Forex markets are likely to find themselves in consolidation mode as investors brace for Friday’s release of US Nonfarm Payrolls and ISM data.
Talking Points
Euro Unlikely to Find Fireworks in German Unemployment, Inflation Data
S&P 500 Futures Hint Risk Trends to Consolidate Before Friday’s Event Risk
Aussie, Kiwi Dollars Fall While Yen Gains as Stocks Drift Lower Overnight
January’s German Consumer Price Index figures headline the economic calendar in European hours. The headline inflation is expected to fall to 2 percent, down from 2.1 percent in the prior month. The print falls squarely in line with the medium-term trend average and seems unlikely to materially dislodge priced-in ECB monetary policy expectations (absent a major deviation from forecasts). As such, the data’s implications for the Euro are probably limited. The Unemployment report is likewise seen producing generally status-quo results.
The US data docket is also relatively lackluster, suggesting markets may settle into consolidation mode ahead of Friday’s burst of high-profile event risk as the monthly Nonfarm Payrolls and ISM Manufacturing metrics cross the wires. S&P 500 index futures are trading flat in late overnight trade, pointing to flat risk sentiment trends and reinforcing the case for a lull in volatility.
Forex markets traded mostly sideways in Asia. The Australian and New Zealand Dollars narrowly underperformed while the Yen advanced as regional stock exchanges probed slightly lower, weighing on the risk-anchored high yielders while buoying the safety-linked Japanese unit.
Asia Session:
GMT
CCY
EVENT
ACT
EXP
PREV
20:00
NZD
Reserve Bank of New Zealand Rate Decision
2.5%
2.5%
2.5%
23:50
JPY
Industrial Production (MoM) (DEC P)
2.5%
4.1%
-1.4%
23:50
JPY
Industrial Production (YoY) (DEC P)
-7.8%
-5.6%
-5.5%
23:50
JPY
Loans & Discounts Corp (YoY) (DEC)
1.0%
–
0.4%
0:00
AUD
HIA New Home Sales (MoM) (DEC)
6.2%
–
3.0% (R-)
0:01
GBP
GfK Consumer Confidence Survey (JAN)
-26
-28
-29
0:30
AUD
Private Sector Credit (MoM) (DEC)
0.4%
0.2%
0.0%
0:30
AUD
Private Sector Credit (YoY) (DEC)
3.6%
3.4%
3.5%
0:30
AUD
Export Price Index (QoQ) (4Q)
-2.4%
-1.5%
-6.4%
0:30
AUD
Import Price Index (QoQ) (4Q)
0.3%
0.4%
-2.4%
1:30
JPY
Labor Cash Earnings (YoY) (DEC)
-1.4%
–
-0.8% (R+)
2:00
NZD
Money Supply M3 (YoY) (DEC)
6.0%
–
5.5% (R+)
4:00
JPY
Vehicle Production (YoY) (DEC)
-17.2%
–
-8.4%
5:00
JPY
Housing Starts (YoY) (DEC)
10.0%
13.5%
10.3%
5:00
JPY
Annualized Housing Starts (DEC)
0.880M
0.895M
0.906M (R-)
5:00
JPY
Construction Orders (YoY) (DEC)
4.8%
–
-2.1%
Euro Session:
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
7:00
GBP
Nationwide House Prices s.a. (MoM) (JAN)
0.5% (A)
0.0% (R+)
Medium
7:00
GBP
Nationwide House Prices n.s.a. (YoY) (JAN)
0.0% (A)
-1.0%
Medium
7:00
EUR
German Retail Sales (MoM) (DEC)
-1.7% (A)
0.6% (R-)
Medium
7:00
EUR
German Retail Sales (YoY) (DEC)
-4.7% (A)
-0.6% (R+)
Medium
8:00
CHF
SNB Releases 4Q Currency Holdings
–
–
Medium
8:55
EUR
German Unemployment Rate s.a. (JAN)
6.9%
6.9%
High
8:55
EUR
German Unemployment Change (JAN)
8K
3K
High
13:00
EUR
German CPI (MoM) (JAN P)
-0.4%
0.9%
High
13:00
EUR
German CPI (YoY) (JAN P)
2.0%
2.1%
High
13:00
EUR
German CPI – EU Harmonised (MoM) (JAN P)
-0.5%
0.9%
Low
13:00
EUR
German CPI – EU Harmonised (YoY) (JAN P)
2.0%
2.0%
Low
Critical Levels
CCY
SUPPORT
RESISTANCE
EURUSD
1.3504
1.3609
GBPUSD
1.5745
1.5872
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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Source: Daily fx
