Early Focus on German Banks, CFTC Data

Press reports about German banks and Merkel's flagging popularity threaten the euro. The best performer last week was the yen while the dollar lagged. A busy week of economic news begins with Japanese retail sales.Early moves in the market are miniscule but traders could focus on German banks and politics.

Der Spiegel reported on Sunday that several German banks face new write-offs and may need to raise more capital. They did not cite sources but said the prolonged shipping downturn has hurt some German banks. Also in Germany, a Enmid poll and of German elections on Sept 22 showed Merkel's coalition trailing a coalition of opposition parties by one point.

The week begins with the Japanese June retail sales report at 2350 GMT. The consumer has been unexpectedly strong this year and June numbers are expected to continue the trend with a 0.8% m/m rise.

The bigger question for Japanese consumers is whether Abe will go forward with a sales tax hike planned for April. Following his election win last week, he said it will be a “difficult decision.” Which countered his prior statements that the tax will go ahead.

Commitments of Traders

Speculative net futures trader positions as of the close on Tuesday. Net short denoted by - long by +.

EUR -28K vs -37K prior JPY -87K vs -86K prior GBP -50K vs -37K prior AUD -64K vs -70K prior CAD -17K vs -20K prior NZD -2K vs -3K prior CHF -5K vs -5K prior US Dollar Index longs at 28K vs 29K prior