Talking Points:
Euro Unlikely to Find Support in Upbeat Manufacturing PMI Data
US Dollar Vulnerable if January’s ISM Print Proves Disappointing
New Zealand Dollar Outperformed in Otherwise Quiet Asian Trade
Final revisions of January’s Eurozone Manufacturing PMI readings headline the economic calendar in European hours. Flash estimates put the most closely-watched German and regional-wide measures at 32-month highs. Confirmation of these seemingly robust results seems unlikely to boost the Euro as traders remain focused on anemic inflation trends and their implications for an expansion of ECB stimulus efforts, perhaps as soon as this week. We continue to hold short EURUSD.
Later in the day, the spotlight turns to US ISM Manufacturing data. The report is expected to show that factory-sector activity growth slowed for the second consecutive month in January. US news-flow has increasingly softened relative to consensus forecasts over the past two weeks, suggesting analysts are overestimating the health of the world’s largest economy and opening the door for a downside surprise. That may weigh on the US Dollar as traders size up the outcome’s implications for a possible slowing of the Fed’s QE “tapering” process.
The New Zealand Dollar outperformed in otherwise quiet overnight trade, sliding as much as 0.3 percent on average against its leading counterparts. A singular catalyst was not readily apparent, suggesting the Kiwi’s advance probably reflected corrective price action after last week’s dismal showing. The currency slid 1.56 percent against its US namesake, yielding the worst performance among the majors.
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Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
22:30
AUD
AiG Performance of Manuf. Index (JAN)
46.7
–
47.6
23:00
AUD
RPData/Rismark House Px (MoM) (JAN)
1.2%
–
1.4%
23:30
AUD
TD Securities Inflation (MoM) (JAN)
0.1%
–
0.7%
23:30
AUD
TD Securities Inflation (YoY) (JAN)
2.5%
–
2.7%
0:01
GBP
Hometrack Housing Survey (MoM) (JAN)
0.3%
–
0.5%
0:01
GBP
Hometrack Housing Survey (YoY) (JAN)
4.8%
–
4.4%
0:30
AUD
Building Approvals (MoM) (DEC)
-2.9%
-0.5%
-0.3%
0:30
AUD
Building Approvals (YoY) (DEC)
21.8%
23.4%
23.6%
0:30
AUD
ANZ Job Advertisements (MoM) (JAN)
-0.3%
–
-0.8%
1:00
CNY
Non-manufacturing PMI (JAN)
53.4
–
54.6
5:00
JPY
Vehicle Sales (YoY) (JAN)
27.5%
–
18.7%
5:30
AUD
Commodity Index (YoY) (JAN)
-9.9%
–
-3.6%
5:30
AUD
Commodity Index AUD (JAN)
91.5
–
92.5
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
8:30
CHF
PMI Manufacturing (JAN)
55.0
53.9
Low
8:45
EUR
Italian PMI Manufacturing (JAN)
53.2
53.3
Low
8:50
EUR
French PMI Manufacturing (JAN F)
48.8
48.8
Medium
8:55
EUR
German PMI Manufacturing (JAN F)
56.3
56.3
Medium
9:00
EUR
Euro-Zone PMI Manufacturing (JAN F)
53.9
53.9
Medium
9:30
GBP
PMI Manufacturing (JAN)
57.3
57.3
High
10:00
EUR
Euro Area 3Q Government Deficit
–
–
Low
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EUR/USD
1.3325
1.3419
1.3452
1.3513
1.3546
1.3607
1.3701
GBP/USD
1.6313
1.6384
1.6411
1.6455
1.6482
1.6526
1.6597
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
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