Talking Points
- US Dollar, Japanese Yen Edge Higher on Safe-Haven Demand
- S&P 500 Futures Drop on Signs of US Deadlock on Budget Cuts
- ECB Commentary in Focus as Traders Hope for Bond Purchases
The major currencies were mostly confined to choppy ranges against the US Dollar in overnight trade, although the greenback and the likewise safety-linked Japanese Yen were a touch higher ahead of the opening bell in Europe amid news that the US Congressional super-committee will probably fail to strike a deal to reduce the nation’s debt by the November 23 deadline. Fears that continued deadlock will spur ratings agencies into action as it did when Standard & Poor’s downgraded the US earlier this year weighed on risk appetite, with the MSCI Asia Pacific regional stock index down 1.1 percent. S&P 500 stock index futures are trading sharply lower, pointing to continued risk aversion ahead.
The economic calendar offers little by way of significant releases in the coming session, putting the onus once again on commentary from European Central Bank officials. Comments from Ewald Nowotny, Erkki Liikanen and Juergen Stark are on tap today. As we discussed before, discussions about the containment of the Eurozone debt crisis are noticeably shifting to the role of the ECB, with calls for a large-scale QE program growing ever-louder in some parts of the currency bloc and across financial markets while meeting stiff resistance in Germany and at the central bank itself.
With that in mind, harping on the central bank’s mandate of price stability while warning of mounting risks to growth may reflect a strategy of rationalizingmonetization not as a bail-out for debt-strapped governments but as a bulwark against deflationary pressures.If such a narrative begins to emerge, it seems likely to boost the Euro as well as risk appetite at large. Otherwise, continued refusal to help tame soaring borrowing costs is likely to add fuel to the US Dollar’s advance as haven-seeking demand continues to grow.
Asia Session: What Happened
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
23:50 |
JPY |
Merchandise Trade Balance Total (¥) (OCT) |
-273.8B |
28.8B |
296.2B (R-) |
|
23:50 |
JPY |
Adj. Merchandise Trade Balance (¥) (OCT) |
-457.9B |
-204.0B |
-96.7B (R-) |
|
23:50 |
JPY |
Merchandise Trade Exports (YoY) (OCT) |
-3.7 |
-0.3 |
2.3 (R-) |
|
23:50 |
JPY |
Merchandise Trade Imports (YoY) (OCT) |
17.9 |
15.1 |
12.1 |
|
0:01 |
GBP |
Rightmove House Prices (MoM) (NOV) |
-3.1% |
- |
2.8% |
|
0:01 |
GBP |
Rightmove House Prices (YoY) (NOV) |
1.2% |
- |
1.2% |
|
2:00 |
NZD |
Credit Card Spending s.a. (MoM) (OCT) |
2.6% |
- |
1.3% (R-) |
|
2:00 |
NZD |
Credit Card Spending (YoY) (OCT) |
7.9% |
- |
5.3% (R+) |
|
4:30 |
JPY |
All Industry Activity Index (MoM) (SEP) |
-0.9% |
-1.0% |
-0.3% (R+) |
|
5:00 |
JPY |
Coincident Index (SEP F) |
89.0 |
- |
88.9 |
|
5:00 |
JPY |
Leading Index (SEP F) |
91.5 |
- |
91.6 |
|
7:00 |
JPY |
Convenience Store Sales (YoY) (OCT) |
14.1% |
- |
-4.0% |
Euro Session: What to Expect
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
8:00 |
CHF |
Money Supply M3 (YoY) (OCT) |
- |
8.2% |
Low |
|
9:00 |
EUR |
Euro-Zone Current Account n.s.a. (€) (SEP) |
- |
-6.3B |
Low |
|
9:00 |
EUR |
Euro-Zone Current Account s.a. (€) (SEP) |
- |
-5.0B |
Low |
|
9:00 |
EUR |
ECB’s Liikanen, Nowotny Speak in Vienna |
- |
- |
Medium |
|
12:45 |
EUR |
ECB’s Stark Speaks in Dublin |
- |
- |
Medium |
Critical Levels
|
CCY |
SUPPORT |
RESISTANCE |
|
EURUSD |
1.3443 |
1.3610 |
|
GBPUSD |
1.5660 |
1.5884 |
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow me on Twitter at @IlyaSpivak
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