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Talking Points:

  • US Dollar Rally May Find New Fuel in May’s Retail Sales Report
  • New Zealand Dollar Soars as RBNZ Signals More Rate Hikes Ahead
  • Australian Dollar Edges Lower on First Jobs Loss in Five Months

A quiet economic calendar in European trading hours puts the spotlight on May’s US Retail Sales report. News-flow from the world’s largest economy has increasingly improved relative to expectations since April, hinting analysts are underestimating the recovery’s vigor and opening the door for upside surprises. That opens the door for a rosy outcome to help bolsters investors’ Fed policy outlook, driving the US Dollar higher. Our long-term fundamental outlook continues to call for a stronger greenback.

The New Zealand Dollar soared overnight in the aftermath of the RBNZ monetary policy announcement. The central bank was widely expected to raise the benchmark rate by 25 basis points to 3.25 percent but buyers seized on rhetoric arguing that “inflationary pressures are expected to increase” as a signal of further tightening to come. The Kiwi rose as much as 1.3 percent on average against its leading counterparts.

The Australian Dollar edged downward after a disappointing set of Employment figures. May’s data set showed the economy unexpectedly lost 4,800 jobs, marking the worst print in five months. Economists were forecasting a 10,000 increase ahead of the release. We continue to hold short AUDUSD.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

21:00

NZD

RBNZ Interest Rate Decision

3.25%

3.25%

3.00%

23:01

GBP

RICS House Price Balance (MAY)

57.0%

52.0%

55.0%

23:50

JPY

Machine Orders (MoM) (APR)

-9.1%

-10.8%

19.1%

23:50

JPY

Machine Orders (YoY) (APR)

17.6%

13.3%

16.1%

1:30

AUD

Credit Card Balances (A$) (APR)

49.8B

-

49.8B

1:30

AUD

Credit Card Purchases (A$) (APR)

21.3B

-

23.0B

1:30

AUD

Employment Change (MAY)

-4.8K

10.0K

10.3K

1:30

AUD

Unemployment Rate (MAY)

5.8%

5.8%

5.8%

1:30

AUD

Full-Time Employment Change (MAY)

22.2K

-

13.8K

1:30

AUD

Part-Time Employment Change (MAY)

-27.0K

-

-3.6K

1:30

AUD

Participation Rate (MAY)

64.6%

64.7%

64.7%

2:00

JPY

Tokyo Avg Office Vacancies (MAY)

6.52%

-

6.64%

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

6:00

EUR

German Wholesale Price Index (MoM) (MAY)

-

0.2%

Low

6:00

EUR

German Wholesale Price Index (YoY) (MAY)

-

-1.3%

Low

6:45

EUR

French CPI (MoM) (MAY)

0.1%

0.0%

Medium

6:45

EUR

French CPI (YoY) (MAY)

0.7%

0.7%

Medium

6:45

EUR

French CPI - EU Harmonised (MoM) (MAY)

0.1%

0.0%

Medium

6:45

EUR

French CPI - EU Harmonised (YoY) (MAY)

0.8%

0.8%

Medium

8:00

EUR

ECB Publishes Monthly Report

-

-

Low

9:00

EUR

Eurozone Industrial Production (MoM) (APR)

0.5%

-0.3%

Medium

9:00

EUR

Eurozone Industrial Production (YoY) (APR)

0.9%

-0.1%

Medium

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EUR/USD

1.3467

1.3502

1.3517

1.3537

1.3552

1.3572

1.3607

GBP/USD

1.6633

1.6706

1.6747

1.6779

1.682

1.6852

1.6925

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