Overnight equity markets
Nikkei +0.64% 9’440.86
S&P500 -1.08% 1’286.17
Dow -0.50% 12’089.96
Nasdaq -1.11% 2’702.56
Overnight ranges
https://ibol81.ibb.ubs.com/fxdesktop/fxd_fxweb/fxwebapp/osrPopup.do
UBS Investment Bank TRADERS SENTIMENT
…have a look at UBS Investment Bank’s FXWeb for all technical updates
EURUSD Prefer to go long 1.4570/75, stop below 1.4560, targeting 1.4660
USDCHF sell rally 0.8380 stop above 0.8410 target 0.8300
EURCHF Play range 1.2160 – 1.2240
EURJPY eurjpy again in slow squeeze today as market slightly oversold, prefer selling 117.80 , stop 118.20 targeting move to 116.50
USDJPY usdjpy holds above 80.00 and has had a painful slow grind higher on mild short covering, prefer to sell 80.40-45 with stop abve 80.80, target 79.60
GBPUSD we still favour buying cable on dips near 1.6285 with a stop below 1.6240 targeting 1.6450 again
EURGBP running into a few offers ahead of 0.8840, rather buy the dip tho 0.8890 for a test of 0.9000..
Gold gold buy dips around 1539 40 for 1551 53 stop 1535
Silver silver buy dips 36.40 45 for 36.95 00 stop 36.25
UBS Morning Adviser/Macro Keys/Swiss Daily Economic Comment
Interest Rate Snapshot
Most interesting take away overnight is the RBA decision, where they obviously left rates alone, interestingly though is the fact that the phrase “higher interest rates were likely to be required at some point” disappeared as well as the rather hawkish inflation outlook was eliminated, hard to believe though that one month can make such a big difference but maybe points to the fact that the RBA is willing to wait and see for the time being. All in all a dovish outcome! That maybe makes me think that we expect to much from the ECB this week? A hike in July is probably still on the cards, but the conclusions for the future might be less hawkish than feared, we shall see! Also here inflation forecasts going to be key! Fed’s Rosengren made comments that weakening data alters policy exit timing, it is too early to say if more stimulus is needed! Bunds to open 14 tics higher at 125.58, still in a bullish mode as long as we stay above 124.96, to the upside a break of 126.04 is required to open the next step up to 126.94. Last but not least, swiss CPI will be closely watched today ahead of next weeks SNB meeting, the danger is here for a higher reading! Good luck all!
The Day Ahead in EM
Hungary: Industrial Production WDA for April is due at 0700GMT (Previous 9.20%, Bloomberg 8.80%)
South Africa: BER Business Confidence for Q2 is due at 1000GMT (Previous 55.0)
Brazil: FGV Inflation IGP-DI for May is due at 1100GMT (Previous 0.50%, Bloomberg 0.35%),
IBGE Inflation IPCA for May is due at 1200GMT (Previous 6.51%, Bloomberg 6.56%)
CNI Capacity Utilization for April is due at 1300GMT (Prev 82.40%, Bloomberg 82.10%)
Chile: Trade Balance (Previous $1582.5 mn, Bloomberg consensus $1800.0 mn) and Copper Exports (Previous $3728.1 mn) till May are due at 1230GMT.
Philippines: FX Reserves for May is due (Previous $67.8 bn).
Taiwan: CPI for May is due at 0800GMT (Previous 1.34%, Bloomberg 1.64%)
Singapore: FX Reserves for May is due at 0900GMT (Previous $242.52 bn)
Malaysia: FX Reserves till May-11 is due at 0930GMT (Previous $132.62 bn).
South Korea: GDP at Constant Price for Q1 is due at 2300GMT (Previous 4.20%).
Gary Dhami
UBS Investment Bank