The Euro may fall as borrowing costs rise at an Italian bond auction while the British Pound is under pressure before the release of revised fourth-quarter GDP data.
Talking Points
Euro to Fall on Strong Pickup in Italian Borrowing Costs at Bond Auction
British Pound Under Pressure Before Revised Fourth-Quarter GDP Data
Japanese Yen Resumes Rebound as Nikkei Sinks, Boosting Haven Demand
Italy remains in focus as Rome prepares to sell €6.5 billion in 5- and 10-year bonds. Traders will keep a close eye on average yield and bid-to-cover readings, with a marked pickup in borrowing costs and/or a drop in demand likely to be seen as signs of rising sovereign risk amid political uncertainty in the wake of the weekend’s election. Needless to say, such an outcome bodes ill for the Euro.
The British Pound underperformed overnight – losing as much as 0.4 percent – as markets awaited revised fourth-quarter UK GDP figures. Expectations call for confirmation of the initially estimated 0.3 contraction. A downgrade may amplify selling pressure as traders build bets on further expansion of BOE stimulus. We continue to hold short GBPUSD.
Meanwhile, the Japanese Yen edged higher, adding as much as 0.5 percent on average against its leading counterparts. The move appeared to reflect regional safe-haven demand as the Nikkei benchmark stock index sank for a second day, sliding 1.3 percent.
Asia Session:
GMT
CCY
EVENT
ACT
EXP
PREV
21:45
NZD
Net Migration s.a. (JAN)
350
–
-80 (R-)
21:45
NZD
Trade Balance (NZ$) (JAN)
–
125M
486M
21:45
NZD
Exports (NZ$) (JAN)
3.35B
3.60B
4.10B
21:45
NZD
Imports (NZ$) (JAN)
3.65B
3.50B
3.57B
21:45
NZD
Trade Balance YTD (NZ$) (JAN)
-1299M
-897M
-1156M
23:50
JPY
Retail Trade (MoM) (JAN)
2.3%
0.9%
0.0%
23:50
JPY
Retail Trade (YoY) (JAN)
-1.1%
-1.5%
0.3%
23:50
JPY
Large Retailers’ Sales (JAN)
-3.5%
-0.8%
0.1%
0:30
AUD
Construction Work Done (4Q)
-0.1%
1.5%
1.9%
Euro Session:
GMT
CCY
EVENT
EXP
PREV
IMPACT
7:00
EUR
German Import Price Index (MoM) (JAN)
0.5%
-0.5%
Low
7:00
EUR
German Import Price Index (YoY) (JAN)
-0.4%
0.3%
Low
7:00
CHF
UBS Consumption Indicator (JNA)
–
1.34
Medium
7:00
EUR
German GfK Consumer Confidence Survey (MAR)
5.9
5.8
Medium
8:00
CHF
KOF Swiss Leading Indicator (FEB)
1.00
1.05
Medium
9:00
EUR
Euro-Zone M3 s.a. (YoY) (JAN)
3.2%
3.3%
Low
9:30
GBP
Gross Domestic Product (QoQ) (4Q P)
-0.3%
-0.3%
High
9:30
GBP
Gross Domestic Product (YoY) (4Q P)
0.0%
0.0%
High
9:30
GBP
Private Consumption (4Q P)
-0.1%
0.4%
Low
9:30
GBP
Government Spending (4Q P)
0.1%
0.8%
Low
9:30
GBP
Gross Fixed Capital Formation (4Q P)
0.2%
-0.2%
Low
9:30
GBP
Exports (4Q P)
-0.8%
1.2%
Low
9:30
GBP
Imports (4Q P)
0.0%
-0.4%
Low
9:30
GBP
Total Business Investment (QoQ) (4Q P)
–
3.8%
Low
9:30
GBP
Total Business Investment (YoY) (4Q P)
–
5.1%
Low
9:30
GBP
Index of Services (MoM) (DEC)
0.0%
0.0%
Low
9:30
GBP
Index of Services (3M/3M) (DEC)
0.1%
0.6%
Low
10:00
EUR
Italy to Sell €6.5B in 5yr and 10yr Bonds
–
–
High
10:00
EUR
Euro-Zone Economic Confidence (FEB)
89.9
89.2
Low
10:00
EUR
Euro-Zone Business Climate Indicator (FEB)
-1.02
-1.09
Low
10:00
EUR
Euro-Zone Industrial Confidence (FEB)
-13.1
-13.9
Low
10:00
EUR
Euro-Zone Consumer Confidence (FEB F)
-23.6
-23.6
Medium
10:00
EUR
Euro-Zone Services Confidence (FEB)
-8.8
-8.8
Low
Critical Levels:
CCY
SUPPORT
RESISTANCE
EURUSD
1.3012
1.3171
GBPUSD
1.5046
1.5191
— 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
New to FX? Watch this Video. For live market updates, visit the Real Time News Feed
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