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Talking Points:
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British Pound May Fall if BOE Minutes Pour Cold Water on Rate Hike Bets
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US Dollar to Advance if Fed Meeting Minutes Dent Markets’ Dovish Outlook
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Minutes from May’s Bank of England policy meeting are in focus in European trading hours. Last week’s quarterly Inflation Report revealed that the central bank is assuming its first post-crisis interest rate hike will occur around mid-2016. That is significantly later than what is being implied by priced-in market expectations. Indeed, futures market pricing implies lift-off in the first quarter of next year. If the Minutes document shines light on this disparity, investors may well have to adjust expectations outward, sending the British Pound lower.
Later in the day, the spotlight shifts to minutes from April’s FOMC sit-down . Janet Yellen and company have argued that weakness seen through the winter is transitory. Indeed, there seem to be striking parallels between the first-quarter slumps in 2014 and 2015 . Last year, the markets bet on a slowdown or pause of the QE “taper” after the winter downturn only to be met with steadfast resolve on from the FOMC. A parallel result this time would imply a rate hike around mid-year, not late in the fourth quarter as is now predicted . A Minutes release supportive of such a scenario could offer further support to the US Dollar after the currency issue the largest advance in two months yesterday.
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Asia Session
|
GMT
|
CCY
|
EVENT
|
ACT
|
EXP
|
PREV
|
|
23:50
|
JPY
|
GDP SA (QoQ) (1Q P)
|
0.6%
|
0.4%
|
0.3%
|
|
23:50
|
JPY
|
GDP Annualized SA (QoQ) (1Q P)
|
2.4%
|
1.6%
|
1.1%
|
|
23:50
|
JPY
|
GDP Nominal SA (QoQ) (1Q P)
|
1.9%
|
1.5%
|
0.7%
|
|
23:50
|
JPY
|
GDP Deflator YoY (1Q P)
|
3.4%
|
3.6%
|
2.4%
|
|
23:50
|
JPY
|
GDP Private Consumption (QoQ) (1Q P)
|
0.4%
|
0.2%
|
0.4%
|
|
23:50
|
JPY
|
GDP Business Spending (QoQ) (1Q P)
|
0.4%
|
0.6%
|
0.0%
|
|
23:50
|
JPY
|
Housing Loans YoY (1Q P)
|
2.5%
|
-
|
2.5%
|
|
0:30
|
AUD
|
Westpac Consumer Conf Index (MAY)
|
102.4
|
-
|
96.2
|
|
0:30
|
AUD
|
Westpac Consumer Conf SA (MoM) (MAY)
|
6.4%
|
-
|
-3.2%
|
|
1:00
|
AUD
|
Skilled Vacancies (MoM) (APR)
|
0.0%
|
-
|
0.4%
|
|
5:00
|
JPY
|
Leading Index CI (MAR F)
|
106.0
|
-
|
105.5
|
|
5:00
|
JPY
|
Coincident Index (MAR F)
|
109.2
|
-
|
109.5
|
|
5:00
|
JPY
|
Supermarket Sales (YoY) (APR)
|
6.4%
|
-
|
-8.6%
|
|
6:00
|
JPY
|
Machine Tool Orders (YoY) (APR F)
|
10.5%
|
-
|
10.4%
|
|
7:00
|
JPY
|
Convenience Store Sales (YoY) (APR)
|
4.0%
|
-
|
-2.8%
|
European Session
|
GMT
|
CCY
|
EVENT
|
EXP/ACT
|
PREV
|
IMPACT
|
|
6:00
|
EUR
|
PPI( MoM) (APR)
|
0.1% (A)
|
0.1%
|
Medium
|
|
6:00
|
EUR
|
PPI (YoY) (APR)
|
-1.5% (A)
|
-1.7%
|
Medium
|
|
8:30
|
GBP
|
Minutes from May BOE Meeting
|
-
|
-
|
High
|
|
9:00
|
EUR
|
Construction Output (MoM) (MAR)
|
-
|
-1.8%
|
Low
|
|
9:00
|
EUR
|
Construction Output (YoY) (MAR)
|
-
|
-3.7%
|
Low
|
|
9:00
|
CHF
|
Credit Suisse ZEW Survey – Exp (MAY)
|
-
|
-23.2
|
Medium
|
Critical Levels
|
CCY
|
Supp 3
|
Supp 2
|
Supp 1
|
Pivot Point
|
Res 1
|
Res 2
|
Res 3
|
|
EURUSD
|
1.0784
|
1.0991
|
1.1070
|
1.1198
|
1.1277
|
1.1405
|
1.1612
|
|
GBPUSD
|
1.5097
|
1.5320
|
1.5417
|
1.5543
|
1.5640
|
1.5766
|
1.5989
|
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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