Talking Points:
- Aussie, NZ Dollars Sink as Yemen Turmoil Drives Risk Aversion
- US Dollar at Risk if Fed-Speak Underpins Rate Hike Delay Bets
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The Australian and New Zealand Dollars underperformed in overnight trade, falling as much as 0.5 and 0.3 percent on average against their leading counterparts. A drop on Asian stock exchanges appeared to be the catalyst behind the slide in the sentiment-linked currencies.
The MSCI Asia Pacific regional benchmark equity index fell more than 1 percent as crude oil surged amid supply disruption fears. The move followed reports that Saudi Arabia began military operations in Yemen. The country sits on the Gulf of Aden, a key transit hub for petroleum from the Persian Gulf.
A quiet economic calendar in European trading hours will probably allow sentiment trends to remain in the driver’s seat. S&P 500 index futures are trading relatively flat in late Asian hours however, hinting that risk aversion may not necessarily carry forward into the session ahead.
Later in the day, “Fed-speak” returns to the spotlight.Comments from James Bullard and Dennis Lockhart, Presidents of the US central bank’s St Louis and Atlanta branches respectively, are on tap. The latter is a voting member of the rate-setting FOMC committee this year.
Traders pushed out the likely timeline for the first post-QE rate interest hike after last week’s FOMC meeting, with Fed Funds futures now pointing to an increase in September (versus the June/July consensus prevailing ahead of the Fed announcement). Rhetoric supporting thisshift may weigh on the US Dollar.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| No Data |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 7:00 | EUR | German GfK Consumer Conf (APR) | 9.8 | 9.7 | Low |
| 7:45 | EUR | French GDP (QoQ) (4Q F) | 0.1% | 0.1% | Medium |
| 7:45 | EUR | French GDP (YoY) (4Q F) | 0.2% | 0.2% | Medium |
| 9:00 | CHF | KOF Institute Spring Economic Forecast | - | - | Medium |
| 9:00 | EUR | Euro-Zone M3 s.a. (YoY) (FEB) | 4.3% | 4.1% | Low |
| 9:00 | EUR | Euro-Zone M3 s.a. (3m Avg) (FEB) | 4.0% | 3.6% | Low |
| 9:30 | GBP | Retail Sales Incl. Auto (MoM) (FEB) | 0.4% | -0.3% | Medium |
| 9:30 | GBP | Retail Sales Incl. Auto (YoY) (FEB) | 4.7% | 5.4% | Medium |
| 9:30 | GBP | Retail Sales Ex Auto (MoM) (FEB) | 0.4% | -0.7% | Low |
| 9:30 | GBP | Retail Sales Ex Auto (YoY) (FEB) | 4.2% | 4.8% | Low |
| 11:00 | GBP | CBI Reported Sales (MAR) | 18 | 1 | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.0736 | 1.0849 | 1.0909 | 1.0962 | 1.1022 | 1.1075 | 1.1188 |
| GBPUSD | 1.4642 | 1.4765 | 1.4823 | 1.4888 | 1.4946 | 1.5011 | 1.5134 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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