Talking Points:
Euro May Fall on ECB Easing Bets as CPI Drops to Lowest in 4 Years
US Dollar May Rise if Yellen Commentary Maintains Hawkish Overtones
Aussie Dollar Underperformed in Asia, Profit-Taking a Possible Driver
March’s preliminary Eurozone CPI report headlines the economic calendar in European hours. Expectations call for the headline year-on-year inflation rate to decline to 0.6 percent, the lowest since November 2009.
Leading cues from March PMI data seemingly bolster the probability of a soft outcome. Weak price growth readings may fuel concerns about continued disinflation and drive speculation about a near-term expansion of ECB stimulus efforts ahead of this week’s ECB policy announcement, weighing on the Euro.
Later in the day, the spotlight will shift to scheduled remarks from Federal Reserve Chair Janet Yellen. She is set to speak at the National Interagency Community Reinvestment Conference. While it is unclear that Yellen’s speech will contain content pertinent to investors’ outlook for Fed monetary policy, the possibility that this is the case exists.
With that in mind, traders will listen carefully to glean the tone of the central bank chief’s rhetoric for confirmation of the relatively hawkish tilt noted following the March FOMC meeting. Needless to say, the presence of such cues is likely to bode well for the US Dollar.
The Australian Dollar underperformed in otherwise quiet overnight trade, sliding as much as 0.2 percent on average against its leading counterparts. A discrete trigger for the move was not readily apparent, hinting weakness may have reflected profit-taking after the Aussie outpaced its G10 FX counterparts to add 1.8 percent against the greenback last week.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
21:45
NZD
Building Permits (MoM) (FEB)
-1.7%
2.0%
-8.6%
23:01
GBP
Hometrack Housing Survey (MoM) (MAR)
0.6%
–
0.7%
23:01
GBP
Hometrack Housing Survey (YoY) (MAR)
5.7%
–
5.4%
23:15
JPY
Markit/JMMA Manufacturing PMI (MAR)
53.9
–
55.5
23:30
AUD
TD Securities Inflation (MOM) (MAR)
0.2%
–
0.2%
23:30
AUD
TD Securities Inflation (YoY) (MAR)
2.7%
–
2.7%
23:50
JPY
Industrial Production (MoM) (FEB P)
-2.3%
0.3%
3.8%
23:50
JPY
Industrial Production (YoY) (FEB P)
6.9%
9.9%
10.3%
0:00
AUD
HIA New Home Sales (MoM) (FEB)
4.6%
–
0.5%
0:00
NZD
ANZ Activity Outlook (MAR)
58.2
–
58.5
0:00
NZD
NBNZ Business Confidence (MAR)
67.3
–
70.8
0:30
AUD
Private Sector Credit (MoM) (FEB)
0.4%
0.4%
0.4%
0:30
AUD
Private Sector Credit (YoY) (FEB)
4.3%
4.3%
4.1%
2:00
NZD
Money Supply M3 (YoY) (FEB)
6.9%
–
7.0%
4:00
JPY
Vehicle Production (YoY) (FEB)
–
–
14.5%
5:00
JPY
Housing Starts (YoY) (FEB)
–
6.1%
12.3%
5:00
JPY
Annualized Housing Starts (FEB)
–
0.968M
0.987M
5:00
JPY
Construction Orders (YoY) (FEB)
–
–
15.2%
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
6:00
EUR
German Retail Sales (MoM) (FEB)
-0.5%
1.7%
Low
6:00
EUR
German Retail Sales (YoY) (FEB)
0.8%
0.9%
Low
6:45
EUR
French GDP (YoY) (4Q F)
0.8%
0.8%
Medium
6:45
EUR
French GDP (QoQ) (4Q F)
0.3%
0.3%
Medium
7:00
CHF
KOF Swiss Leading Indicator (MAR)
2.05
2.03
Low
8:30
GBP
Mortgage Approvals (FEB)
75.0K
76.9K
Medium
8:30
GBP
M4 Money Supply (MoM) (FEB)
–
0.3%
Low
8:30
GBP
M4 Money Supply (YoY) (FEB)
–
-0.3%
Low
8:30
GBP
M4 Ex IOFCs 3M Annualised (FEB)
–
1.6%
Low
8:30
GBP
Net Consumer Credit (FEB)
0.7B
0.7B
Low
8:30
GBP
Net Lending Sec. on Dwellings (FEB)
1.4B
1.4B
Low
9:00
EUR
Euro-Zone CPI Estimate (YoY) (MAR)
0.6%
0.8%
High
9:00
EUR
Euro-Zone CPI – Core (YoY) (MAR A)
0.8%
1.0%
High
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.3607
1.3675
1.3713
1.3743
1.3781
1.3811
1.3879
GBP/USD
1.6523
1.6576
1.6607
1.6629
1.6660
1.6682
1.6735
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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