- German CPI (MoM) (GER, 07:00 GMT)
- German 10-Year Bund Auction (GER, 10:30 GMT)
- Trade Balance (U.S., 13:30 GMT)
- Trade Balance (CAD, 13:30 GMT)
- FOMC Meeting Minutes (U.S., 19:00 GMT)
Job openings increased in May after plunging the prior month, easing concern the U.S. job market was faltering. The number of positions waiting to be filled climbed by 195,000 to 3.64 million, partially countering the 294,000 drop seen in April, the Labor Department said today in Washington. At the same time, confidence among U.S. small companies dropped in June to its lowest point since October, driven by concern that sales and the economy will deteriorate, another report today showed.
European governments laid the groundwork for possible purchases of Italy’s bonds and fast- tracked aid for Spain’s banks, trying to shield the euro area’s third and fourth-largest economies from the resurgent debt crisis. Finance ministers worked out a way for the euro bailout funds to intervene in bond markets and said the first 30 billion euros ($37 billion) of 100 billion euros in rescue loans will start flowing to Spanish banks this month, according to Bloomberg News.
The European Union finance ministers decided to give Spain 30 billion euros to shore up its banks and one extra year to correct its deficit, but Greece, with the E.U. freezing loan payments temporarily, is hunting for 3 billion euros in urgent savings to cover its short-term funding requirements. Speaking to reporters in Brussels after a two-day E.U. finance ministers meeting, Greece's Finance Minister Yiannis Stournaras said the government would have to find another 3 billion euros in savings "urgently" in the coming weeks.
EUR/USD: The EUR/USD was trading in the narrow range of 1.22687 and 1.22431 at the time of writing as investors jumped to the sidelines awaiting the most important risk events for the pair; the Federal Reserve's most recent monetary policy meeting and trade balance data in the U.S. The pair is likely to register some slight fluctuations on the European session as Germany will release its CPI data and will auction € 5B worth in Bunds at 07:00 GMT and 10:30 GMT respectively. Positive data from Germany might push the pair up to test the resistance level of 1.23230. On the contrary, the pair might fall to test the support level of 1.22371. Investors should be prudent as speculations and sentiments ahead of the news in the U.S. might affect the trend of the pair. A wait-and-see approach might be a good strategy on the pair today.
GBP/USD: The GBP/USD was hovering around the 23.6% Fibonacci level of the last falling wave at 1.55184 at the time of writing despite stronger Industrial Production data and a narrowed trade deficit. The pair is likely to fluctuate within the resistance level of 1.55511 and the support level of 1.54775 ahead of the most important events; the trade balance data and Fed’s latest policy meeting today, while the economic calendar is thin with UK-specific data. The GBP will mostly be driven by market sentiments and latest developments in the eurozone. Investors should concentrate on the economic data which will be released in the U.S. to get visibility on the direction of the pair. A wait-and-see strategy is recommended on the GBP/USD.
Gold: The yellow metal was trading higher at 1576.23 at the time of writing after eurozone finance ministers also approved plans to give Spain an extra year to meet deficit-reduction targets and allocate EUR 30 billion in aid for Spain to prop up its banking sector by the end of the month. Gold is likely to fluctuate within the resistance level of 1582.65 and the support level of 1564.52 as investors are waiting for some fundamental news from the U.S. and eurozone as well as China to get more visibility. Speculations that Beijing will eventually stimulate its economy via rate cuts or other easing measures going forward and the news that eurozone finance ministers also approved plans to give Spain an extra year to meet deficit-reduction targets, with the deadline now set at 2014 might push the commodity higher to test the resistance level of 1582.65. However, investors should remain cautious as there might be some market corrections intra-trade and they should closely monitor the economic news from the U.S. to better assess the direction of the commodity.
DAX: DAX was trading at 6408.75 at the time of writing after European governments said they will push as much as 100 billion euros ($123 billion) in emergency loans to shore up Spain’s banks and may move the costs off the Spanish government’s balance sheet. The DAX is likely to fluctuate within the resistance level of 6491.30 and the support level of 6351.59 ahead of German CPI and 10-Year Bund Auction. If better-than-expected data are released then the index might increase to test the resistance level of 6491.30. On the other hand, poor data will drag the DAX down to hover around the support level of 6351.59 before the trade balance data and the Fed policy meeting later in the day. Investors should stay focus on the market.