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- Nov, 20 US Dollar, Japanese Yen Surge on Risk Aversion as Dell Earnings Disappoint
- Nov, 19 US Dollar Advances as Nikkei Leads Stocks Lower in Asian Trading
- Nov, 18 Currency Markets May Look Past BOE Minutes, Focus on US Inflation and Housing Data
- Nov, 17 Greenback Finding Some Support into European Trade
- Nov, 13 Euro Vulnerable If Third-Quarter GDP Continues to Show Weak Private Sector
- Nov, 12 Australian Dollar Hits Fresh Yearly High as Jobs Data Boosts Rates Outlook
- Nov, 11 British Pound in Focus as BOE Reveals Inflation Report, Jobless Rate Hits 12-Year High
- Nov, 10 Pound Tumbles on UK Credit Outlook, Euro Exposed with ZEW to fall for Second Month
- Nov, 09 New Zealand Dollar Soars on Exports Outlook, USD Sinks Amid Bets on Dovish Fed
- Nov, 06 Currency Markets to Look Past European Economic Data, Focus on US Jobs Report
- Nov, 05 British Pound in Focus with BOE Set to Expand Stimulus, Likely Inaction from ECB
- Nov, 04 Euro in Focus as Producer Prices Fall For Ninth Month, Threatening Continued Deflation
- Nov, 03 Australian Dollar Falls Despite Interest Rate Hike as RBA Hints Shift to Neutral
- Nov, 02 US Dollar May Correct Lower but Risky Assets are on Shaky Ground
- Oct, 30 Japanese Yen Gains as BOJ Ends Corporate Bond Scheme, Jobless Rate Drops
- Oct, 29 US Dollar May Extend Gains as Dismal European Data Fuels Risk Aversion
- Oct, 27 US Dollar Consolidates Gains, Australian Business Confidence Hits 15-Year High
- Oct, 26 US Dollar Falls as Asian Stocks Advance on Earnings, South Korea GDP
- Oct, 23 Euro Gains in Focus Ahead of IFO, PMI Data; UK GDP May Disappoint in Third Quarter
- Oct, 22 US Dollar Rises as Stocks Sink in Asia on Wells Fargo Downgrade, China GDP
Euro selling may resume in European hours as Germany’s consumer price report shows inflation shrank for the fourth consecutive month, hinting that the European Central Bank will delay raising interest rates for longer than expected.
Key Overnight Developments
• Japan’s Retail Sales Topped Expectations But Job Losses a Concern
• Australian Inflation Hit Decade Low in Q3, Rate Hikes Still Expected
• New Zealand Business Confidence Falls For First in Eight Months
Critical Levels
The Euro consolidated near the 1.48 level in overnight trading, edging a bit higher off the US session low at 1.4770. The British Pound leaned a bit lower to 1.6339 but the bears were not able to build momentum, yielding an effectively flat result on the session ahead of the opening bell in Europe.
Asia Session Highlights
Japan’s Retail Trade figures topped expectations in September, with sales adding 0.9% from the previous month versus forecasts for a 0.2% result. The annual pace of contraction slowed to -1.4%, the lowest in 10 months. Consumer confidence readings have rebounded since setting a bottom in December as the perceptions about the severity of the economic downturn began to moderate. Most recently, sentiment has seen a boost as the unemployment rate unexpectedly fell in August while the newly elected DJP government promised to distribute subsidies for childcare and abolish highway tolls. Still, a survey of economists polled by Bloomberg predicts that the jobless rate will continue to advance in the months ahead to top 6% in the third quarter of next year, hinting that the retail sector may find it hard to maintain current momentum.
In Australia, the Consumer Price Index data showed the annual pace of inflation slowed to 1.3% in the third quarter, the lowest in a decade. Earlier this week, producer prices dropped to the lowest on record, pointing to a decidedly tame outlook for inflationary pressure in the months ahead. Still, futures and overnight index swap markets continue to show traders are betting on another 0.25% increase in borrowing costs when the Reserve Bank of Australia announces rates next week after it became the first central bank to hike the benchmark lending rate in the aftermath of last year’s global financial crisis and credit crunch earlier this month.
New Zealand Business Confidence declined for the first time in eight months in October according to a survey from National Bank of New Zealand (NBNZ), though the metric printed in very close proximity to the previous month’s 10-year high. Hiring expectations led the figure lower as the percentage of polled businesses expecting to cut jobs outpaced those expecting to add them by margin of 0.3%. The Reserve Bank of New Zealand is forecasting the unemployment rate will top 7% for the first time in over 10 years in 2010 and policymakers will probably keep interest rates unchanged at a record-low 2.5% tomorrow.
Euro Session: What to Expect
Germany’s EU-harmonized Consumer Price Index is expected to have fallen -0.1% in the year to October, marking the fourth consecutive month of deflation in the Euro Zone’s largest economy. Continued losses may undermine the nascent economic recovery as entrenching expectation of lower prices begin to encourage consumers and businesses to wait for a better bargain and delay spending and investment. A stronger Euro has not helped in this regard, boosting Europeans’ purchasing power and effectively helping to drive down prices in terms of the single currency. Coming on the heels of yesterday’s Euro Zone money supply report that showed lending to the private sector shank for the first time ever in September, today’s data may hint that the European Central Bank will be forced to offer expand stimulus measures or at the very least delay raising interest rates for longer than is currently projected. Traders are pricing in 89.2 basis points in rate hikes over the coming 12 months according to a Credit Suisse gauge of market yield expectations derived from trading in overnight index swaps.
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