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
FOMC Minutes May Boost US Dollar on Signs of Early Stimulus Unwind
British Pound to Fall if BOE Minutes Hint at Near-Term QE Expansion
The spotlight turns the Federal Reserve as it publishes minutes from January’s FOMC meeting. Traders will be most interested in the tone of discussion surrounding the possible tapering of the size of asset purchases – an approach that has emerged in several Fed officials’ comments over recent weeks – and the possibilities for the timing of such an outcome.
Bond markets suggest investors are pricing in inflation at an average of 2.35 percent over the Fed’s target one- to two-year time horizon, up from 1.47 percent at the beginning of the year. That puts a move above 2.5 percent – the FOMC’s threshold for maintaining the current accommodative posture – well within reach over the coming months. This means Ben Bernanke and company may be pressured to reduce stimulus far earlier than previously expected, boosting the US Dollar.
Minutes from February’s Bank of England policy meeting headline the economic calendar in European hours. Although much of the central bank’s overall position will have been well-telegraphed already by last week’s quarterly inflation report, the vote count for and against additional QE will be interesting. This will help investors gauge the likelihood of additional stimulus in the near term, pre-dating the BOE’s takeover by Governor-designate Mark Carney in the summer. Needless to say, any such cues are likely to further punish the British Pound. We continue to hold short GBPUSD.
Asia Session:
GMT
CCY
EVENT
ACT
EXP
PREV
21:45
NZD
Producer Prices – Outputs (QoQ) (4Q)
-0.1%
–
-0.9%
21:45
NZD
Producer Prices – Inputs (QoQ) (4Q)
-0.3%
–
-1.0%
23:00
AUD
Conference Board Leading Index (DEC)
-0.1%
–
-0.2%
23:30
AUD
Westpac Leading Index (MoM) (DEC)
0.2%
–
0.7% (R+)
23:50
JPY
Merch Trade Balance Total (¥) (JAN)
-1629.4B
-1379.6B
-643.3B (R-)
23:50
JPY
Adj Merch Trade Balance (¥) ) (JAN)
-678.9B
-586.7B
-783.8B (R+)
23:50
JPY
Merchandise Trade Imports (YoY) (JAN)
7.3%
2.1%
1.9%
23:50
JPY
Merchandise Trade Exports (YoY) (JAN)
6.4%
5.6%
-5.8%
0:00
AUD
DEWR Internet Skilled Vacancies (MoM) (JAN)
-0.7%
–
-1.9% (R+)
0:30
AUD
Wage Cost Index (QoQ) (4Q)
0.8%
0.8%
0.7%
0:30
AUD
Wage Cost Index (YoY) (4Q)
3.4%
3.4%
3.7%
2:00
CNY
Actual FDI (YoY) (JAN)
-7.3%
-4.2%
-4.5%
4:30
JPY
All Industry Activity Index (MoM) (DEC)
1.8%
1.7%
-0.4% (R-)
7:00
JPY
Convenience Store Sales (YoY) (JAN)
-0.9%
–
-2.0%
Euro Session:
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
7:00
EUR
German Producer Prices (MoM) (JAN)
0.8% (A)
-0.3%
Medium
7:00
EUR
German Producer Prices (YoY) (JAN)
1.7% (A)
1.5%
Medium
7:00
EUR
German Consumer Price Index (MoM) (JAN F)
-0.5% (A)
-0.5%
Medium
7:00
EUR
German Consumer Price Index (YoY) (JAN F)
1.7% (A)
1.7%
Medium
7:00
EUR
German CPI – EU Harmonised (MoM) (JAN F)
-0.7% (A)
-0.7%
Low
7:00
EUR
German CPI – EU Harmonised (YoY) (JAN F)
1.9% (A)
1.9%
Low
9:30
GBP
Bank of England Releases Feb MPC Minutes
–
–
High
9:30
GBP
Jobless Claims Change (JAN)
-5.5K
-12.1K
High
9:30
GBP
Claimant Count Rate (JAN)
4.8%
4.8%
Medium
9:30
GBP
Employment Change (3M/3M) (DEC)
117K
90K
Medium
9:30
GBP
Average Weekly Earnings (3M/YoY) (DEC)
1.4%
1.5%
Low
9:30
GBP
Weekly Earnings ex Bonus (3M/YoY) (DEC)
1.3%
1.4%
Low
9:30
GBP
ILO Unemployment Rate (3M) (DEC)
7.7%
7.7%
Medium
10:00
CHF
ZEW Survey (Expectations) (FEB)
–
-6.9
Low
Critical Levels:
CCY
SUPPORT
RESISTANCE
EURUSD
1.3346
1.3438
GBPUSD
1.5270
1.5481
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
To be added to Ilya’s e-mail distribution list, please CLICK HERE
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