Currency markets may enter into consolidation mode, taking an opportunity to digest recent volatility amid a lull in top-tier scheduled event risk.
Talking Points
Australian Dollar Sinks as RBA Cuts Key Interest Rate to Record Low
Soft German Factory Orders Report May Damage Euro on ECB Bets
The Australian Dollar underperformed after the Reserve Bank of Australia cut its benchmark interest rate to a record low at 2.75 percent, as expected. The currency slid as much as 0.8 percent on average against its top counterparts. Traders are now pricing in another 25bps reduction at the June meeting and at least one further cut beyond that over the coming 12 months.
The economic calendar is relatively quiet in European trading hours, with Germany’s Factory Orders report amounting to the only bit of noteworthy event risk on the docket. Expectations call for a 2.9 percent year-on-year decline in March, marking the worst performance in six months. A soft print may reinforce overnight comments from ECB President Mario Draghi, who said the central bank may cut rates again if needed, and put downward pressure on the Euro.
On the risk sentiment front, S&P 500 index futures are trading flat and offer little guidance on the trajectory of risk appetite. The US economic calendar offers very little in terms of scheduled event risk to drive price action, hinting a period of consolidation may settle over the markets as investors digest recent volatility.
Asia Session:
GMT
CCY
EVENT
ACT
EXP
PREV
22:45
NZD
Average Hourly Earnings (QoQ) (1Q)
1.0%
1.0%
-0.4%
22:45
NZD
Private Wages ex Overtime (QoQ) (1Q)
0.4%
0.5%
0.5%
22:45
NZD
Labor Cost Private Sector (QoQ) (1Q)
0.3%
0.5%
0.6%
23:01
GBP
BRC Shop Price Index (YoY) (APR)
0.4%
–
1.4%
23:01
GBP
Lloyds Employment Confidence (APR)
-41
–
-45
23:30
AUD
AiG Performance of Construction Index (APR)
35.2
–
39
1:30
AUD
Trade Balance (A$) (MAR)
307M
0M
-111M
1:30
AUD
House Price Index (QoQ) (1Q)
0.1%
1.8%
2.0%
1:30
AUD
House Price Index (YoY) (1Q)
2.6%
4.0%
2.5%
4:30
AUD
Reserve Bank of Australia Rate Decision
2.75%
3.00%
3.00%
Euro Session:
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
5:45
CHF
Unemployment Rate (APR)
3.1% (A)
3.2%
Medium
5:45
CHF
Unemployment Rate s.a. (APR)
3.1% (A)
3.1%
Medium
5:45
CHF
SECO Consumer Confidence (APR)
-5 (A)
-6
Low
6:30
AUD
Foreign Reserves (A$) (APR)
49.8B (A)
48.7B
Low
6:45
EUR
French Trade Balance (MAR)
-4696M (A)
-5645M
Low
6:45
EUR
French Central Govt Balance (MAR)
-31.0B (A)
-27.1B
Low
6:45
EUR
French Industrial Production (MoM) (MAR)
-0.9% (A)
0.8%
Low
6:45
EUR
French Industrial Production (YoY) (MAR)
-2.5% (A)
-2.9%
Low
6:45
EUR
French Manufacturing Production (MoM) (MAR)
-1.0% (A)
0.8%
Low
6:45
EUR
French Manufacturing Production (YoY) (MAR)
-4.9% (A)
-2.5%
Low
7:00
CHF
Foreign Currency Reserves (APR)
433.6B (A)
438.3B
Low
7:59
GBP
New Car Registrations (YoY) (APR)
14.8% (A)
5.9%
Low
10:00
EUR
German Factory Orders s.a. (MoM) (MAR)
–
2.3%
Medium
10:00
EUR
German Factory Orders n.s.a. (YoY) (MAR)
–
0.0%
Medium
Critical Levels:
CCY
SUPPORT
RESISTANCE
EURUSD
1.3040
1.3127
GBPUSD
1.5507
1.5585
— 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