Talking Points:
British Pound May Not Find Fuel in Bank of England Policy Announcement
Yen Declines, Aussie and NZ Dollars Gain as Risk Appetite Swells Overnight
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A monetary policy announcement from the Bank of England headlines the economic calendar in European trading hours. While UK economic news-flow has cautiously improved since December’s sit-down, the outlook is not so robust as to expect the hawks to build the voting majority needed to produce a hike. Indeed, futures pricing implies the first increase in the benchmark lending rate will not arrive until the fourth quarter. The BOE typically doesn’t publish a statement when policy is left unchanged, so today’s announcement will probably amount to a non-event for the British Pound.
The safety-linked Japanese Yen slumped while the sentiment-geared Australian and New Zealand Dollars staged an impressive advance in overnight trade as risk appetite firmed. The MSCI Asia Pacific regional benchmark stock index rose 1.2 percent. The move appeared to follow on from a recovery on Wall Street, where the S&P 500 snapped a losing streak to produce the largest advance in three weeks. The move higher appeared corrective following five days consecutive down days rather than inspired by minutes from December’s FOMC meeting or an upbeat set of economic data outcomes, as the newswires suggested.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
0:30
AUD
Building Approvals (MoM) (NOV)
7.5%
-3.0%
11.5%
0:30
AUD
Building Approvals (YoY) (NOV)
10.1%
1.2%
2.1%
2:00
JPY
Tokyo Avg Office Vacancies (%) (DEC)
5.47
–
5.55
5:30
AUD
Foreign Reserves (A$) (DEC)
65.7B
–
61.7B
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
7:00
EUR
German Factory Orders n.s.a. (YoY) (NOV)
-0.4% (A)
2.4%
Medium
7:00
EUR
German Factory Orders s.a. (MoM) (NOV)
-2.4% (A)
2.5%
Medium
8:00
GBP
Halifax House Prices s.a. (MoM) (DEC)
0.3%
0.4%
Low
8:00
GBP
Halifax House Price (3M/Y) (DEC)
7.6%
8.2%
Low
10:00
EUR
Eurozone PPI (MoM) (NOV)
-0.1%
-0.4%
Low
10:00
EUR
Eurozone PPI (YoY) (NOV)
-1.4%
-1.3%
Low
10:00
EUR
Eurozone Retail Sales (MoM) (NOV)
0.2%
0.4%
Medium
10:00
EUR
Eurozone Retail Sales (YoY) (NOV)
0.2%
1.4%
Medium
10:00
EUR
Eurozone Industrial Confidence (DEC)
-4.0
-4.3
Low
10:00
EUR
Eurozone Business Climate Indicator (DEC)
0.17
0.18
Low
10:00
EUR
Eurozone Services Confidence (DEC)
4.6
4.4
Low
10:00
EUR
Eurozone Economic Confidence (DEC)
101.2
100.8
Low
10:00
EUR
Eurozone Consumer Confidence (DEC F)
-10.9
-10.9
Medium
12:00
GBP
BOE Asset Purchase Target
375B
375B
High
12:00
GBP
Bank of England Rate Decision
0.50%
0.50%
High
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.1656
1.1751
1.1795
1.1846
1.1890
1.1941
1.2036
GBPUSD
1.4905
1.5006
1.5058
1.5107
1.5159
1.5208
1.5309
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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Source: Daily fx