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| Action Insight Weekly Report | Markets Snapshot |
Mid-Day Report: Dollar Consolidates But Firm on Jobless ClaimsDollar continues to digest recent gains in early US session. Initial jobless claims stayed below 370k level at 367k in the week ended May 5. Continuing claims also dropped by 40.5k to 3.04m. Trade deficit widened more than expected to USD -50.8b in March while import price index dropped -0.5% mom in April. Canada new housing price index rose 0.3% mom in March while trade surplus was smaller than expected at CAD 0.4b in March. BoE left rates unchanged at 0.50% and kept asset purchase target unchanged at GBP 325b too, as widely expected. No detail was released and focus will turn to quarterly inflation report to be published on May 16 and meeting minutes to be published on May 23. UK industrial production dropped -0.3% mom in March while manufacturing production rose 0.9% mom. In April, the Australian economy added a larger than expected 15.5k jobs, comparing with consensus of -5k drop. Unemployment rate also unexpectedly dropped sharply from 5.2% to 4.9%. China's trade surplus widened in April to$18.4b in March. Import rose a mere 0.3% to $144.8b while exports jumped 4.9% to $163.3b. Both import and export were much weaker than expectation of 10.0% and 8.5% respectively. |
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| Featured Technical Report | |
USD/CHF Mid-Day OutlookDaily Pivots: (S1) 0.9246; (P) 0.9273; (R1) 0.9316; More.... Some consolidations would be seen below 0.9301 temporary top in USD/CHF. But with 0.9194 support intact, further rise is still expected in USD/CHF to 0.9334 resistance. As discussed before, rebound from 0.8930 is likely resuming and break of 0.9334 will confirm this case and pave the way back to 0.9594 high. On the downside, below 0.9194 minor support will dampen the immediate bullish view and turn bias neutral again. |
| Special Reports |
Greece's Exit Less Likely Than Market SpeculationsThe Greek election result has dramatically raised market speculations of the country to exit the Eurozone. However, given that over 70% of voters in Greece prefer the country to retain in the 17-nation bloc and a default on Greek sovereign debts would be disastrous for the official sectors including the IMF, the ECB and the EU. We expect the Syriza party will fail to form a coalition government and trigger another election in June. Whether the Syriza will become the biggest party is uncertain. However, we expect the IMF and the EU will make more concessions with the new government, hoping to resolve the deadlock and alleviating the negative impacts of the current foggy situation. Yet, whether the compromise would resolve the sovereign problems in Greece is not guaranteed. PBOC May Cut RRR After More Rounds Of Reverse ReposChina's 7-day repo rate dropped almost -30bps to settle at 3.34% yesterday amid expectations that the government will inject more liquidity to the market. Although speculations of a RRR reduction before the Labor holiday in early May was in vain, the PBOC did injected RMB 65B in cash through 7-day reverse repo on May 3. Judging from past experience, it is likely that the government will follow up with RRR cut in coming weeks, though increasing the liquidity in the market. |
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Orders and Options Watch | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
US Session: Orders and Options WatchEUR: Although the single currency continued to find decent demand from Asian sovereign names around 1.2920-25 and mixture of bids and stops at 1.2900-10 seems quite safe for now, offers from semi-official names are still noted from 1.2980 up to 1.3000 and more selling interests should emerge around 1.3040-50 with stops building up above 1.3070 and 1.3100. On the downside, stops remain below option barrier at 1.2900 (1.29-1.31 DNT) and fresh demand from same parties are expected at 1.2870-75 and also at 1.2850. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Trade Idea Update: USD/CHF – Buy at 0.9195Dollar’s retreat after yesterday’s resumption of the rise from 0.9043 to 0.9302 suggests consolidation would be seen and pullback to the Ichimoku cloud top (now at 0.9243), then the lower Kumo (now at 0.9229) cannot be ruled out but renewed buying interests should emerge around previous support at 0.9191 and bring another rise later. A break of said resistance would extend the rise from 0.9043 low towards next chart resistance at 0.9335 Trade Idea: EUR/JPY – Sell at 105.00Despite yesterday’s fall to 102.76, as the single currency has rebounded from there, suggesting consolidation would be seen and recovery to 103.90-00 is likely, however, upside should be limited to 104.45 (this week’s high) and renewed selling interests should emerge around 105.00, bring another decline. A break of said support would extend recent fall to 102.00, then 101.50 Candlesticks Intraday Trade Ideas Update Schedule (GMT): Elliott Wave Daily Trade Ideas Update Schedule (GMT): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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