Pound, Dollar to Rise if UK CPI and US Sales Data Boost Rate Hike Bets

2015-04-14 06:18:00

Talking Points:

British Pound May Rise if Upbeat Core CPI Figures Boost BOE Rate Outlook
US Dollar to Extend Advance if Retail Sales Data Drives Fed Rate Hike Bets
See Economic Releases Directly on Your Charts with the DailyFX News App

UK CPI figures headline the economic calendar in European trading hours. The core year-on-year inflation rate is expected to remain at 1.2 percent in March, unchanged from the prior month. UK economic news-flow has improved relative to consensus forecasts over recent weeks however, opening the door for an upside surprise. Such an outcome may boost Bank of England rate hike speculation and send the British Pound higher. We remain short EURGBP.

Later in the day, the spotlight shifts to the US Retail Sales report. Receipts are seen rising 1.1 percent in March, producing the largest monthly gain in a year. A strong result would come on the heels of a pickup in overall US data flow since late March and may prod investors to rethink the probabilities of a Federal Reserve interest rate hike near the mid-year mark (as it stands, the first increase in the baseline lending rate is being priced in for October by the futures markets). The US Dollar is likely to rise in this scenario, potentially overcoming a key barrier at last month’s highs.

The Japanese Yen outperformed in overnight trade, rising as much as 0.4 percent on average against its major counterparts. The move tracked a move higher in benchmark 10-year Japanese government bond (JGB) prices, hinting a pick-up in JPY-denominated assets may have been the catalyst behind the advance. Furthermore, selling on Asian stock exchanges may have offered a sentiment-derived boost to the safety-linked currency.

New to FX? START HERE !

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
22:00	NZD	NZIER Business Opinion Survey (1Q)	23	-	24
22:02	NZD	REINZ House Price Index (MoM) (MAR)	6.7%	-	0.8%
22:02	NZD	REINZ House Price Index (YoY) (MAR)	9.5%	-	6.1%
22:02	NZD	REINZ House Sales (YoY) (MAR)	20.3%	-	12.6%
23:01	GBP	BRC Sales Like-For-Like (YoY) (MAR)	3.2%	0.5%	0.2%
23:30	AUD	ANZ Roy Morgan Weekly Consumer Conf	109.8	-	109.7
1:30	AUD	NAB Business Conditions (MAR)	6	-	2
1:30	AUD	NAB Business Confidence (MAR)	3	-

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
6:00	EUR	German Wholesale Price Index (MoM) (MAR)	-	0.5%	Low
6:00	EUR	German Wholesale Price Index (YoY) (MAR)	-	-2.1%	Low
8:00	EUR	ECB Publishes Bank Lending Survey	-	-	Medium
8:30	GBP	CPI (MoM) (MAR)	0.2%	0.3%	High
8:30	GBP	CPI (YoY) (MAR)	0.0%	0.0%	High
8:30	GBP	CPI Core (YoY) (MAR)	1.2%	1.2%	High
8:30	GBP	RPI (MoM) (MAR)	0.3%	0.5%	Medium
8:30	GBP	RPI (YoY) (MAR)	1.0%	1.0%	Medium
8:30	GBP	RPI Ex Mort. Int. Payments (YoY) (MAR)	1.0%	1.0%	Low
8:30	GBP	PPI Input NSA (MoM) (MAR)	-0.4%	0.2%	Low
8:30	GBP	PPI Input NSA (YoY) (MAR)	-13.5%	-13.5%	Low
8:30	GBP	PPI Output NSA (MoM) (MAR)	0.1%	0.2%	Medium
8:30	GBP	PPI Output NSA (YoY) (MAR)	-1.8%	-1.8%	Medium
8:30	GBP	PPI Output Core NSA (MoM) (MAR)	0.1%	0.1%	Medium
8:30	GBP	PPI Output Core NSA (YoY) (MAR)	0.1%	0.2%	Medium
8:30	GBP	ONS House Price (YoY) (FEB)	-	8.4%	Low
9:00	EUR	Eurozone Industrial Production (MoM) (FEB)	0.4%	-0.1%	Medium
9:00	EUR	Eurozone Industrial Production (YoY) (FEB)	0.8%	1.2%	Medium