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11 May 2015
Kiwi plunges amid rate cut talks, BOE decision, Greece – Key Events
FXStreet (Mumbai) - The New Zealand dollar was the major laggard in Asia, sliding to two month lows amid heated speculations of RBNZ rate cut as early as next month. While its OZ neighbor, the Aussie, also traded in red after Australia’s business conditions
deteriorated in April. USD/JPY held on to gains, eyeing 120 barrier, as the US dollar remained underpinned on the recent series of upbeat US jobs data.
Key headlines in Asia
China cuts interest rates again
Kiwi under pressure as ANZ calls for RBNZ rate cuts
Australian business conditions decline in April - NAB
Dominating themes in Asia - centered on JPY, AUD, NZD.
A data-thin Asian session, with Aus NAB Business Confidence numbers reported which came in worse than estimates. While the Asian markets kicked-off the week on a stronger note as China's latest round of stimulus boosted investor sentiment in the region.
On Sunday the People's Bank of China (PBoC) cut the benchmark lending rate by 25 basis points to 2.25%, and the one-year lending rate by 25 basis points to 5.10%.
The entire Antipodean complex was offered this session, with the Kiwi the biggest loser after ANZ rolled out expectations of a RBNZ rate cut by 25bps in June and follow up with another cut in July. AUD/USD also tracked losses from its OZ counterpart and surrendered 0.79 barrier. While discouraging business confidence data also dragged the Aussie lower.
The dollar-yen pair recovered losses and traded with mild gains below 120 mark as the US dollar remains boosted cross the board, riding higher on the latest upbeat US NFP and unemployment rate figures released on Friday.
Heading into Europe - centered on EUR, GBP
The major highlight in today’s data-light EUR calendar is likely to be Bank of England (BOE) monetary policy statement due to be released at 11GMT. While Greece is back in focus ahead of Euro group meetings which will go on all through the day.
The Bank of England's (BoE) announcement today is expected to be a non-event. The policymakers are very likely to keep the monetary policy stance unchanged in May by maintaining the base interest rate at the record low level of 0.5% for a seventy-fourth consecutive month amid slowing growth and very weak CPI at the moment.
Greece – Back in Spotlight
The Euro group, euro zone finance ministers, will meet in Brussels today. While the meeting is not expected to bring a complete resolution to an existing stand-off between Greece and its creditors, and the European Central Bank (ECB) has suggested that if political progress isn’t seen by May 11, it may halt its current policy of boosting borrowing ability for Greek banks.
While Greece made a €200 million interest payment to the IMF last week, the next scheduled €750 million payment to the IMF, due on May 12, is expected to be a serious challenge, with markets monitoring Greece headlines.
For further insights on EUR, GBP trades in the day ahead, ANZ notes, "Leveraged funds reduced their overall net long USD positioning by USD3.1bn to USD24.4bn in the week, marking the fourth consecutive week of long USD reductions, the decrease in USD longs was led by GBP (USD2.4bn) and AUD (USD1.9bn)."
"Looking ahead, greater focus will turn to the EUR as Euro finance ministers assemble in Brussel for the Euro group meeting on 11 May to find an agreement between Greece and its lenders. Despite the ongoing uncertainty regarding Greece, leverage funds continue to cover their EUR shorts for the sixth consecutive week. Focus will turn to the resolution for Greece in the euro area."
deteriorated in April. USD/JPY held on to gains, eyeing 120 barrier, as the US dollar remained underpinned on the recent series of upbeat US jobs data.
Key headlines in Asia
China cuts interest rates again
Kiwi under pressure as ANZ calls for RBNZ rate cuts
Australian business conditions decline in April - NAB
Dominating themes in Asia - centered on JPY, AUD, NZD.
A data-thin Asian session, with Aus NAB Business Confidence numbers reported which came in worse than estimates. While the Asian markets kicked-off the week on a stronger note as China's latest round of stimulus boosted investor sentiment in the region.
On Sunday the People's Bank of China (PBoC) cut the benchmark lending rate by 25 basis points to 2.25%, and the one-year lending rate by 25 basis points to 5.10%.
The entire Antipodean complex was offered this session, with the Kiwi the biggest loser after ANZ rolled out expectations of a RBNZ rate cut by 25bps in June and follow up with another cut in July. AUD/USD also tracked losses from its OZ counterpart and surrendered 0.79 barrier. While discouraging business confidence data also dragged the Aussie lower.
The dollar-yen pair recovered losses and traded with mild gains below 120 mark as the US dollar remains boosted cross the board, riding higher on the latest upbeat US NFP and unemployment rate figures released on Friday.
Heading into Europe - centered on EUR, GBP
The major highlight in today’s data-light EUR calendar is likely to be Bank of England (BOE) monetary policy statement due to be released at 11GMT. While Greece is back in focus ahead of Euro group meetings which will go on all through the day.
The Bank of England's (BoE) announcement today is expected to be a non-event. The policymakers are very likely to keep the monetary policy stance unchanged in May by maintaining the base interest rate at the record low level of 0.5% for a seventy-fourth consecutive month amid slowing growth and very weak CPI at the moment.
Greece – Back in Spotlight
The Euro group, euro zone finance ministers, will meet in Brussels today. While the meeting is not expected to bring a complete resolution to an existing stand-off between Greece and its creditors, and the European Central Bank (ECB) has suggested that if political progress isn’t seen by May 11, it may halt its current policy of boosting borrowing ability for Greek banks.
While Greece made a €200 million interest payment to the IMF last week, the next scheduled €750 million payment to the IMF, due on May 12, is expected to be a serious challenge, with markets monitoring Greece headlines.
For further insights on EUR, GBP trades in the day ahead, ANZ notes, "Leveraged funds reduced their overall net long USD positioning by USD3.1bn to USD24.4bn in the week, marking the fourth consecutive week of long USD reductions, the decrease in USD longs was led by GBP (USD2.4bn) and AUD (USD1.9bn)."
"Looking ahead, greater focus will turn to the EUR as Euro finance ministers assemble in Brussel for the Euro group meeting on 11 May to find an agreement between Greece and its lenders. Despite the ongoing uncertainty regarding Greece, leverage funds continue to cover their EUR shorts for the sixth consecutive week. Focus will turn to the resolution for Greece in the euro area."