AUD: A$ Weighed By AUD/JPY Weakness, Jobs Data In Focus Next Week
AUD/USD dipped towards 0.6810, before sentiment stabilized somewhat. We aren't much higher though at 0.6815/20 currently. AUD/JPY remains the key short term driver. We aren't too far away the days lows, currently tracking at 92.50, as the market contemplates potential shifts in Japan policy settings following the shooting of ex-PM Abe in Japan.
- Elsewhere, equity futures are lower in the US, which has weighed on sentiment, while China equities are struggling to stay positive. Iron ore is also off recent highs, back to a $113 handle, versus +115.50 earlier.
- Yield spreads have maintained steady levels (-42bps for the AU-US 2yr) but haven't been a key driver of sentiment for the currency today.
- Looking ahead, next week's data calendar features the CBA household spending measure, out on Tuesday, along with the Westpac Consumer Confidence print, and the NAB Business survey. Both prints will be important updates from a household and business sentiment standpoint.
- On Thursday inflation expectations are due, along with jobs data for June. The market expects jobs growth of +30k (+60.6k last month) and the unemployment rate to dip to 3.8% from 3.9% last month.
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MNI: SWISS MAY UNEMPLOYMENT -6.1% M/M, -31.4% Y/Y
- MNI: SWISS MAY UNEMPLOYMENT -6.1% M/M, -31.4% Y/Y
- SWISS MAY UNEMPLOYMENT RATE +2.2%
EUROZONE T-BILL ISSUANCE: W/C June 6, 2022
Spain, Belgium, the Netherlands, the ESM, France, Greece and Italy are due to sell bills this week, with total issuance from first round operations estimated at E22.9bln up from E14.7bln last week.
- Spain kicked off bill issuance for the week yesterday selling 6/12-month letras for a combined E4.928bln against a E4.5-5.5bln target: E873mln of 6-month Dec 9, 2022 letras and E4.055bln of the new 12-month Jun 9, 2023 letras.
- Belgium then reopened the 3-month Sep 8, 2022 TC for E1.155bln against a target range of E0.8-1.2bln.
- The Netherlands sold E2.72bln of DTCs against a E2-3bln target: E1.42bln of the 1.5-month Jul 28, 2022 DTC and E1.30bln of the 5-month Oct 28, 2022 DTC.
- The ESM then sold E1.056bln of the new 3-month Sep 8, 2022 bill against a target of up to E1.1bln.
- France wrapped up yesterday’s issuance, selling E5.894bln of BTFs, the top of the target range: E3.498bln of the 12-week Aug 31, 2022 BTF, E1.497bln of the new 23-week Nov 16, 2022 BTF and E0.899bln of the 49-week May 17, 2023 BTF.
- Finland’s Tuesday auction was cancelled.
- Today, Greece will come to the market with E1.0bln of the new 52-week Jun 9, 2023 GTB on offer.
- Italy will conclude issuance for the week on Friday with E6.5bln of the new 12-month Jun 14, 2023 BOT on offer. Note also that, Italy announced this week that it would cancel the 6-month BOT auction scheduled for 28 June.
EURGBP TECHS: Pullback Considered Corrective
- RES 4: 0.8658 High Sep 29 2021
- RES 3: 0.8643 High Sep 30 2021
- RES 2: 0.8619 High May 12 and bull trigger
- RES 1: 0.8590 High Jun 6
- PRICE: 0.8503 @ 06:37 BST Jun 8
- SUP 1: 0.8462/8433 50-day EMA / Low May 23
- SUP 2: 0.8393/ 0.8391 Low May 17 / 61.8% of Apr 14 - May 12 upleg
- SUP 3: 0.8367 Low May 2
- SUP 4: 0.8337 76.4% retracement of the Apr 14 - May 12 upleg
EURGBP reversed course Tuesday and is trading at this week’s lows. The pullback is, for now, considered corrective. The recovery from the May 17 low of 0.8393 highlights a bullish theme and attention is on 0.8619, May 12 high and the next key hurdle for bulls. Clearance of this level would resume the uptrend that started Mar 7. Key short-term support is unchanged at 0.8393, May 17 low. A break would alter the picture.
