Talking Points:
Soft 4Q US GDP Data May Punish US Dollar, Drive Japanese Yen Gains
Euro Unlikely to Find Potent Catalyst in Soft Eurozone Inflation Figures
See Economic News Directly on Your Charts with the DailyFX News App
January’s flash Eurozone CPI data headlines the economic calendar in European hours. The benchmark year-on-year inflation rate is expected to slip deeper into negative territory, registering a 0.5 percent decline to come within a hair of the all-time low (-0.6% y/y) recorded in July 2009.
While a soft outcome will support the case for aggressive monetary stimulus, its impact on the Euro may prove limited. The ECB unveiled a large QE effort just last week, meaning another soft CPI print will imply relatively little for the near-term outlook andthereby offer no impetus for outsized volatility.
Later in the day, the spotlight turns to the preliminary set of fourth-quarter US GDP figures. Economists are penciling in an annualized growth rate of 3 percent, marking a slowdown from the 5 percent surge notched up in the third quarter and brings the pace of expansion back toward the near-term trend average (2.8 percent).
US news-flow has dramatically deteriorated relative to consensus forecasts over recent weeks however. That suggests analysts’ models are overestimating the vigor of the world’s largest economy, opening the door for a downside surprise. Such an outcome may weigh on the US Dollar as traders push back Fed rate hike expectations. It may likewise drive risk aversion amid worries the about the inability of US growth to offset malaise in Europe and Asia, triggering an unwinding of carry trades and boosting the Japanese Yen.
New to FX? START HERE!
Asia Session
GMT
CCY
EVENT
ACT
EXP
PREV
21:45
NZD
Building Permits (MoM) (DEC)
-2.1%
–
10.5%
21:45
NZD
Net Migration s.a. (DEC)
4100
–
5000
23:30
JPY
Jobless Rate (DEC)
3.4%
3.5%
3.5%
23:30
JPY
Job-To-Applicant Ratio (DEC)
1.15
1.12
1.12
23:30
JPY
Household Spending (YoY) (DEC)
-3.4%
-2.3%
-2.5%
23:30
JPY
National CPI (YoY) (DEC)
2.4%
2.3%
2.4%
23:30
JPY
National CPI Ex-Fresh Food (YoY) (DEC)
2.5%
2.6%
2.7%
23:30
JPY
National CPI Ex Food, Energy (YoY) (DEC)
2.1%
2.1%
2.1%
23:30
JPY
Tokyo CPI (YoY) (JAN)
2.3%
2.2%
2.2%
23:30
JPY
Tokyo CPI Ex-Fresh Food (YoY) (JAN)
2.2%
2.2%
2.3%
23:30
JPY
Tokyo CPI Ex Food, Energy (YoY) (JAN)
1.7%
1.8%
1.8%
23:50
JPY
Industrial Production (MoM) (DEC P)
1.0%
1.2%
-0.5%
23:50
JPY
Industrial Production (YoY) (DEC P)
0.3%
0.3%
-3.7%
0:05
GBP
GfK Consumer Confidence Survey (JAN)
1
-2
-4
0:30
AUD
PPI (YoY) (4Q)
1.1%
–
1.2%
0:30
AUD
PPI (QoQ) (4Q)
0.1%
–
0.2%
0:30
AUD
Private Sector Credit (YoY) (DEC)
5.9%
5.9%
5.9%
0:30
AUD
Private Sector Credit (MoM) (DEC)
0.5%
0.5%
0.5%
2:00
NZD
Money Supply M3 (YoY) (DEC)
6.3%
–
5.9%
4:00
JPY
Vehicle Production (YoY) (DEC)
-2.5%
–
-12.2%
5:00
JPY
Housing Starts (YoY) (DEC)
-14.7%
-14.8%
-14.3%
5:00
JPY
Annualized Housing Starts (DEC)
0.883M
0.900M
0.888M
6:00
JPY
Construction Orders (YoY) (DEC)
7.5%
–
16.9%
European Session
GMT
CCY
EVENT
EXP/ACT
PREV
IMPACT
7:00
EUR
German Retail Sales (MoM) (DEC)
0.2% (A)
0.9%
Low
7:00
EUR
German Retail Sales (YoY) (DEC)
4.0% (A)
-1.0%
Low
8:00
CHF
KOF Leading Indicator (JAN)
97.0 (A)
98.8
Medium
9:30
GBP
Net Consumer Credit (DEC)
1.2B
1.3B
Low
9:30
GBP
Net Lending Sec. on Dwellings (DEC)
1.9B
2.1B
Low
9:30
GBP
Mortgage Approvals (DEC)
59.0K
59.0K
Medium
9:30
GBP
M4 Money Supply (MoM) (DEC)
–
0.0%
Low
9:30
GBP
M4 Money Supply (YoY) (DEC)
–
-2.8%
Low
9:30
GBP
M4 Ex IOFCs 3M Annualized (DEC)
–
2.9%
Low
10:00
EUR
Eurozone Unemployment Rate (DEC)
11.5%
11.5%
Medium
10:00
EUR
Eurozone CPI Estimate (YoY) (JAN)
-0.5%
-0.2%
High
10:00
EUR
Eurozone CPI – Core (YoY) (JAN A)
0.7%
0.7%
High
Critical Levels
CCY
Supp 3
Supp 2
Supp 1
Pivot Point
Res 1
Res 2
Res 3
EURUSD
1.1105
1.1211
1.1265
1.1317
1.1371
1.1423
1.1529
GBPUSD
1.4797
1.4940
1.5003
1.5083
1.5146
1.5226
1.5369
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya’s analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.Learn forex trading with a free practice account and trading charts from FXCM.
Source: Daily fx