Global Markets:
- Asian stock markets: Nikkei up 0.60 %, Shanghai Composite gained 0.05 %, Hang Seng rose 0.40 %, ASX 200 fell 0.40 %
- Commodities: Gold at $1264 (-0.65 %), Silver at $16.60 (-0.90 %), WTI Oil at $48.70 (-0.95 %), Brent Oil at $51.30 (-0.90 %)
- Rates: US 10 year yield at 2.27, UK 10 year yield at 1.22, German 10 year yield at 0.48
News & Data:
- New Zealand Employment Change q/q -0.2 % vs 0.7 % expected
- New Zealand Unemployment Rate 4.8 % vs 4.8 % expected
- Australia Building Approvals 10.9 % m/m vs 1.5 % expected
- Asia tech stocks bathe in Apple glow, dollar overshadowed – RTRS
- U.S. spending, factory data point to moderate economic growth – RTRS
Markets Update:
The US Dollar regained some strength overnight, while Asian stock markets picked up the positive sentiment from Wall Street and extended gains.
The New Zealand Dollar was the worst performing currency overnight. Employment data disappointed, with employment chage arriving at -0.2 %. The market expected an increase of 0.7 %. NZD/USD fell from 0.7470 to 0.7410. Key support is seen around 0.7380, but a break below that level would signal a retracement to at least 0.73.
The Aussie Dollar is also a tad weaker, but benefited from AUD/NZD buying. AUD/USD fell to 0.7940, and a clear break below 0.7935 would confirm the recent top at 0.8060. Nevertheless, the outlook for the Aussie Dollar remains positive amid solid risk appetite and rising commodity prices. AUD/USD should run into decent demand around 0.7880 and 0.7830.
Meanwhile, the British Pound looks quite overbought in the short-term and a retracement is likely in the near-term. Further, Brexit concerns and a reluctant Bank of England should keep the currency under pressure. Watch for initial support at 1.3150, and stronger one ahead of 1.31.
The Euro looks unstoppable, although the charts also suggest EUR/USD is heavily overbought in the short-term. Nevertheless, momentum remains strong and there is little resistance until 1.20 now. Support is seen at 1.1780 and 1.1720.
Upcoming Events:
- 09:30 BST – UK Construction PMI
- 13:15 BST – US ADP Nonfarm Employment Change
- 15:30 BST – US Crude Oil Inventories
