Daily Analysis for MONDAY - JULY 16th

Some USD positive talk about the shrinking budget deficit
The question is if the low issuance of US debt papers could provide some support for the declining USD. European stocks still not able to close at new highs. S&P 500 close to all-time high, 1552.87.
Overnight News Bullets FR CPI MoM/YoY (JUN) out at 0.1%/1.2%, while 0.2%/0.1% expected, 0.3%/1.1% prior. US Import Price Index MoM/YoY (JUN) out at 1.0%/2.3%, while 0.95/1.1% prior. US Advance Retail Sales (JUN) out at -0.9%, while -0.1% expected, 1.4% prior. US Retail Sales Less Autos (JUN) out at -0.4%, while 0.2% expected, 1.3% prior. US University of Michigan Confidence (JUL) out at 92.4, while 86.0 expected, 85.3 prior. US Business Inventories (MAY) out at 0.5%, while 0.3% expected, 0.4% prior. UK Leading Indicator Index MoM (MAY) out at 0.1%, while 0.6% prior. UK Coincident Index MoM (MAY) out at 0.2%, while 0.1% prior. US Baker Hughes U.S. Rig Count out at 1791, while 1752 prior. NZ Consumer Prices QoQ/YoY (2Q) out at 1.0%/2.0%, while 0.8%/1.8% expected, 0.5%/2.5% prior. NZ Food Prices MoM (JUN) out at 0.0%, while 0.3% prior. Markets FX: JPY strength, USD/majors marginally weaker, but remains range bound. O/N Data Heat map: EU US JP UK SZ AU CA NZ NO SE FR - - - Calendar Today's Highlights: Time (GMT) Region Release Consensus 08:00 NO Trade Balance (JUN) 26.1B 08:00 NO Exports / Imports (JUN) Prior 66.4B / 39.4B 09:00 EC Euro-Zone CPI MoM / YoY (JUN) 0.1% / 1.9% 09:00 EC Euro-Zone CPI Core YoY (JUN) 1.9% 12:30 CA New Motor Vehicle Sales MoM (MAY) 0.0% 12:30 CA Manufacturing Shipments MoM (MAY) 0.4% 12:30 US Manufacturing Shipments MoM (MAY) 0.4% 23:50 JN Tertiary Industry Index MoM (MAY) 0.25 This and Next Week’s Highlights: Date Region Release 17 July AU Preliminary BoP Imports. 17 July JN Tokyo Condominimum Sales, Cabinet Office July Monthly Economic Report, BoJ Monetary Policy Meeting Minutes for June. 17 July UK A string of CPI’s, Retail Price Index. 17 July GE ZEW Survey (Econ. Sentiment). 17 July EC ZEW Survey (Econ. Sentiment). 17 July US A string of PPI’s, Net Long-term TIC Flows, Total Net TIC Flows, Industrial Production, Capacity Utilization, IBD/TIPP Economic Optimism, NAHB Housing Market Index, ABC Consumer Confidence, FED’s Hoenig Speaks on U.S. Economy. 18 July AU Westpac Leading Index. 18 July JN Leading Economic Index, Coincident Index, Machine Tool Orders, All Industry Activity Index. 18 July UK BoE Minutes, Claimant Count Rate, Jobless Claims Change, Avg. Earnings inc. bonus 3M/YoY, Avg. Earnings ex. Bonus 3M/YoY, ILO Unemployment Rate 3mths, Manual Unit Wage Costs 3mths. 18 July EC Euro-Zone Trade Balance, Construction Output. 18 July US MBA Mortgage Applications, A string of CPI’s, Housing Starts, Building Permits, Bernanke speaks on the U.S. Economy, DOE U.S. Crude Oil Inventories. 18 July CA A string of CPI’s, Leading Indicators. What's going on? Most FX crosses are ranging, going into a data-light session. EURUSD didn’t manage to close above 1.38 and we could see some retracement today. FX USDCHF has broken key trend line support. EUR USD JPY GBP CHF AUD CAD NZD NOK SEK PLN + - + + FX Trading Strategies Pair Supp. Resis. Comments USDCHF 1.1985 1.2100 The pair closed below 1.2047 61% retracement (from 1.1281-1.3286), which opens up for accelerated downside and test of 1.1880 support. Sell the break of 1.1980 stop at 1.2022 target 1.1885.

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