EU Open Report - 18.6.2015

Quite a retracement for the USD after the FOMC minutes. And yet, all indications of Q2 bounce back  were present. However, the "dots" also pointed to a higher unemployment rate, and ignoring wages, that's dovish. The dots, however, also show that we have 10 members thinking that we will have at least two hikes. Of course there are now seven who are thinking one or less, so they are leaving two hikes live, but not heavily committed. Overall, the wait and see signal is clear and that is more dovish than what market was looking for.

1. Who Said What

- Fed hears data more loudly than IMF, World Bank – Reuters BreakingViews.

- Japan Reuters Tankan June mfg index +14, non-mfg +36, May +13, +33, +19 and +36 eyed in September, non-mfg index at record high, consumption picking up.

- China May new home prices +0.2% m/m, -5.7% y/y, April -6.1% y/y.

- No breakthrough expected at EuroGroup (on Greece) despite Faymann visit,  Juncker call – Kathimerini.

- ECB/Buba Weidmann – ECB can’t fund Greece if political talks fail – Reuters.

- NZ Q1 GDP +0.2% q/q, +2.6% y/y, +0.6% and +3.0% eyed, drought bites, backs RBNZ rate cut view.

2. Asian Equity & FX Roundup

Asian equities largely ignored the FOMC-inspired Wall Street close, and moved lower with ASX down 1.6% (iron ore weighing), Nikkei down 1%, Shanghai down 0.2% and Hang Seng flat.

ECB is to increae the ELA once again by 1.1 Bln euros, to 84.1 bln, as Greek bailout talks continue. Weidmann said that the ECB will not provide any more financing for Greece if discussions fail.

- Jpy pairs took a hit overnight
- Eur crosses better bid, especially EurUsd which is holding it's gains as we approach Europe.
- Gbp continues to be the strongest looking currency, as we've been saying for the past 2 weeks.
- Nzd continues to be the weakest looking currency, as we've also been saying for the past 2 weeks.
- Aud crosses mixed, nothing to note here.
- Cad crosses also mixed.

3. Calendar

Source: Investing.com