Talking Points:
Euro May See Added Selling Pressure if Eurozone CPI Falls Short of Forecasts
US Dollar Looks Toward Pickup in UofM Consumer Confidence to Fuel Gains
Yen Gains, Commodity Dollars Decline as Risk Aversion Sweeps Asian Markets
The preliminary set of January’s Eurozone CPI figures headlines the economic calendar in European hours. Expectations call for the headline year-on-year inflation rate to rise to 0.9 percent, reversing the drop to 0.8 percent recorded in December to match November’s print.
The analogous report from Germany disappointed as expected yesterday, driving the Euro lower amid speculation about a forthcoming expansion of ECB stimulus efforts. More of the same seems likely this time around. Indeed, the latest set of leading PMI data continued to stress that “deflationary forces are clearly a concernin many [Euro area] countries.” We remain short EURUSD.
Later in the day, the spotlight turns to the final revision of January’sUniversity of Michigan gauge of US Consumer Confidence. An upward revision is expected, which may help support Treasury yields as well as the US Dollar as traders look ahead to continued tapering of the Fed’s QE asset purchases. The analogous report from the Conference Board produced a better-than-expected sentiment reading earlier in the week, bolstering the case for an upbeat outcome.
The Japanese Yen outperformed on the back of safe-haven capital inflows while the sentiment-geared Australian, Canadian and New Zealand Dollars faced outsized selling pressure as risk aversion gripped financial markets in overnight trade. The MSCI Asia Pacific regional benchmark stock index fell 1.5 percent.
New to FX? START HERE!
Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
21:45
NZD
Trade Balance (NZ$) (DEC)
523M
500M
183M
21:45
NZD
Exports (NZ$) (DEC)
4.76B
4.60B
4.48B
21:45
NZD
Imports (NZ$) (DEC)
4.24B
4.00B
4.29B
21:45
NZD
Trade Balance YTD (NZ$) (DEC)
-259M
-383M
-248M
23:30
JPY
Household Spending (YoY) (DEC)
0.7%
1.1%
0.2%
23:30
JPY
Jobless Rate (DEC)
3.7%
3.9%
4.0%
23:30
JPY
Job-To-Applicant Ratio (DEC)
1.03
1.01
1.00
23:30
JPY
National CPI (YoY) (DEC)
1.6%
1.5%
1.5%
23:30
JPY
National CPI Ex-Fresh Food (YoY) (DEC)
1.3%
1.2%
1.2%
23:30
JPY
National CPI Ex Food, Energy (YoY) (DEC)
0.7%
0.7%
0.6%
23:30
JPY
Tokyo CPI (YoY) (JAN)
0.7%
0.8%
0.9%
23:30
JPY
Tokyo CPI Ex-Fresh Food (YoY) (JAN)
0.7%
0.7%
0.7%
23:30
JPY
Tokyo CPI Ex Food, Energy (YoY) (JAN)
0.3%
0.4%
0.3%
23:50
JPY
Industrial Production (MoM) (DEC P)
1.1%
1.3%
-0.1%
23:50
JPY
Industrial Production (YoY) (DEC P)
7.3%
7.3%
4.8%
0:05
GBP
GfK Consumer Confidence Survey (JAN)
-7
-12
-13
0:30
AUD
Private Sector Credit (MoM) (DEC)
0.5%
0.4%
0.3%
0:30
AUD
Private Sector Credit (YoY) (DEC)
3.9%
3.7%
3.8%
0:30
AUD
PPI (QoQ) (4Q)
0.2%
–
1.3%
0:30
AUD
PPI (YoY) (4Q)
1.9%
–
1.9%
2:00
NZD
Money Supply M3 (YoY) (DEC)
5.8%
–
6.7%
4:00
JPY
Vehicle Production (YoY) (DEC)
12.2%
–
10.2%
5:00
JPY
Housing Starts (YoY) (DEC)
18.0%
13.6%
14.1%
5:00
JPY
Annualized Housing Starts (DEC)
1.055M
1.000M
1.037M
5:00
JPY
Construction Orders (YoY) (DEC)
4.9%
–
2.2%
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
7:00
EUR
German Retail Sales (YoY) (DEC)
1.9%
1.1%
Medium
7:00
EUR
German Retail Sales (MoM) (DEC)
0.2%
0.8%
Medium
9:00
EUR
Italian Unemployment Rate (DEC P)
12.7%
12.7%
Low
9:30
GBP
Lloyds Business Barometer
–
48
Low
10:00
EUR
Euro-Zone CPI Estimate (YoY) (JAN)
0.9%
0.8%
High
10:00
EUR
Euro-Zone CPI – Core (YoY) (JAN A)
0.9%
0.7%
High
10:00
EUR
Euro-Zone Unemployment Rate (DEC)
12.1%
12.1%
Medium
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.3344
1.3466
1.3510
1.3588
1.3632
1.3710
1.3832
GBP/USD
1.6253
1.6376
1.6430
1.6499
1.6553
1.6622
1.6745
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya’s analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.Learn forex trading with a free practice account and trading charts from FXCM.
Source: Daily fx