NZD: Asia Wrap - NZD/USD Holding Above 0.6000 Support For Now

The BBDXY has had a range of 1208.71 - 1212.46 in the Asia-Pac session, it is currently trading around 1211. “Rachel Reeves will announce a “housing bank” as early as Wednesday to deliver cheaper financing to housebuilders, the FT reported”(BBG). “Thames Water’s senior creditors submitted a rescue plan to the UK’s water industry regulator, envisaging £5 billion of fresh funds and hefty losses for the utility’s debt holders.”(BBG)

• EUR/USD -  Asian range 1.1386 - 1.1436, Asia is currently trading 1.1395. EUR has drifted lower during the Asian session as the USD bounces in response to the move higher in US stocks. Dips should continue to find demand, first support around 1.1350 then the 1.1100/1200 area.
• GBP/USD - Asian range 1.3520 - 1.3564, Asia is currently dealing around 1.3535. The GBP is attempting another run higher but is struggling to gain any momentum above the pivotal 1.3500 weekly pivot. Support seen back towards 1.3400 and then 1.3200.
• USD/CNH - Asian range 7.1778 - 7.1864, the USD/CNY fix printed 7.1840. Asia is currently dealing around 7.1860. Sellers should be around on bounces while price holds below the 7.2500 area. 
• Cross asset : SPX +0.35%, Gold $3303, US 10-Year 4.48%, BBDXY 1211, Crude oil $65.41

• Data/Events : Italy Industrial Production

  Fig 1: GBP/USD Spot Daily Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P

The Asia-Pac USD/JPY range has been 144.40 - 145.29, Asia is currently trading around 144.95. USD/JPY had a pop higher just after the Japanese Fix as Ueda said Japan’s price trend still has some way to go to reach their 2% target.

•  BoJ Governor Ueda has been before parliament, answering questions from lawmakers. The Governor noted limited policy space on the downside, given the current 0.50% policy rate. This is if a fresh stimulus is needed. The real rate is being kept sub 0% to stimulate the economy further, as Ueda states that Japan is still some distance from the 2% inflation objective. Ueda reiterated that they will raise rates if they have confidence in achieving the 2% target.
• "KATO: SEEKING MORE JGB HOLDINGS BY DOMESTIC INVESTORS, WILL MAKE EFFORTS TOWARD APPROPRIATE JGB MANAGEMENT. CRUCIAL TO SEEK JGB HOLDINGS BY DIVERSE GROUPS" - BBG
• Demand seen again today in USD/JPY as risk continues to outperform, large option interest around these levels could see it do some work around here.
• The market still seems very confident of a move lower in USD/JPY but with positioning quite large now we have seen the risk of pullbacks increase.
• With the failure to break below 142.00 last week, price is back in its recent 142.00 - 147.00 range and will need a break either side of that to get a clearer direction. US CPI tomorrow will potentially have a say.
• Options : Close significant option expiries for NY cut, based on DTCC data: 144.00($708m), 143.30($618m). Upcoming Close Strikes : 143.00($1.28b June 12), 140.00($1.22b June 12), 144.00($1.19b June 13), 145.00($4.37b June 16).

• CFTC data shows Asset managers maintained their already extensive JPY longs, and leveraged funds are trying again to build their own longs.

  Fig 1 : USD/JPY Spot Daily Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P

The NZD/USD had a range of 0.6028 - 0.6059 in the Asia-Pac session, going into the London open trading around 0.6055. The NZD continues to find demand on dips as Stocks have had a good session. NZD/USD looking to hold the 0.6050 area and press onwards to new highs.

• (Bloomberg) -- “Economists at ANZ Bank New Zealand and ASB Bank have raised their 1q economic growth forecasts, adding to signs the RBNZ may be justified in pausing interest rate hikes next month, according to emailed notes. ANZ expects the June 19 report will show GDP grew 0.7% after provisionally projecting 0.6%.”
• “NZ TREASURY EXPECTS GROWTH IMPULSE FROM NET EXPORTS WILL WANE - BBG.”
• The NZD has found solid demand back towards the 0.6000 area as dips remain well supported, aided by the more positive risk backdrop.
• The support back towards 0.5850 has held very well, and while this continues to hold expect buyers to be around on dips. A clear break above 0.6050/0.6100 could provide the spark for the next leg higher. The market remains short and above here they could be forced to pare back.
• CFTC Data showed Asset managers maintaining their shorts, while the leverage actually added to their shorts last week.

• AUD/NZD range for the session has been 1.0763 - 1.0797, currently trading 1.0780.  A top looks in place now just above 1.0900, the cross topped out yesterday towards the 1.0800/25 sell area, the first target looks to be around 1.0650.

  Fig 1: NZD/USD Spot Daily Chart

  

  Source: MNI - Market News/Bloomberg Finance L.P