Euro May Fall as German ZEW Disappoints, Yen Gains on BOJ

The Euro may fall if Germany’s ZEW investor confidence gauge disappoints expectations. The Yen rose after the BOJ released minutes from January’s meeting.

Talking Points

Euro May Fall as Italy, Spain Jitters Undermine German ZEW Data
Yen Rebounds as BOJ Minutes Hint Economy May Have Bottomed

The German ZEW Survey of investor confidence headlines the economic calendar. Economists are looking for sentiment to improve for the third consecutive month, with the forward-looking Expectations gauge to hit the highest level since May 2010. The improvement in the ZEW survey since mid-2012 has closely tracked the drop in Italian and Spanish bond yields as sovereign instability fears eased after the ECB introduced its OMT bond-buying scheme. Borrowing have started to creep higher over recent weeks however as corruption allegations against Spanish Premier Mariano Rajoy and the re-emergence of Silvio Berlusconi as real contender for the leadership position in Italy spooked investors. With that in mind, a downside surprise that weighs on the Euro is not out of the question today.

The Japanese Yen outperformed in overnight trade, adding as much as 0.6 percent against its top counterparts, as minutes from January’s Bank of Japan policy meeting struck a curiously positive tone. Officials seemed to suggest the economy has found a bottom, saying growth would level for the time bring and return to a moderate recovery thereafter. Meanwhile, a few BOJ members suggested it was questionable whether the government and the central bank shared a common view of the economy. These comments seemed to relatively cap stimulus expectations, allowing the Japanese unit to recover.

Asia Session:

GMT

CCY

EVENT

ACT

EXP

23:50

JPY

BOJ Jan. 21-22 Meeting Minutes

–

0:30

AUD

RBA February Meeting Minutes

–

5:00

JPY

Leading Index (DEC F)

93.4

–

93.4

5:00

JPY

Coincident Index (DEC F)

92.6

–

92.7

5:30

JPY

Tokyo Department Store Sales (YoY) (JAN)

0.5%

–

-1.1%

5:30

JPY

Nationwide Department Store Sales (YoY) (JAN)

0.2%

–

-1.3%

Euro Session:

GMT

CCY

EVENT

EXP/ACT

IMPACT