutes.
