Friday the 13th

The situation in Iraq has the market nervous as oil rallies 2.8% to a nine-month high on supply concerns.

Meanwhile, equities remain on the back foot as the hunt for yield continues with the proud pound counter-trending the bookies price for England to land the World Cup following the BoE Governor’s speech at Mansion House.

This morning, Carney has the market pricing in a rate hike for December as he acknowledged the fact that rates may have to rise faster than the market had been anticipating, with the first hike possibly coming this year. He stressed that it’s the future rate path that’s the key.

The Governor and the Chancellor both suggested that measures to cool the housing market are imminent as they sight the 10% increase in UK housing as a major threat to financial stability.

The upbeat lending data from China – along with a robust consumer reading in the form of retail sales coming in at 12.5% versus 12.1% as expected – was largely ignored by the market along with the fact that the BoJ kept policy unchanged as expected.

Japan’s Jiji news reported that PM, Shinzo Abe, will announce a corporate tax cut and other tax reform in the very near future.

In Europe, the May CPI reports are due in Germany, Spain and Italy.

In the US, the May PPI report will shed light on the inflation outlook and we’ll receive the first reading on the University of Michigan consumer sentiment survey for June.

EUR/USD

Supports 1.3540-1.3505-1.3480 | Resistance 1.3600-1.3630-1.3680

USD/JPY

Supports 101.55-100.80-100.50  | Resistance 102.10-102.50-102.85

GBP/USD

Supports 1.6950-1.6900-1.6845 | Resistance 1.7000-1.7045-1.7100