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Forex News Timeline

Thursday, May 25, 2017

Analysts at Nomura explain that although the release of the Trump administration’s proposed FY 2018 budget will have little influence on the final spe

Analysts at Nomura explain that although the release of the Trump administration’s proposed FY 2018 budget will have little influence on the final spending package that will eventually pass Congress, it has provided some interesting insights, including details on an infrastructure plan and a desire to curtail federal government spending drastically on a variety of social programs. Key Quotes“More importantly, the administration’s proposed budget highlights two important upcoming deadlines. First, a budget or continuing resolution must be passed by 30 September to keep the government operating beyond then. Second, a new debt ceiling limit or a debt ceiling suspension must be passed by the fall before “extraordinary measures” run their course.  The risk that a budget fails to pass is higher than in May, when the remainder of FY 2017 was passed, but historically low as there has never been a government shutdown when the same political party controls the House, Senate, and White House.  Likewise, the risk that Congress fails to raise or suspend the debt ceiling, before the Treasury Department is no longer able to pay all of its bills in full and on time, is low. Moreover, contrary to Secretary Mnuchin’s preference, it is unlikely that Congress will address the debt ceiling before the August recess.”

Mei Xinyu, a commerce ministry researcher noted in an editorial in the official People's Daily newspaper on Thursday, Moody’s downgrade of China’s cre

Mei Xinyu, a commerce ministry researcher noted in an editorial in the official People's Daily newspaper on Thursday, Moody’s downgrade of China’s credit rating is “illogical” and overstates the levels of government debt. Moody's downgraded China's credit ratings on Wednesday for the first time in nearly 30 years. Key Quotes:"It is clear to see that the logic behind Moody's assertions goes against the objective facts," The China downgrade amounted to a "double standard" compared with how countries in Europe and the United States were treated. 

Cameron Bagrie, Chief Economist at ANZ, explains that according to the NZ’s 2017 budget, a good growth picture has underpinned rosy fiscal projections

Cameron Bagrie, Chief Economist at ANZ, explains that according to the NZ’s 2017 budget, a good growth picture has underpinned rosy fiscal projections and the Budget has ticked all the right boxes, though the missing is savings.Key Quotes“The 2017 Budget resembles an ABBA medley; I have a dream (delivering for New Zealanders); the name of the game (growth); money, money, money (rising surpluses); gimme, gimme, gimme (health primarily); and lay all your love on me (infrastructure and family income package). An SOS for savings initiatives.”“A good growth picture underpins rosy fiscal projections. GDP growth averages over 3% (nominal 5.1%). That’s a tad optimistic given capacity pressures. The operating surplus is projected to rise to 2.2% of GDP. Net debt falls to 19.3% of GDP. The bond tender programme is unchanged for 2017/18 at $7 billion and largely maintains that level thereafter.”“The odds of a recession between now and 2021 are non-trivial given historical experience. It’s prudent to build-up a war-chest, which the strategy caters for via a more restrictive debt target (10-15% of GDP). Treasury is projecting an uplift in the business cycle in 2018/19, which we don’t buy into, but we won’t split hairs over that.”“Surpluses provide options to reinvest and address priority needs and still offer tax reductions. A $2 billion per year ‘family incomes package’ of adjustments to tax thresholds and increasing Working for Families is the flagbearer. Investing in a growing economy gets $1 billion, and public services $7 billion, with $3.9 billion for health. These are large numbers but are spread over four years and are what’s required just to keep the wheels turning.”“The fiscal stance is more expansionary to the tune of 1.1% of GDP (say 0.2-0.3ppts per year), though still restrictive in aggregate. This is partially offset by underspend in 2016/17. But the positive fiscal impulse in 2018 and 2019 will be modestly relevant for the RBNZ.”“The Budget ticks all the right boxes, though the missing is savings. It’s not absent; you see semblances of it through the growth strategy, responsible fiscal management, resuming Super Fund contributions, and little microeconomic tweaks. We say ‘missing link’ because the economy is entering a juncture where funding a domestic savings shortfall to meet our investment needs via international capital is becoming more challenging. More domestic saving is required or investment needs to fall. A more proactive stance towards saving is needed in the future or interest rates will need to move up further than would otherwise be the case to do the job.” 

The US-based rating agency, Fitch ratings, came out with its latest review of the APAC non-bank financial institutions (NBFIs) on Thursday. Key Point

The US-based rating agency, Fitch ratings, came out with its latest review of the APAC non-bank financial institutions (NBFIs) on Thursday.Key Points:“Non-bank financial institutions (NBFIs) are playing an increasingly significant role in financial intermediation in a number of Asia-Pacific (APAC) markets, with rapid growth over the last five years spurred by tighter regulation of banks, the low interest environment and technological development.  Fitch Ratings expects these factors to continue to support strong growth over the next couple of years, although interest rate normalisation and greater regulatory scrutiny of NBFIs in some APAC markets could create headwinds in the medium term. Policymakers in some APAC markets have encouraged NBFI development as a way to address this problem and promote financial inclusion. NBFIs can also diffuse credit risk across the financial system.  However, NBFIs can also add to risks in the financial system if they are overly reliant on short-term wholesale funding, lack transparency or grow at an excessive rate.”

The research team at Westpac explains that according to the just published budget of New Zealand, strengthening economic conditions are allowing the G

The research team at Westpac explains that according to the just published budget of New Zealand, strengthening economic conditions are allowing the Government to have its cake and eat it too.Key Quotes“In Budget 2017, the Government has introduced a Family Incomes Package to support those on lower and middle incomes. This includes an adjustment to tax thresholds, an increase in Working for Families, as well as increases in accommodation support.” “Spending is being increased in a range of areas, including public and social services, as well as much needed infrastructure investment.” “Firm economic conditions mean that the Government can make these changes while maintaining its focus on longer-term debt reduction and improving the economy’s financial resilience.” “The initiatives announced today are likely to support GDP growth over the coming years. However, we have some concerns that economic growth, and therefore the surpluses, are unlikely to be as healthy as the Government expects over the course of the next five years.”

Analysts at ANZ note that according to the latest FOMC Minutes, Most participants judged that if economic information came in about in line with their

Analysts at ANZ note that according to the latest FOMC Minutes, Most participants judged that if economic information came in about in line with their expectations, it would soon be appropriate for the Committee to take another step in removing some policy accommodation.Key Quotes“A number of participants pointed out that clarification of prospective fiscal and other policy changes would remove one source of uncertainty for the economic outlook.” “Soon” points to June, though the picture is caveated by “it would be prudent” to wait for evidence that a recent slowdown in economic activity had been transitory.”  

The Chinese Yuan jumped to fresh 2-month highs against its American counterpart on Thursday, knocking-off USD/CNY to 6.8687 lows, before recovering

The Chinese Yuan jumped to fresh 2-month highs against its American counterpart on Thursday, knocking-off USD/CNY to 6.8687 lows, before recovering some ground to now trade around 6.8735, still down -0.24% on the day. Traders cite that the main reason behind the rise in Yuan is on the back of major state-owned banks selling USD in onshore market.   

The Bank of Japan (BOJ) deputy governor Iwata was on the wires last minutes, via Reuters, making a statement on stimulus exit strategy. Key Points:

The Bank of Japan (BOJ) deputy governor Iwata was on the wires last minutes, via Reuters, making a statement on stimulus exit strategy.Key Points:Revenue from holding bonds could rise at exit Hard to say what rate on excess reserves would be at exit Will avoid causing sharp yield rise on exit Will conduct exit strategy without confusing market  

The EUR/USD pair extended its break higher from a dip to 1.1170 region in Asia this Thursday, in the wake of FOMC minutes induced broad based US dolla

The EUR/USD pair extended its break higher from a dip to 1.1170 region in Asia this Thursday, in the wake of FOMC minutes induced broad based US dollar softness.EUR/USD catches fresh bids and nears 1.1250 Having taken a breather in early trades, the USD bears regained footing as we head towards late-Asia/ early Europe, driving the EUR/USD pair back towards the psychological levels of 1.1250. The latest leg up in the major is mainly driven by renewed weakness seen behind the US currency versus its main peers, as 2-year treasury yields continue to crumble, despite risk-on trades persisting across Asia, in the wake of higher oil prices and firmer Asian equities. The US yields and greenback were hit broadly by a dovish and cautious tone reflected by the FOMC in its minutes released late-Tuesday, with the 2-year treasury yields, which mimic the interest rate expectations, hurt the most, while the US 10-years finished -1.00% having ranged between 2.2519-2.2957% on the day . More so, latest upbeat Eurozone fundamentals also continue to boost the sentiment around the Euro, just as the US housing data continue to disappoint.  Looking ahead, oil-price action is expected to drive markets today amid a holiday-thinned European session, and ahead of the key OPEC meeting. Also, the US jobless claims, good trade balance and Fedspeaks will be closely eyed for further momentum. The Swiss, French and German markets will be closed today in observance of Ascension Day.EUR/USD Technical LevelsValeria Bednarik at FXStreet noted: “The pair has a strong static support at 1.1080, a possible bearish target for the upcoming sessions, in the case of a deeper correction, with a break below it supporting continued slides into the weekend. An upward acceleration through 1.1210 on the other hand, should favor another attempt to retest November's high of 1.1299. Support levels: 1.1160 1.1120 1.1080 Resistance levels: 1.1210 1.1260 1.1300.”

The overnight recovery in GBP/USD found extra legs in mid-Asia, now pushing the rate further towards 1.30 handle. GBP/USD re-takes 1.3000 The spot

The overnight recovery in GBP/USD found extra legs in mid-Asia, now pushing the rate further towards 1.30 handle.GBP/USD re-takes 1.3000 The spot staged a solid comeback in the US last session, after the US dollar slumped across the board, following the release of the FOMC minutes, which failed to offer anything new and hence, disappointed markets. The treasury yields also followed suit amid an unimpressive Fed minutes release. In today’s trading so far, cable broke a brief consolidative range to the upside and heads towards 1.30 handle, in response to fresh selling seen in the US dollar across the board, as 2-year treasury yields accelerate the declines. The USD index drops -0.12% and inches closer to multi-month troughs reached at 96.70 earlier this week. Moreover, positive sentiment around the Asian indices amid no updates delivered by the Fed on faster pace of rate hikes, also added to the renewed upside in the major. Meanwhile, higher oil prices ahead of the crucial OPEC Vienna meeting, keeps the sentiment buoyed around the risk-currency GBP. Focus now shifts towards the second estimate of the Q1 UK GDP due on the cards ahead of the US dataflow and Fedspeaks, which will provide fresh impetus to the GBP bulls.GBP/USD Levels to consider             Valeria Bednarik, Chief Analyst at FXStreet noted: “Short term, however, the pair is expected to extend to its decline, given that in the 4 hours chart, the price is below a bearish 20 SMA, whilst technical indicators have extended their declines within negative territory, down to fresh weekly lows. Support levels: 1.2950 1.2910 1.2880 Resistance levels: 1.3025 1.3060 1.3100.”

The US-based rating agency, Fitch ratings, published a latest report on China’s debt, especially after Moody’s Investor Service downgraded China’s cre

The US-based rating agency, Fitch ratings, published a latest report on China’s debt, especially after Moody’s Investor Service downgraded China’s credit ratings a day before.Key Headlines via Bloomberg:China’s finances and track record underpin A+ record, stable outlook last affirmed in November of 2016   Imbalances pose risk to economic stability

The USD/CAD pair dipped below 1.34 in Asia as the Canadian dollar remains well bid, tracking the uptick in the oil prices. Nears rising trend line su

The USD/CAD pair dipped below 1.34 in Asia as the Canadian dollar remains well bid, tracking the uptick in the oil prices.Nears rising trend line supportThe trend line sloping upwards from the Feb 16 low and April 13 low is seen offering support near 1.3382 levels. The Canadian dollar spiked in the overnight trade after the Bank of Canada kept rates unchanged as expected, but downplayed the recent miss in the inflation data. The policy statement sounded slightly hawkish and tilting towards rate hike. The USD/CAD pair fell to 1.3404 in the overnight trade and extended losses to a 1.3397 levels in Asia. The strength in the oil benchmarks seen ahead of the OPEC also keeps the bid tone around CAD intact. The CAD lost its charm in the first quarter of 2017, given the widening US-Canada rate differential. The bears could make a comeback if the OPEC fails to boost prices above $60 levels.USD/CAD Technical LevelsA break below 1.3382 (rising trend line support) would open up downside towards 1.3345 (100-DMA) and 1.3294 (200-DMA). The daily RSI is sloping downwards and is yet to hit the oversold territory. On the higher side, breach of resistance at 1.3465 (5-DMA) could yield a rally to 1.35 (zero figure) and 1.3547 (10-DMA). Only a daily close above the 10-DMA would signal short-term bearish invalidation.  

China commerce ministry (MOFCOM) out with the latest headlines, citing that they will continue to relax foreign investment rules for its auto industry

China commerce ministry (MOFCOM) out with the latest headlines, citing that they will continue to relax foreign investment rules for its auto industry, as reported by Reuters.

NZD/USD is on the retreat despite upbeat comments on growth and bullish long-term interest forecasts in the NZ budget.  The New Zealand government ex

NZD/USD is on the retreat despite upbeat comments on growth and bullish long-term interest forecasts in the NZ budget.  The New Zealand government expects a bigger surplus of NZD 2.86 billion in 2017-18. The official statement says the real GDP growth is forecast to pick up slightly in 2017, supported by migration inflows, investment and a recovery in exports. Growth is expected to peak at 3.8% in 2019.  The budget also sees a pick in the underlying inflation pressures as spare capacity is used up, prompting higher interest rates. Long-term interest rates are expected to rise gradually to 4.3% by 2021. Finance Minister Steve Joyce announced a NZD 11 billion spending on infrastructure over the next four years. Despite this, the NZD/USD is losing height and was last seen trading around 0.7036 levels. NZD/USD TechnicalsA break above 0.7054 (100-DMA) would open up upside towards 0.7090 (Mar 21 high) and 0.7111 (200-DMA). On the downside, the immediate support is seen at 0.70 (5-dMA) ahead of 0.6966 (50-DMA) and 0.6947 (10-DMA).   

Analysts at Barclays noted in their latest oil market report that nine-month extension of the oil production cuts is the likeliest outcome at OPEC's V

Analysts at Barclays noted in their latest oil market report that nine-month extension of the oil production cuts is the likeliest outcome at OPEC's Vienna meeting, Reuters reports.

New Zealand (NZ) Treasury is out with the Annual Budget release, outlining the government's budget for the year, presented in parliament by the financ

New Zealand (NZ) Treasury is out with the Annual Budget release, outlining the government's budget for the year, presented in parliament by the finance minister.Key Highlights:Government predicted a NZ$1.62 billion surplus in the year to June versus its prior forecast for a NZ$473 million surplus in the December half-year economic and fiscal update Finance Minister Steven Joyce: "These surpluses are significant, but they will be needed to meet the cost of the very large new capital investment the Government has committed to" Joyce announced NZ$11 billion in spending on infrastructure over the next four years Budget also included a NZ$6.5 billion package to increase family incomes by adjusting tax thresholds and increasing grants Government forecast a NZ$2.85 billion surplus in the year to June 2018, versus a prior forecast of a NZ$3.34 billion surplus

More comments flowing in from the BOJ board member Sakurai, as he continues to shed light on the inflation outlook. Main Headlines via Reuters: Rece

More comments flowing in from the BOJ board member Sakurai, as he continues to shed light on the inflation outlook.Main Headlines via Reuters:Recent price, wage growth somewhat disappointing given improvements in corporate profits, output gap Inflationary pressure likely to heighten in Japan as economy continues moderate expansion

Bank of Japan (BOJ) board member Makoto Sakurai crossed the wires now, via Reuters, commenting on the need to maintain easy money policy. Key Headlin

Bank of Japan (BOJ) board member Makoto Sakurai crossed the wires now, via Reuters, commenting on the need to maintain easy money policy.Key Headlines:Will guide yields to appropriate curve to sustain economy's momentum toward hitting inflation target There were some market views BOJ will raise yield target but underlying inflation remains moderate Given still moderate inflation, uncertainty over overseas economies, it is crucial for BOJ to maintain monetary easing Policy controlling long-term rates is a new challenge but BOJ has been able to do this without any big problem so far No change to BOJ approach of pursuing monetary easing both from keeping rates low, expanding base money Won't be able to achieve 2% inflation sustainably if policy makers try to forcefully stimulate short-term demand Rising global trend toward protectionism may be weighing on public's perception on economic outlook

Chincago Fed President Charles Evans, while speaking in Tokyo, said the below-target US inflation is "a serious policy outcome miss" and said that dem

Chincago Fed President Charles Evans, while speaking in Tokyo, said the below-target US inflation is "a serious policy outcome miss" and said that demonstrating a strong committment to our objectives by trying harder to hit our systemic inflation objective sooner rather than later is key to actually achieving this goal.  Key quotes US economy has returned to full employment Inflation has run below the 2% target for a full eight years  

The CEO of Nigerian oil company Oando says the national output will rise to 2.2 million barrels per day as the twice-attacked Forcados pipeline is exp

The CEO of Nigerian oil company Oando says the national output will rise to 2.2 million barrels per day as the twice-attacked Forcados pipeline is expected to return to full capacity by the end of June. "We think that the worst is behind us," he said. "Before the end of June, we will have Forcados back, which would take us comfortably back to 2.2 million bpd."

PBOC sets USD/CNY at 6.8695 vs 6.8758

PBOC sets USD/CNY at 6.8695 vs 6.8758

USD/JPY was consolidating above the midpoint of the 111 handle recovering two big figures higher (since 18th March) to overnight offers at the 200 smo

USD/JPY was consolidating above the midpoint of the 111 handle recovering two big figures higher (since 18th March) to overnight offers at the 200 smoothed sma. However, the FOMC minutes dented the dollar and yields dropped.  With the spectrum of Trump politics and concerns in the background over the Fed's neutral/hawkish stance, analysts at Brown Brothers Harriman noted that the next support to the downside in DXY at 96.45 is the 61.8% retracement of the rally from last May when it slipped below 92.00: "A bit below there is the low from the November election near 95.90.  A break would bring the minimum measuring objective of the possible head and shoulders top pattern (carved out between November 2016 and March 2017, which we were sceptical of), near 94.80 into view."  USD/JPY's spread is a driving factor with the with yields unable to gather pace above and stay above the psychological 2.3% level in the 10-years. USD/JPY levelsIn a tight range in Tokyo today, technically, the advance was contained by the 38.2% retracement of the latest bullish run around 112.00, explained Valeria Bednarik, chief analyst at FXStreet." Technical indicators have turned lower right above their mid-lines, whilst the price remains trapped between horizontal 100 and 200 SMAs, lacking directional strength in the short term."

Analysts at Nomura offered their projections for the USD/CNY fix today. Key Quotes: "Our model1 projects the fix to be 37 pips higher than the p

Analysts at Nomura offered their projections for the USD/CNY fix today.

Key Quotes:

"Our model1 projects the fix to be 37 pips higher than the previous fix (6.8795 from 6.8758) and 114 pips lower than the previous official spot USD/CNY close of 6.8909.

The basket implied change is 139 pips lower than the previous official spot USD/CNY close (6.8770 from 6.8909)."

South Korea BoK Interest Rate Decision meets expectations (1.25%) in May

Brent oil regained bid tone in Asia to trade above the $54.00 mark on speculation the OPEC is set to extend the oil output cut deal by nine months. P

Brent oil regained bid tone in Asia to trade above the $54.00 mark on speculation the OPEC is set to extend the oil output cut deal by nine months. Prices dipped to a low of $53.65 in the overnight trade as investors reacted to a smaller-than-expected US gasoline stocks draw. The Energy Information Administration data showed gasoline inventories fell only 787,000 barrels, compared with expectations for a 1.2 million barrel draw. The losses in oil prices were capped by the fact that oil inventories registered their seventh straight weekly drop in the week ended May 19 (actual 4.4 million barrels, expected 2.4 million barrels). The focus today is on the OPEC and non-OPEC meeting. Major oil producers are scheduled to decide whether to extend an agreement to cut world supply. The latest report from Goldman Sachs talks about short-term relief from the extended global oil deal and a potential for fresh oil market glut in 2018. As of now, the markets are not worried about Goldman’s long-run bearish call as consensus is growing on extending the cap by another nine months.Brent Oil Technical LevelsBrent was last seen trading around $54.30/barrel. Yesterday’s high of $54.49 if breached would open doors for $55.02 (Mar 2 low) and $55.16 (Feb 16 low). On the lower side, breach of support at $53.83 (session low) could yield a pullback to $53.23 (May 23 low) and $52.47 (50-DMA).    

Singapore Gross Domestic Product (QoQ) below expectations (-1%) in 1Q: Actual (-1.3%)

Analysts at Brown Brother Harriman explained that the USD/JPY exchange rate remains highly correlated with the 10-year yield.  That correlation is nea

Analysts at Brown Brother Harriman explained that the USD/JPY exchange rate remains highly correlated with the 10-year yield.  That correlation is near 0.72 now.  Key Quotes:That correlation is near 0.72 now.   "It had reached 0.78 in early March, was one of the strongest correlations since 2000. The two-year interest rate differential is also important.  The correlation now is a little more than 0.62. " "It had fallen to almost 0.45 in April after peaking near 0.67 in January and February.  Last year, the correlation did not rise above 0.60 in the first half and peaked in August near 0.67."  

Comments from Fed’s Kaplan crossing the wires via Bloomberg and Reuters – The Fed should unwind the balance sheet in a way that minimises impact. The

Comments from Fed’s Kaplan crossing the wires via Bloomberg and Reuters – The Fed should unwind the balance sheet in a way that minimises impact. The Fed minutes released yesterday showed nearly all policy makers agree to reduce balance sheet later this year.Key quotesFed is still below 2% inflation Progress of inflation is slow and even Should remove accommodation patiently Rates hikes could be more gradual than once a quarter US close to getting full employment US can’t grow debt to boost GDP any more  

Singapore Gross Domestic Product (YoY) in line with forecasts (2.7%) in 1Q

Analysts at Nomura noted the accompanying data from the US overnight. Key Quotes: "Existing home sales: Sales of previously-owned home declined 2.3%

Analysts at Nomura noted the accompanying data from the US overnight.Key Quotes:"Existing home sales: Sales of previously-owned home declined 2.3% m-o-m in April slowing to an annualized pace of 5.57m, which is below expectations (Nomura: +1.6% to 5.80m, Consensus: -1.1% to 5.65m). The shortage of inventory levels likely lowered sales in April. Total housing inventory at end-April increased 7.2% m-o-m, but on a y-o-y basis, it was down 9.0%. The month’s supply indicator increased to 4.2 months from 3.8 months in March, but the uptick was due to slower sales in April. National Association of Realtors reported that "Homes in the lower- and mid-market price range are hard to find in most markets.” Looking ahead, although mortgage rates have stabilized somewhat, continued lean supply of previously owned homes may continue to exert upward pressure on home price growth.Q2 GDP tracking update: Existing home sales in April were weaker than expected. Slower sales imply less brokers’ commissions, a component of residential investment, in Q2 than we have previously estimated. Therefore, we lowered our Q2 GDP tracking estimate by 0.1pp to 3.3%."

Currently, AUD/USD is trading at 0.7498, down -0.07% on the day, having posted a daily high at 0.7509 and low at 0.7498. AUD/USD is resting on the 0.

Currently, AUD/USD is trading at 0.7498, down -0.07% on the day, having posted a daily high at 0.7509 and low at 0.7498. AUD/USD is resting on the 0.75 handle after a 50 pip rally post the FOMC minutes overnight. The DXY was down as were US 10-yields when the Fed used the term "transitory" in respect to data monitoring.FOMC: future balance-sheet policy discussed - NomuraUS Dollar pushes lower toward 97 on FOMC minutesThis rattled the markets in an otherwise uneventful session making for the extension of the 10 & 21-DSMA rally in Europe from 0.7442 the low. For here, analysts at Westpac argued that there’s potential for a retest of this week’s 0.7517 peak, given the US dollar remains on the back foot. For the day ahead, RBA's Debelle gives opening remarks followed by a panel discussion at the launch of the FX Global Code in London while from NZ: NZD/USD: awaits the budget announced at 0200GMTIron Ore - Modest seaborne export growth continues - WestpacInsights: Trump administration’s proposed FY 2018 budget - NomuraAUD/USD 1-3 month: Further out, the analysts suggest that the modestly weaker than expected Australian CPI outcome has added yet another factor capping the AUD/USD: "softer commodity prices; a more protectionist stance from US President Trump, and higher US yields if the Fed raises rates in June as we expect. "These leave the AUSD/USD with strong resistance at 0.76. We expect to see it heading towards 0.74 by year end."4 hours chart"The price has managed to recover above its 20 SMA that heads now north around 0.7470, and technical indicators bouncing from their mid-lines, but below previous weekly highs. The Australian macroeconomic calendar will remain empty during the upcoming Asian session, with the pair then probably depending on equities, particularly mining-related ones for direction.  A stronger recovery is likely on an advance beyond 0.7515 this week high and the immediate resistance," - Valeria Bednarik, Chief analyst, FXStreet.    

Robert Kaplan, president of the Federal Reserve Bank of Dallas, is speaking in Toronto, noting that the US cannot grow debt to boost GDP any more.

Robert Kaplan, president of the Federal Reserve Bank of Dallas, is speaking in Toronto, noting that the US cannot grow debt to boost GDP any more.

Japan Foreign investment in Japan stocks dipped from previous ¥372.2B to ¥-26.4B in May 19

Analysts at Nomura offered a review of the FOMC minutes. Key Quotes: "FOMC minutes: In the minutes prepared for the 2-3 May FOMC meeting, the commit

Analysts at Nomura offered a review of the FOMC minutes.Key Quotes:"FOMC minutes: In the minutes prepared for the 2-3 May FOMC meeting, the committee reinforced our view that the FOMC will raise short-term interest rates in June if the economy continues to perform in line with the FOMC’s expectations. Incoming data so far have been mixed. Although there has been continued improvement in labor markets, with the unemployment rate ticking down further to 4.4% in April, inflation data were disappointing in March and April." "However, the minutes indicate that the FOMC members concurred with the view that some of the weakness in March CPI inflation was likely due to transitory factors like wireless telephone services, although this interpretation was made without weaker-than-expected CPI data in April, which became available a week after the May meeting. Nevertheless, the recent low readings in the unemployment rate may counterbalance disappointing inflation data, in our view." "The minutes also highlighted further discussion of future balance sheet policy. The minutes indicated that the FOMC prefers adjusting the “caps,” or limits, for the dollar amounts of Treasuries and agency MBS that would be allowed to roll off every three months. Further, the committee expected that once the caps reach their “fully-phased-in levels”, the Fed would maintain the caps until the size of the balance sheet was normalized. This indicates that the committee is unlikely to let 100% of maturing US Treasuries and MBS run off, even after the tapering period ends, which should slow the pace of balance sheet normalization."

Currently, NZD/USD is trading at 0.7045, down -0.08% on the day, having posted a daily high at 0.7052 and low at 0.7043. Forex today: FOMC no surpris

Currently, NZD/USD is trading at 0.7045, down -0.08% on the day, having posted a daily high at 0.7052 and low at 0.7043.Forex today: FOMC no surprises in minutes, DXY and 10-y US yields lower, stocks higherNZD/USD is steady in early subdued Asia post the FOMC minutes and subsequent weakness in the greenback.  The bird took advantage of the expectations for a positive budget coming up later in Asia while the FOMC minutes failed to June's nail in the coffin at the same time. There was talk of tapering in due course by way of settlement at maturity, but the lack of conviction from the Fed over the data had the market a little spooked. However, commodities and risk helped NZD/USD to 0.7057 retaining positive momentum. Analysts at Westpac expect a limited range between 0.7050-0.7100 for today.NZ: Budget likely to show that economy’s performance is generating greater revenue - BBHNZD/USD 1-3 month:  Further out, analysts at Westpac argue that the Fed’s tightening cycle plus US fiscal expansion should eventually reassert upside pressure on US interest rates and the US dollar, pushing NZD/USD below 0.6800 by year end. "US factors should outweigh local factors which are mostly supportive."NZD/USD levelsImmediate resistance remains at 100-day SMA near 0.7050-58 region where stops are tipped. Then, through 0.7047 as being Tuesday's high opens 0.7088 and 0.7148 resistances. To the downside, 0.7020, 0.700, 0.6980 and the 50 daily sma at 0.6949 are the key supports. 

Analysts at ANZ offered a breakdown of the various Central Banks from overnight.  Key Quotes: "The Fed: “Most participants judged that if economic i

Analysts at ANZ offered a breakdown of the various Central Banks from overnight. Key Quotes:"The Fed: “Most participants judged that if economic information came in about in line with their expectations, it would soon be appropriate for the Committee to take another step in removing some policy accommodation. A number of participants pointed out that clarification of prospective fiscal and other policy changes would remove one source of uncertainty for the economic outlook.” “Soon” points to June, though the picture is caveated by “it would be prudent” to wait for evidence that a recent slowdown in economic activity had been transitory. Senior ECB officials continued to counter growing market expectations that there may be a meaningful shift in ECB forward guidance with both Draghi and Constancio reinforcing the view that the ECB will fully implement its QE programme (EUR60bn per month until year end). Draghi also noted that underlying inflation remains subdued despite the increasingly solid recovery in activity. His comment that QE may have more side-effects than negative interest rates would seem to imply that he is not an advocate of changing the outlined sequencing (i.e. rates will rise sometime after QE ends subject to inflation recovering). The Bank of Canada maintained its benchmark interest rate at 0.5%, noting that monetary policy “stimulus is appropriate at present.” Canada’s adjustment to the oil price decline is “largely complete”. Markets took the slight shift in language as a move to a less dovish tone and the balance of risks shifting towards hikes as opposed to cuts."

After an unsuccessful attempt to break above the 1.12 handle at the beginning of the NA session, the EUR/USD pair gathered momentum and rose to 1.1220

After an unsuccessful attempt to break above the 1.12 handle at the beginning of the NA session, the EUR/USD pair gathered momentum and rose to 1.1220 following the release of the FOMC meeting minutes. As of writing, the pair is trading at 1.1218, holding on to its daily gains. The general assessment of the economy was largely unchanged according to the minutes as the members saw the job market strong and the consumer confidence solid. On the other hand, policymakers agreed that they need to see the data to continue to improve to verify that the recent slowdown in the economic activity was temporary. Although the expectations of a June rate hike solidified above 80% according to the CME Group FedWatch, the probability of two more rate hikes in 2017 eased to 46% from 50%, pushing the US Dollar Index below 97. As of writing, the index was down 0.34% on the day, at 96.95.CME Group FedWatch suggests traders still see high probability of June hikeTomorrow's economic docket will feature the weekly initial jobless claims, wholesale inventories and the trade balance data from the United States and strong readings could allow the investors to start pricing the possibility of two more rate hikes in 2017, helping the greenback recover its recent losses.Technical outlookThe immediate resistance for the pair could be seen at 1.1265 (May 23 high) before 1.1300 (Nov. 9 high) and 1.1365 (Aug. 18 high). To the downside, supports are located at 1.1200 (psychological level), 1.1170 (daily low) and 1.1100 (May 19 low).Forex today: FOMC no surprises in minutes, DXY and 10-y US yields lower, stocks higher

After starting the day higher, the major equity indexes in the U.S. were able to hold on to their gains after the May 2-3 FOMC meeting minutes showed

After starting the day higher, the major equity indexes in the U.S. were able to hold on to their gains after the May 2-3 FOMC meeting minutes showed that the policymakers are likely to stay on hold on rate hikes as they need to make sure that the recent U.S. economic slowdown is transitory. Furthermore, the members also reiterated that the consumer confidence remained high, boosting the market sentiment.Forex today: FOMC no surprises in minutes, DXY and 10-y US yields lower, stocks higherThe Dow Jones Industrial Average added 74.51 points, or 0.36%, to 21,012.42, the S&P 500 was up 5.25 points, or 0.22%, closing at its record high at 2,403.25 and the Nasdaq Composite gained 24.31 points, or 0.40%, to 6,163.02. Commenting on the FOMC minutes, "absent a material slowdown in the economy, Federal Reserve officials, acknowledging support from strengthening global growth, appear poised to stay on track toward interest rate normalization," Quincy Krosby, chief market strategist at Prudential Financial, told Reuters.Headlines from the U.S. session:US debt limit next major risk factor? - NomuraU.S. Treasury's Mnuchin urges congress to raise debt limit prior to August breakCME Group FedWatch suggests traders still see high probability of June hikeUS Dollar pushes lower toward 97 on FOMC minutesFOMC minutes: Fed policymakers agreed that details of balance sheet plan should be announced soonUS Existing Home Sale: Down in April, up 4.1% so far 2017 - Wells FargoInsights: Trump administration’s proposed FY 2018 budget - NomuraFive takeaways from Trump's first budget - BBH