Talking Points:
German Industrial Production, Swiss CPI Likely to Pass Without Fanfare
AQR Cues in the ECB Annual Report May Be Market-Moving for the Euro
Aussie Dollar Down, Japanese Yen Higher as Stocks Drop in Asian Trade
A relatively quiet European economic calendar is headlined by February’s German Industrial Production and March’s Swiss Consumer Price Index figures. The former report is due to the year-on-year output growth rate marginally slowed to 4.7 percent from the 5 percent recorded in February. The latter is set to put the headline inflation rate at -0.1 percent, matching the prior month’s result. Neither release is likely to produce a significant response from price action given their limited implications for traders’ ECB and SNB monetary policy outlook.
The release of the ECB Annual Report may prove of greater note. Traders continue to speculate on the possibility that the deepening disinflation will prompt the central bank to expand monetary stimulus. We’ve argued that Mario Draghi and company are waiting for their Asset Quality Review (AQR) to be well-enough along to reveal the gap in policy transmission that has produced cheap borrowing costs in the interbank space without arresting the slide in lending to the real economy. That will set the stage for crafting an easing effort that repairs or bypasses the hole in the stimulus delivery mechanism. With that in mind, an AQR progress report in the Annual Report may prove market-moving for the Euro.
The Australian Dollar underperformed in otherwise quiet overnight trade, sliding as much as 0.2 percent against its US namesake. The move appeared corrective after the Aussie outperformed against the greenback on Friday in the wake of a mild disappointment on March’s US nonfarm payrolls print. A selloff on Asian stock exchanges likewise didn’t offer any favors to the sentiment-linked survey. The MSCI Asia Pacific regional benchmark index fell 0.5 percent in what looked like playing catch-up to Friday’s selloff on Wall Street. The Japanese Yen traded higher as the risk-off mood bolstered haven demand for the haven currency.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
23:30
AUD
AiG Performance of Construction Index (MAR)
46.2
–
44.2
23:50
JPY
Official Reserve Assets (MAR)
$1279.3B
–
$1288.2B
1:01
NZD
QV House Prices (YoY) (MAR)
8.8%
–
9.3%
1:30
AUD
ANZ Job Advertisements (MoM) (MAR)
1.4%
–
4.7%
5:00
JPY
Leading Index (FEB P)
108.5
108.8
113.1
5:00
JPY
Coincident Index (FEB P)
113.4
113.4
115.2
European Session
GMT
CCY
EVENT
EXP
PREV
IMPACT
6:00
EUR
German Industrial Production (MoM)
0.3%
0.8%
Medium
6:00
EUR
German Industrial Production (YoY)
4.7%
5.0%
Medium
6:30
AUD
Foreign Reserves (A$) (MAR)
–
51.8B
Low
7:00
CHF
Foreign Currency Reserves (MAR)
434.5B
433.5B
Low
7:15
CHF
Consumer Price Index (MoM) (MAR)
0.2%
0.1%
Medium
7:15
CHF
Consumer Price Index (YoY) (MAR)
-0.1%
-0.2%
Medium
7:15
CHF
CPI EU Harmonized (MoM) (MAR)
0.5%
-0.1%
Low
7:15
CHF
CPI EU Harmonized (YoY) (MAR)
-0.2%
-0.2%
Low
8:00
EUR
Italian Deficit to GDP (YTD) (4Q)
–
3.7%
Low
8:30
GBP
Lloyds Employment Confidence (MAR)
–
-2
Low
8:30
EUR
Eurozone Sentix Investor Confidence (APR)
13.9
13.9
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.3587
1.3645
1.3675
1.3703
1.3733
1.3761
1.3819
GBP/USD
1.6479
1.6529
1.6552
1.6579
1.6602
1.6629
1.6679
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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