Talking Points:

Eurozone PMI Data May Not Fuel Euro as Traders Await ECB Outcome
US Dollar Hopes to Find a Lifeline in Upbeat Trade Figures Fed-Speak
Australian Dollar Little-Changed After Status-Quo RBA Rate Decision

The Euro will look to the final revision of April’s Eurozone PMI data for a catalyst to spark a breakout of congestion as prices tread water against the US Dollar. The regional composite index is expected to confirm preliminary estimates showing manufacturing- and service-sector activity grew at the fastest pace in three years. Upbeat cyclical cues may not have a lasting positive impact on the single currency however as anemic inflation readings continue to fuel ECB stimulus bets. The proximity of this week’s policy announcement from Mario Draghi and company may further undermine conviction, hinting the standstill may for now.

Later in the day, the spotlight will shift to US Trade Balance figures, where the deficit is expected to contract to -$40 billion in March from -$42.3 billion in the prior month. News-flow from the world’s largest economy has increasingly improved relative to expectations since early April, suggesting analysts are under-appreciating the vigor of the US recovery. This opens the door for an upside surprise. Meanwhile, Fed Governor Jeremy Stein is due to speak and is likely to reiterate the central bank’s intention to continue tapering QE asset purchases. It remains to be seen whether this will be enough to boost the US Dollar however, which has struggled to build meaningfully upward despite higher-level upbeat outcomes (notably, last week’s jobs data).

The Australian Dollar was little-changed after the Reserve Bank of Australia (RBA) kept interest rates unchanged at 2.50 percent, as expected. RBA Governor Glenn Stevens reiterated the now-familiar call for a “period of stability” in interest rates. This amounts to the status quo established over recent policy meetings, offering little in terms of ammunition for volatility.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

1:30

AUD

Trade Balance (A$) (MAR)

731M

1200M

1257M

4:30

AUD

RBA Interest Rate Decision

2.50%

European Session

GMT

CCY

EVENT

EXP

IMPACT