Tuesday, 28 April 2015 23:00
USD Consumer Confidence (APR): 95.2 actual vs 102.5 estimate, prior revised up to 101.4.
In a report, the Conference Board, a market research group said its index of consumer confidence fell to 95.2 this month from a reading of 101.4 in March, whose figure was revised from a previously reported 101.3. Analysts expected the index to increase to 102.5 in April.
The Present Situation Index decreased from 109.5 last month to 106.8 in April. The Expectations Index declined from 96.0 last month to 87.5 in April.
Tuesday, 28 April 2015 20:15
USD S&P/CS 20 City (MoM) s.a. (FEB): 0.93% actual vs 0.70% estimate, prior revised up to 0.88%.
In a report, Standard & Poor’s with Case-Shiller said its house price index rose at an annualized rate of 5.0% in February from a year earlier, above forecasts for a reading of 4.7% and following a gain of 4.6% in January.
EUR/USD was trading at 1.0922 from around 1.0928 ahead of the release of the data, GBP/USD was at 1.5285 from 1.5280, while USD/JPY was at 119.09 from 119.05 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 96.63, compared to 96.60 ahead of the report.
Tuesday, 28 April 2015 14:37
The shared currency swings between gains and losses versus the greenback in the European morning, rebounding sharply after a fresh bid wave caught the US dollar which dragged EUR/USD to fresh session lows and now back to square one, testing highs near 1.09 handle.
The EUR/USD trades flat at 1.0894 levels, hovering close to 1.0899 highs. EUR/USD wiped out losses and trades flat, bouncing-off fresh session lows following a sudden bout of selling was witnessed in the greenback which pushed the single currency to test 1.09 barrier.
However, the upside in the pair seems restricted as the recent the developments surrounding Greece continue to weigh on EUR/USD. The Greek government needs to find around €1 billion for salaries and pensions this week, as well as around €200 million by the end of the week to repay the IMF.
Meanwhile, traders may also await US HPI and consumer confidence data due later in the day for fresh USD moves which may set the direction for the main currency pair.
The pair has an immediate resistance at 1.0928 (April 27 High) levels, above which gains could be extended to 1.0957 (April 7 High) levels. On the flip side, support is seen at 1.0818 (April 27 Low) below which it could extend losses to 1.0802 (April 7 Low) levels.
Tuesday, 28 April 2015 14:31
Gold is having a hard time to extend gains above the USD 1200 mark, after rising more than 2% in the previous session on the back of a weak US dollar.
Focus on Fed policy statement
The metal shot higher in the previous session as investors now believe the Federal Reserve would delay the rate hike to December 2015 or early 2016. The metal clocked a high of USD 1207.2, before falling back to USD 1202-1200 levels today.
Moreover, the USD index appears to have steadied around 97.00 after recovering from the low of 96.62 seen in the previous session. Consequently, the metal has been stuck around USD 1200-1202 levels. Ahead in the data, the US consumer confidence data could influence the metal prices.
Gold Technical Levels
The immediate resistance is located at 1205.00 above which gains could be extended to 1209.92 (200-DMA). On the flip side, a break below 1200.00 could drive the prices lower to 1194.90 (10-DMA).
Tuesday, 28 April 2015 13:44
John Normand, Head of FX, Commodities & Int’l Rates Research at JP Morgan, shares the three key scenarios possible in the Greece debt deal and the possible impact on euro and rates.
“There are three scenarios: (1) resolution in Q2 until the next rollover hump in coming years; (2) intensification through Q2 then resolution in Q3 or Q4; and (3) intensification with a path towards EMU exit.”
“The first path is our base case for the reasons stated earlier – the troika is willing to concede on the primary surplus and provide funding in exchange for progress on structural issues, but Greece’s rollover profile in coming years preserves high odds of recurring funding stress over the long term.”
“But if Greece goes quiet for the rest of 2015, we doubt the euro rises more than two to three cents to about 1.10, for a couple of reasons: the ECB balance sheet growth that has contained market stress will not reverse if Greece stabilises; and there is little evidence from the price patterns in table 1 that accounts are hedging Greek risk through the currency.”
“The second scenario envisions no resolution this quarter and thus a default on official sector obligations to the IMF, deposit flight from the Greek banking sector, a cap on the ECB’s ELA facility, a liquidity crunch and capital controls.”
“Since the second scenario is basically the status quo with an ELA limit, capital controls and slightly higher odds of EMU exit, sovereign spreads broadly would widen about 50bp and the euro would fall to the low end of the March/April range. But with the ECB still deploying its balance sheet, it remains tough to see this outcome delivering systemic spillovers on more than an intra-week or intra-month basis.”
“The third scenario is the most adverse and would arise if the Greek government responded to an ELA limit and capital controls with policies generally read as precursors to EMU exit. These moves could include issuing IOUs declared as legal tender, or perhaps imposing a nationwide bank holiday.”
“The euro would fall perhaps as much as 10 cents intra-month (so equivalent to its usual drops during existential crises), not because investors and corporate have material Greek exposure to liquidated or hedge, but because they will ask who is the next Greece or the next Syriza”
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