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Fxwirepro: Usd/jpy Hovers Around 110.00 Mark, G7 Meeting in Focus





USD/JPY is currently trading around 110.05 marks.
It made intraday high at 110.07 and low at 109.84 levels.
Intraday bias remains neutral for the moment.
A daily close above 110.38 is required to take the parity higher towards key resistances around 111.23, 112.60 and 113.42 levels respectively. Alternatively, a sustained break below 109.69 will drag the parity down towards key support area at 108.27, 107.94, 106.15, 105.71, 105.45 and 104.55 levels respectively.
Today G7 meetings are attended by finance ministers and central bankers from 7 industrialized nations - Canada, Italy, France, Germany, Japan, the UK, and the US. A formal statement covering policy shifts and meeting objectives is usually released after the meetings have concluded.


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GM expands car-sharing service to Boston, Chicago, Washington





Car-sharing service Maven of General Motors will also be offered in Boston, Washington D.C., and Chicago, the company said. The service was launched 4 months ago, and has already started offering 30 vehicles at over 15 sites in Chicago for $8 per hour, including gas and insurance, the GM said. The automaker launched the app-based service in January with small fleets in Ann Arbor, Michigan and in Chicago, New York, Frankfurt and Berlin.


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Moody's: Thai Banking System Stable Over the Next 12-18 Months; Strong Loss Buffers and steady Profit





Moody's Investors Service says that the outlook for Thailand's banking system is stable over the next 12-18 months, and reflects primarily the banks' strong loss absorption buffers. "The banks' high provisions and strong capitalization levels--against the backdrop of the slow credit growth environment--will allow them to maintain their credit profiles over the next 12-18 months," says Alka Anbarasu, a Moody's Vice President and Senior Analyst. "However, weak economic growth will remain the system's key operating challenge," adds Anbarasu. Moody's conclusions were contained in its just-released report on Thai banks, entitled, "Strong Loss Buffers and Steady Profits Support Stable Outlook," and is authored by Anbarasu. The stable outlook is based on Moody's assessment of five drivers: Operating Environment (stable); Asset Quality and Capital (deteriorating); Funding and Liquidity (stable); Profitability and Efficiency (stable); and Systemic Support (stable). Moody's baseline scenario assumes that real GDP growth in Thailand will average 2.8% in 2016 and 3.0% in 2017; a subdued pace, given the country's growth potential. Sluggish exports will prove a key driver of the modest growth rate. Moody's report points out that while stimulus measures from the government could provide some countercyclical support, they will do little to address the key domestic challenges that weigh on private demand, including high household leverage, continuing political uncertainty, and the lack of structural improvements for the country's export-oriented manufacturing infrastructure. On the issue of asset quality, Moody's says that the banks will demonstrate a moderately deteriorating asset quality--led by small- and medium-size enterprises (SMEs) and the retail segment--because such borrowers will face the greatest repayment challenges in the weak operating environment. During 2015, some banks saw a jump in their credit costs, owing to the default of a leading steel producer, Sahaviriya Steel Industries Public Company Limited (unrated). Despite the one-off event, Moody's says that over the next 12-18 months, overall corporate loan quality will be stable, supported by the their strong overall debt servicing capacity. In addition, credit costs will remain elevated, as the banks try to shore up their countercyclical buffers amid a more challenging operating environment. Moody's report also says that the banks will see further pressure on their loan incomes from weak demand for credit. Nevertheless, their increasing success in developing non-loan income will help sustain their profits at levels sufficient to meet potential credit costs and maintain their capitalization levels. Another contributor to the banks' resilience is their strong loss absorption buffers, which rank in line with many of its nine peers in the Association of South East Asian Nations. The report points out that Moody's stress test shows the resilience of the Thai banking system. Under a stress scenario--which assumes a jump in non-performing loan ratios to 14% and an increase in credit costs to 4% of loans from the current 1%--Moody's-rated banks would see a drop in their average Tier 1 capital ratio to a passable 9.2% from 12.8% in 2015. As for funding and liquidity, Moody's says such conditions should remain stable in the current slow loan growth environment. Moody's expects that the banks will maintain their loan-to-deposit ratios below 100% over the next 12-18 months. Moody's rates a total of 12 banks in Thailand: nine commercial banks and three policy banks. The nine commercial banks represented 84% of commercial banking system assets at end-2015. Moody's has maintained a stable outlook on the Thai banking system since 2010.


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Sri Lanka’s Interest Rate Remains Untouched Despite Inflation





Sri Lanka's benchmark lending rates were unchanged for the third month in a row with the central bank's optimistic view on the economy despite the alarming pace of the country's inflation rate. The standing lending facility rate still stood at 8 percent while the standing deposit facility rate is at 6.5 percent. Its core inflation, which is based on the Colombo Consumers Price Index (CCPI) rose to 1.3 percent in April from 1.1 percent in the previous month. April's annual headline inflation climbed by 1.1 percent to 3.1 percent from 2.0 percent in March. The Monetary Board estimates that inflation will linger in mid-single digit levels. The island country's economy is seen to grow by 5.8 percent this year from 4.8 percent in 2015 and may even spur to 7 percent in the medium term. The central bank of Sri Lanka recently secured a $1.5 billion extended fund facility loan from the International Monetary Fund. Apart from this, the central bank is also relying on the recent tax increase and more credit facilities on the way to shield the economy from market shocks.


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Usd/twd Heavy, Set to Open Around 32.62





NDFs trade 32.62-68 overnight
Strong equity inflows on Monday; Taiex closed up 2.6%


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US House junks bill requiring entities to disclose phone location





The US House of Representatives rejected a legislation mandating cell phone providers to share a phone's location with authorities in case of emergency. With 229-158, the Kelsey Smith Act failed to strike lawmakers, falling to attain the two-thirds majority necessary to hasten the passage of the bill. Civil liberties groups have strongly opposed the measure, stipulating it would result in a loophole and broadened sovereign surveillance. R Street reiterated phone carriers already have power to disclose phone location details in emergency instances. The legislation, drafted by Kansas Representative Kevin Yoder is named after Kelsey Smith who was suddenly missing as she went to a local Target branch in 2007. Her dead body was found four days later following Verizon disclosed her phone's location data with law enforcers.


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Fxwirepro: Kiwi Gains in Early Asia on the Back of Higher Than expected Trade Balance Data





AUD/NZD is trading around 1.0653 marks.
Pair made intraday high at 1.0667 and low at 1.0634 marks.
Today New Zealand released trade balance data with positive numbers at 292M vs 189M previous release.
Goods exports rose 4.0 percent in April 2016, up $166 million to $4.3 billion, Statistics New Zealand said today. The total value of goods imported in April 2016 was $4.0 billion, up $58 million (1.5 percent). Consumption goods led the rise, up $129 million (14 percent), with increases across a broad range of goods. Intraday bias remains bearish till the time pair holds key resistance at 1.0741 marks.
A daily close below 1.0620 will take the parity down towards key support around 1.0574 (February 12, 2016 low) and 1.0506 marks respectively.
On the other side, a sustained close above 1.0734 will drag the parity higher towards 1.0823/1.0976 (January 2016 high) /1.1062 (30D EMA)/1.1123/1.1298/1.1317 levels respectively.
Important to note here that 20D, 30D and 55D EMA heads down and confirms bearish trend.
We prefer to take short position in AUD/NZD around 1.0670, stop loss 1.0734 and target 1.0574 levels.


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Eurozone approves breakthrough Greece debt relief





Finance ministers in Europe agreed to ease Greece's debt load and extend additional bailout loans, considering the decision a huge development to resolve the debt crisis. The eurozone officials, following 11-hour discussions, voted to provide new loans amounting to €10.3 billion ($11.5 billion). The decision came after the parliament authorized further spending declines and tax increases sought by global creditors. The International Monetary Fund has been particular regarding Greece's public debt, reiterating it is not viable at current levels of around 180% of its annual gross domestic product.


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Fxwirepro: Yen Gains Sharply in Early Asia After Corporate Price Index Data, Intraday Bias Remains Bearish





USD/JPY is currently trading around 109.46 marks.
It made intraday high at 110.23 and low at 109.43 levels.
Today Japan released corporate service price index data with flat numbers at 0.2% m/m as expected.
Intraday bias remains bearish for the moment.
A sustained close above 110.38 is required to take the parity higher towards key resistances around 111.34 (April 05, 2016 high), 112.60 (55D EMA) and 113.42 levels respectively.
Alternatively, a sustained break below 109.17 will drag the parity down towards key supports at 108.72, 107.94, 106.15, 105.71, 105.45 and 104.55 levels respectively.


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Abe to bring G7 leaders to Shinto religion site ahead of summit





Japanese Prime Minister Shinzo Abe was poised to tour Group of Seven leaders to the Shinto religion's holiest location ahead of convention discussing different global economic risks, including China's maritime aggressiveness and refugee crisis.
President Barack Obama and other G7 leaders would visit the grounds of Ise Grand Shrine, dedicated to sun goddess Amaterasu Omikami, direct descendants of emperors of Japan.
The Japanese premier hopes the shrine visit will give an insight to the core of Japanese culture. But critics slammed Abe's move, reiterating he caters the conservative base seeking to revive religion in politics and traditional norms.


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