Talking Points:
Euro to Look Past CPI Data as Markets Await Launch of ECB QE Program
US Dollar May Decline if Soft ISM Data Undermines Fed Rate Hike Outlook
Canadian Dollar Gains, Aussie Drops Before BOC and RBA Policy Meetings
Eurozone flash CPI data headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to remain in negative territory, showing a 0.5 percent drawdown in February following a 0.6 percent decline in the prior month. The outcome is unlikely to trigger a meaningful response the Euro considering its limited implications for near-term ECB policy outlook as the central bank prepares to launch QE this month.
Later in the day, the spotlight turns to February’sISM Manufacturingfigures. The report is expected to show that factory-sector activity growth slowed for a fourth consecutive month. US news-flow has tended to underperform relative to forecasts in recent months, warning of a larger mark-down in the cards. Such a result may trim Fed interest rate hike expectations and weigh on the US Dollar.
The Canadian Dollar outperformed in overnight trade, rising as much as 0.4 percent on average against its leading counterparts. The move may have reflected pre-positioning ahead of this week’s Bank of Canada monetary policy announcement. Expectations call for officials to hold rates unchanged at 0.75 percent after a surprise 25bps cut at last month’s sit-down. A similarly preemptive logic may have been at play as the Australian Dollar faced selling pressure, with the RBA expected to expand stimulus this week.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
1:00
CNY
Mfg PMI (FEB)
49.9
49.7
49.8
1:00
CNY
Non-Mfg PMI (FEB)
53.9
–
53.7
21:45
NZD
Terms of Trade Index (QoQ) (4Q)
-1.9%
-3.0%
-4.5%
22:00
AUD
AiG Perf of Mfg Index (FEB)
45.4
–
49
23:00
AUD
CoreLogic RP Data House Px (MoM) (FEB)
0.3%
–
1.3%
23:30
AUD
TD Securities Inflation (MoM)(FEB)
0.0%
–
0.1%
23:30
AUD
TD Securities Inflation (YoY) (FEB)
1.3%
–
1.5%
23:50
JPY
Capital Spending (YoY) (4Q)
2.8%
4.0%
5.5%
23:50
JPY
Capital Spending Ex Software (4Q)
3.9%
5.0%
5.6%
23:50
JPY
Company Profits (4Q)
11.6%
–
7.6%
23:50
JPY
Company Sales (4Q)
2.4%
–
2.9%
0:00
AUD
HIA New Home Sales (MoM) (JAN)
1.8%
–
-1.9%
0:30
AUD
Company Operating Profit (QoQ) (4Q)
-0.2%
0.5%
-0.4%
0:30
AUD
Inventories SA (QoQ) (4Q)
-0.8%
0.1%
1.2%
1:35
JPY
Markit/JMMA Japan Mfg PMI (FEB F)
51.6
–
51.5
1:45
CNY
HSBC China Mfg PMI (FEB F)
50.7
50.1
50.1
5:00
JPY
Vehicle Sales (YoY) (FEB)
–
-18.9%
5:30
AUD
Commodity Index (FEB)
–
87.3
5:30
AUD
Commodity Index (YoY) (FEB)
–
-20.4%
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
7:00
GBP
Nationwide House Price (MoM) (FEB)
0.3%
0.3%
Low
7:00
GBP
Nationwide House Price NSA (YoY) (FEB)
6.2%
6.8%
Low
8:00
CHF
SNB Sight Deposits
–
–
Low
8:30
CHF
procure.ch PMI Mfg (FEB)
47.3
48.2
Medium
8:45
EUR
Markit/ADACI Italy Mfg PMI (FEB)
47.3
48.2
Low
8:50
EUR
Markit France Mfg PMI (FEB F)
50.1
49.9
Low
8:55
EUR
Markit/BME Germany Manfg PMI (FEB F)
47.7
47.7
Low
9:00
EUR
Markit Eurozone Mfg PMI (FEB F)
50.9
50.9
Low
9:00
EUR
Italy Unemployment Rate (JAN P)
12.9%
12.9%
Low
9:00
EUR
Italy Unemployment Rate (4Q)
12.9%
12.8%
Low
9:30
GBP
Net Consumer Credit (JAN)
0.9B
0.6B
Low
9:30
GBP
Net Lending Sec. on Dwellings (JAN)
1.7B
1.6B
Low
9:30
GBP
Mortgage Approvals (JAN)
61.0K
60.3K
Medium
9:30
GBP
M4 Money Supply (MoM) (JAN)
–
0.1%
Low
9:30
GBP
M4 Money Supply (YoY) (JAN)
–
-1.1%
Low
9:30
GBP
M4 Ex IOFCs 3M Annualised (JAN)
–
5.0%
Low
9:30
GBP
Markit UK PMI Mfg SA (FEB)
53.3
53
Medium
10:00
EUR
Eurozone Unemployment Rate (JAN)
11.4%
11.4%
Medium
10:00
EUR
Eurozone CPI Estimate (YoY) (FEB)
-0.5%
-0.6%
High
10:00
EUR
Eurozone CPI Core (YoY) (FEB A)
0.6%
0.6%
High
10:00
EUR
Italy GDP Annual (YoY) (2014)
-0.4%
-1.9%
Low
10:00
EUR
Italy Deficit to GDP (2014)
–
2.8%
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.1068
1.1137
1.1166
1.1206
1.1235
1.1275
1.1344
GBPUSD
1.5277
1.5352
1.5395
1.5427
1.5470
1.5502
1.5577
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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