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Talking Points
- Yen Soars as China Drops 2012 GDP Growth Target Below 8 Percent
- Softer Services PMI/ISM Readings to Reinforce Global Slowdown Fears
- Dallas Fed’s Fisher May Boost Risk Aversion with Anti-QE3 Rhetoric
The Japanese Yen soared overnight, adding as much as 0.9 percent on average against its leading counterparts, as a selloff across Asian bourses stocked safe-haven demand. The MSCI Asia Pacific regional benchmark stock index sank after Chinese Premier Wen Jiabao said his country will officially target a GDP growth rate of 7.5 percent in 2012. This marks the lowest goal since 2004 and – if achieved – would amount to the weakest performance since 1990. The US Dollar likewise rose against overtly growth-linked currencies including its Australian, Canadian and New Zealand namesakes but performance was mixed against the other non-Yen majors.
Looking ahead, global slowdown concerns appear like to remain in focus. UK Services PMI is expected to print lower in February, snapping a three-month winning streak. The analogous US ISM Non-Manufacturing Composite gauge is likewise expected to pull back over the same period after hitting an 11-month high in January. Futures tracking the benchmark S&P 500 stock index – a proxy for overall sentiment trends – are pointing sharply lower to suggest risk aversion remains the dominant theme across the markets. A speech from Dallas Fed President Richard Fisher on “The State of the Economy” may also prove market-moving, particularly if the remarks echo the moderation in dovish rhetoric seen in Ben Bernanke’s testimony last week. Against the current backdrop, further evidence that a QE3 program is becoming increasingly unlikely would probably amplify risk-averse tendencies.
Asia Session: What Happened
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
21:45 |
NZD |
Net Migration s.a. (JAN) |
-650 |
- |
-530 (R-) |
|
21:45 |
NZD |
Value of All Buildings (4Q) |
2.9% |
2.0% |
-1.6% (R+) |
|
22:30 |
AUD |
AiG Performance of Service Index (FEB) |
46.7 |
- |
51.9 |
|
23:30 |
AUD |
TD Securities Inflation (MoM) (FEB) |
0.1% |
- |
0.2% |
|
23:30 |
AUD |
TD Securities Inflation (YoY) (FEB) |
2.0% |
- |
2.2% |
|
0:01 |
GBP |
Lloyds Business Barometer (FEB) |
1 |
- |
-11 |
|
0:30 |
AUD |
Company Operating Profit (QoQ) (4Q) |
-6.5% |
0.0% |
4.8% |
|
0:30 |
AUD |
Inventories (4Q) |
1.4% |
0.3% |
-1.1% |
|
0:30 |
AUD |
ANZ Job Advertisements (MoM) (FEB) |
3.3% |
- |
7.5% (R+) |
|
2:30 |
CNY |
China HSBC Services PMI (FEB) |
53.9 |
- |
52.5 |
Euro Session: What to Expect
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
8:15 |
CHF |
Retail Sales (Real) (YoY) (JAN) |
- |
0.6% |
Low |
|
8:45 |
EUR |
Italian PMI Services (FEB) |
45.2 |
44.8 |
Low |
|
8:50 |
EUR |
French PMI Services (FEB F) |
50.3 |
50.3 |
Low |
|
8:55 |
EUR |
German PMI Services (FEB F) |
52.6 |
52.6 |
Medium |
|
9:00 |
EUR |
Euro-Zone PMI Composite (FEB F) |
49.7 |
49.7 |
Medium |
|
9:00 |
EUR |
Euro-Zone PMI Services (FEB F) |
49.4 |
49.4 |
Medium |
|
9:00 |
EUR |
Italy PPI (YoY) (JAN) |
3.4% |
4.0% |
Low |
|
9:00 |
EUR |
Italy PPI (MoM) (JAN) |
0.6% |
0.1% |
Low |
|
9:30 |
GBP |
PMI Services (FEB) |
54.9 |
56 |
Medium |
|
9:30 |
EUR |
Euro-Zone Sentix Investor Confidence (MAR) |
-5 |
-11.1 |
Low |
|
9:30 |
GBP |
Official Reserves (Changes) |
- |
$2477M |
Low |
|
10:00 |
EUR |
Euro-Zone Retail Sales (MoM) (JAN) |
-0.1% |
-0.3% |
Medium |
|
10:00 |
EUR |
Euro-Zone Retail Sales (YoY) (JAN) |
-1.5% |
-1.3% |
Medium |
Critical Levels
|
CCY |
SUPPORT |
RESISTANCE |
|
EURUSD |
1.3093 |
1.3292 |
|
GBPUSD |
1.5732 |
1.5926 |
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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