Overnight Headlines
- Aussie Dollar Hits Record High vs USD as Inflation Tops Forecasts
- Yen Declines as S&P Cuts Japan’s Credit Outlook to “Negative”
Critical Levels
CCY | SUPPORT | RESISTANCE |
EURUSD | 1.4555 | 1.4761 |
GBPUSD | 1.6387 | 1.6544 |
The Euro traded sideways overnight, locked in a choppy range below the 1.47 to the US Dollar. The British Pound was likewise range-bound, with prices confined to familiar territory around the 1.65 figure.
Asia Session: What Happened
GMT | CCY | EVENT | ACT | EXP | PREV |
1:00 | NZD | NBNZ Activity Outlook (APR) | 29.5 | - | 14.7 |
1:00 | NZD | NBNZ Business Confidence (APR) | 14.2 | - | -8.7 |
1:00 | JPY | Small Business Confidence (APR) | 36.1 | - | 49.5 |
1:30 | AUD | Consumer Prices Index (QoQ) (1Q) | 1.6% | 1.2% | 0.4% |
1:30 | AUD | Consumer Prices Index (YoY) (1Q) | 3.3% | 3.0% | 2.7% |
1:30 | AUD | RBA Trimmed Mean (YoY) (1Q) | 2.3% | 2.1% | 2.2% |
1:30 | AUD | RBA Weighted Median (QoQ) (1Q) | 0.8% | 0.6% | 0.5% |
1:30 | AUD | RBA Weighted Median (YoY) (1Q) | 2.2% | 2.1% | 2.3% |
1:30 | AUD | RBA Trimmed Mean (QoQ) (1Q) | 0.9% | 0.7% | 0.3% |
2:00 | CNY | Industrial Profits YTD YoY (MAR) | 32.0% | - | 34.3% |
The Australian Dollar outperformed in overnight trade, touching a record high against its US counterpart after first-quarter Consumer Price Index figures topped economists’ expectations, putting the annualized inflation rate at a two-year high of 3.3 percent. The result helped bolster the outlook for renewed RBA interest rate hikes: while traders still price in no chance of an increase in borrowing costs at the next policy meeting, a Credit Suisse gauge tracking the one-year tightening outlook rose 4bps to the highest in two weeks.
Ratings giant S&P cut its credit outlook for Japan from “stable” to “negative”, saying the debt/GDP ratio may hit as high as 145 percent in the 2013 fiscal year as the reconstruction bill following the Tohoku earthquake amounts to as much as ¥50 trillion. The Japanese Yen spiked lower following the announcement, trading down as much as 0.5 percent against its top counterparts.
Euro Session: What to Expect
GMT | CCY | EVENT | EXP | PREV | IMPACT |
6:00 | EUR | German GfK Consumer Conf Survey (MAY) | 5.8 | 5.9 | Medium |
6:45 | EUR | France Consumer Confidence Indicator (APR) | 83 | 83 | Low |
8:30 | GBP | Gross Domestic Product (YoY) (1Q) | 1.8% | 1.5% | High |
8:30 | GBP | Gross Domestic Product (QoQ) (1Q) | 0.5% | -0.5% | High |
8:30 | GBP | Index of Services (MoM) (FEB) | 0.2% | 1.3% | Low |
8:30 | GBP | Index of Services (3Mo3M) (FEB) | -0.3% | -0.5% | Low |
8:30 | GBP | BBA Loans for House Purchase (MAR) | 30450 | 29923 | Medium |
9:00 | EUR | Euro-Zone Industrial New Orders (MoM) (FEB) | 1.5% | 1.2% | Low |
9:00 | EUR | Euro-Zone Industrial New Orders (YoY) (FEB) | 21.8% | 21.9% | Low |
UK Gross Domestic Product figures headline the economic calendar, with expectations calling for output to add 0.5 percent in the first quarter having unexpectedly slumped in the three months through December 2009. Headwinds from a weak construction sector had been instrumental in that disappointing reading but PMI figures collected over recent months point to a vigorous rebound in home-building in the first quarter, underpinning hopes for a recovery.
A preliminary estimate from NIESR – a respected London-based think tank – points to an upside surprise, suggesting output added 0.7 percent over the period in question. A strong outcome promises to underpin Bank of England rate hike expectations after a Credit Suisse gauge of priced-in rate hike expectations over the coming year dropped to the lowest in nearly four months today, sending the British Pound higher in the process.
Later in the session, all eyes will turn to the Federal Reserve as it deliver the monthly policy announcement, which this time around will be accompanied by the inaugural quarterly press conference with Chairman Ben Bernanke. The outcome promises to weighon risky assets, boosting the safety-linked US Dollar. Indeed, the Fed has little motivation to introduce press conferences into the policy mix now if not to offer something to repair its tarnished image among the US electorate. With public opinion set against QE, the only impetus to willingly expose the Bank to open scrutiny would be to begin unveiling stimulus exit plans, which ought to boost yields and stoke selling across the spectrum of growth-sensitive assets and correlated currencies.
For real time news and analysis, please visit http://www.dailyfx.com/real_time_news
To receive future articles by email, please contact Ilya at ispivak@dailyfx.com
