Eur/usd - page 275
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Germany unemployment change May -6k vs -10k exp
-9k prev revised from -8k
Euro love on the wane a little as the session gets into full stride but EURGBP still bid and driving GBPUSD to 1.5182
EURUSD down to 1.0954 EURJPY lower at 136.43
EUR/USD: Euro Zone Returns to Inflation, Pair Edges Closer to $1.10
CPI in the euro zone for May accelerated to 0.3% year-on-year from 0.0% previously and pulled the euro zone out of deflation. The core gauge printed 0.9% and also improved from 0.6% in the last month. Both figures came out above estimates.
The euro edged higher after the release and was seen around $1.0990, 0.6% higher on the day with some possible attacks of the $1.10 barrier later in the session.
Meanwhile, Greek negotiations are continuing in the background with European Central Bank President Mario Draghi, German Chancellor Angela Merkel, IMF chief Christine Lagarde and French President Francois Hollande discussing a proposal for Greece during a meeting in Berlin.
"We maintain the view that Greek headlines can contribute for intra-day volatility in the EUR but will not be setting the trend," BNP Paribas wrote in a note on Tuesday.
Meanwhile, Spain delivered positive labor data as it saw thenumber of unemployed drop by 118,000in May, keeping up the trend seen in the previous month when it dropped by almost 119,000.
Furthermore, German unemployment rate stayed at 6.4% in May, while the unemployment change ticked higher from -9,000 to -6,000. German labor market remains strong.
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Sellers still queueing up to hit the euro rallies
Heavy selling chewed through around 1.1040/50 with more noted to 1.1080
Orders in place on the upside of EURUSD and traders are noting that they are of the interbank and real money variety
A deal headline will likely pop us through these offers anyway but the appetite is still to sell decent rallies. How we perform after a confirmation of another can kick will be important as it looks like traders are lining up to smash a back a big euro pop
Euro-Area Prices Rise in Relief for ECB After Deflation Scare
Euro-area consumer prices rose for the first time in six months in May, providing respite for European Central Bank policy makers after a deflation scare drove them to unleash a trillion-euro stimulus program.
The 0.3 percent annual increase exceeded the 0.2 percent median forecast of economists in a Bloomberg News survey. Core inflation accelerated to 0.9 percent, the fastest in nine months, the European Union’s statistics office in Luxembourg said on Tuesday.
Improving inflation numbers across the euro area are largely due to a rebound in the price of oil since the beginning of the year. While the upturn may be reflected in ECB policy makers’ assessment when they gather in Frankfurt this week, they’ll also have to take into account that inflation still remains well below their goal of just under 2 percent.
“While this strengthening of inflation is good news, it is too early to tell whether we really have inflation lift-off,” said Teunis Brosens, a senior economist at ING Bank NV in Amsterdam, citing weak selling-price expectations in surveys last month. “More data is needed to confirm the return of some healthy inflation.”
The euro remained higher against the dollar after the data were published. It extended its advance on reports that creditor institutions are wrapping up a new proposal aimed at breaking a deadlock in the Greek bailout talks. The single currency traded at $1.1030 as of 12:03 p.m. London time, up 0.9 percent on the day.
ECB Goal
The ECB is in the early days of a 1.1 trillion-euro stimulus ($1.2 trillion) program that policy makers intend to run the program until at least September 2016.
The central bank’s latest projections foresee an average inflation rate of zero this year, rising to 1.8 percent by 2017. ECB President Mario Draghi will update those forecasts on Wednesday after a Governing Council meeting in Frankfurt at which the Greek debt crisis is expected to dominate the agenda.
Greece’s government, which is trying to secure more bailout funds, is due to make a 300 million-euro payment to the International Monetary Fund on June 5, as part of a wider 1.6 billion euros owed before the end of the month. With those payments looming, European leaders and the head of the IMF agreed to step up the intensity of talks over Greece’s fate after an extraordinary late night meeting in Berlin.
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Good move by the euro, i hope it lasts.
Higher inflation sets German yields for biggest jump in 3 years
German Bund yields made their biggest daily leap in about three years on Tuesday, while Spanish, Italian and Portuguese yields hit 2015 highs after data showed inflation was higher than forecast in May.
Consumer prices in the 19-nation currency bloc rose 0.3 percent year-on-year last month after a flat reading in April, beating market expectations of a 0.2 percent increase.
Inflation expectations for the currency bloc have picked up recently, partly due to rebounding oil prices, triggering last month's global bond market rout as investors reassessed record low yields. The data comes a day before a European Central Bank policy meeting which is expected to give the latest view on the bank's trillion euro asset purchase programme, launched in March to revive inflation and the economy.
"The inflation data supports the fundamental argument that ECB QE (quantitative easing) has perhaps had more success in terms of engendering reflation than many had anticipated," said Rabobank senior fixed income strategist Richard McGuire.
"This is an ongoing repositioning post the May rout. The yield moves are exacerbated by limited liquidity pointing to the fact that there may be additional investors that have yet to exit bullish positions."
German Bund yields rose 16 basis points to 0.68 percent. Similar daily moves pushed 10-year Spanish yields as high as 2.09 percent, Italian yields to 2.11 percent and Portuguese yields to 2.89 percent - all three hitting 2015 highs.
Spain sold 5 billion euros of a 10-year bond. Orders were in excess of 14.6 billion euros, a lead manager told IFR, a Thomson Reuters news and market analysis service.
German yields are now less than 15 bps from 2015 peaks reached early last month in the broad-based selloff that only lost steam after ECB policymaker Benoit Coeure said the bank would step up asset purchases in May and June.
The euro five-year, five-year breakeven forward rate , which shows where markets expect inflation forecasts for 2025 to be at the start of 2020, traded up 5 bps to 1.77 percent.
GREEK PROSPECTS
Greek yields were the outlier on Tuesday, falling on prospects of a breakthrough in cash-for-reform talks between Athens and its international creditors.
Greece's lenders are close to finishing a draft agreement to put to the leftist government in Athens, a source close to the talks said.
The move injected new momentum into long-running negotiations to release aid to keep Greece solvent. Hours earlier, Greek Prime Minister Alexis Tsipras said Athens had submitted its own proposal to lenders.
The leaders of Germany, France, the International Monetary Fund, the ECB and the European Commission met late on Monday to find solutions to the Greek crisis.
"The fact that five such political and financial heavyweights met about Greece means they are trying to force a break in the political deadlock and that's a positive development that's likely to lift risk sentiment. But we will have to wait to see the Greek reaction," said KBC strategist Mathias van der Jeugt.
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EUR / USD had a bearish trend yesterday and bottomed at 1.0886. Trade signals show downward movement in order to test 1.0850 - 1.0800. The nearest resistance could be around 1.0965. A clear break above that area could lead price to neutral zone testing 1.1000 - 1.1050. A bearish scenario at this phase is very possible and any upward pressure should be seen as an opportunity to short positions around 1.0670.
EUR/USD had a good jump today 200 pips once 1.0900 was broken and now price is rebounding from resistance 1.1180 in the end of the day.
On yesterday session the EURUSD rallied over 200 pips through a series of fundamental and technical catalysts and closed near the high of the day with a wide range day. The currency is now trading in a resistance zone, from 1.1097 up to 1.1236, so today we may expect a narrow range day consolidating the previous day move.
Euro dips ahead of ECB press conference
The euro slid lower against the dollar on Wednesday as investors turned their attention to the European Central Bank press conference later in the day, but losses were held in check by upbeat euro area economic data and hopes for a breakthrough on a debt deal for Greece.
EUR/USD slid 0.22% to 1.1126 off the one-and-a-half week highs of 1.1193 hit on Tuesday. The pair ended that session up 2.08%.
The single currency edged lower amid caution ahead of the ECB monetary policy announcement and press conference later in the day.
The euro remained supported after data released on Wednesday showed that euro area retail sales rebounded 0.7% in April and were up 2.2% from a year earlier.
Another report showed that the region’s unemployment rate fell to 11.1% in April from 11.2% in March.
The reports came a day after data showing that euro zone consumer prices rose for the first time in six months in May, adding to signs that the recovery in the region is gaining momentum.
Demand for the single currency was also underpinned by hopes that Greece will soon reach an agreement with its international lenders on a cash-for-reforms deal.
On Tuesday, Greece's international lenders drafted an agreement to present to Athens in a bid to make a breakthrough in protracted negotiations and release financial aid before the country runs out of money.
Greece is due to make a €305 million payment to the International Monetary Fund on Friday but has warned that it will be unable to make the repayment if a deal is not reached by then.
Elsewhere, the euro eased back from five-month highs against the yen, with EUR/JPY at 138.33, off Tuesday’s peaks of 138.86.
The dollar pushed higher after weakening across the board when data on Tuesday showing that U.S. factory orders unexpectedly fell in April sparked fears the growth could struggle to pick up in the current quarter after a weak first quarter.
USD/JPY was up 0.2% to 124.35, holding below Tuesday’s 12-and-a-half-year highs of 125.06.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.26% to 96.25, off overnight lows of 95.69.
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