Talking Points
- Dollar, Yen Fall Amid Optimism Ahead of ECB LTRO Results
- Strong LTRO Outlook May Weigh on Euro, Boost Aussie and Kiwi
- Eurozone CPI, German Jobs Data Unlikely to be Market-Moving
The US Dollar and Japanese Yen declined against most of their leading counterparts in overnight as Asian stocks rose, sapping demand for the go-to safe haven currencies. Risk appetite is on the upswing as traders look ahead to the outcome of the second 3-year ECB long-term refinancing operation (LTRO). Median forecasts call for a take-up of €470 billion this time around after a €489 billion outing in December.
As discussed in detail in our weekly fundamental trends monitor, such an outcome is likely to downgrade the threat of a Eurozone-driven credit crunch in the eyes of investors, boosting market-wide sentiment. This seems to bode well for the stocks-correlated Australian, Canadian and New Zealand Dollars. It may prove to hurt the Euro however in a similar way that money supply dilution courtesy of the Fed’s QE efforts weighed on the greenback. The final LTRO results are due at 10:15 GMT.
On the data front, German Unemployment figures enter the spotlight first. Expectations expect the economy to add 5,000 jobs in February, keeping the unemployment rate unchanged at 6.7 percent. Later in the day, the Eurozone CPI report is expected to show that the region-wide inflation rate held at 2.7 percent for second month in January.
On balance, neither outcome is likely to prove particularly market-moving. A steady improvement in German labor-market conditions since early 2009 has had no discernible impact on ECB policy expectations, eclipsed by weakness elsewhere in the region. As for the CPI reading, priced-in expectations already call for a flat ECB outlook in the coming 12 months, so confirmation of the status quo is unlikely to mean much for the single currency particularly as LTRO preoccupies traders’ attention.
Asia Session: What Happened
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
21:45 |
Building Permits (MoM) (JAN) |
8.3% |
3.4% |
2.6% (R+) |
|
|
23:15 |
JPY |
Markit/JMMA Manufacturing PMI (FEB) |
50.5 |
- |
50.7 |
|
23:50 |
JPY |
Industrial Production (MoM) (JAN P) |
2.0% |
1.5% |
3.8% |
|
23:50 |
JPY |
Industrial Production (YoY) (JAN P) |
-1.2% |
-1.6% |
-4.3% |
|
0:00 |
HIA New Home Sales (MoM) (JAN) |
-7.3% |
- |
-4.9% |
|
|
0:00 |
NBNZ Activity Outlook (FEB) |
31.2 |
- |
25.7 |
|
|
0:00 |
NBNZ Business Confidence (FEB) |
28.0 |
- |
16.9 |
|
|
0:01 |
GfK Consumer Confidence Survey (FEB) |
-29 |
-27 |
-29 |
|
|
0:30 |
Construction Work Done (4Q) |
-4.6% |
-0.8% |
11.7% (R-) |
|
|
0:30 |
Private Sector Credit (MoM) (JAN) |
0.2% |
0.3% |
0.3% |
|
|
0:30 |
Private Sector Credit (YoY) (JAN) |
3.5% |
3.6% |
3.5% |
|
|
0:30 |
Retail Sales s.a. (MoM) (JAN) |
0.3% |
0.3% |
-0.1% |
|
|
2:00 |
Money Supply M3 (YoY) (JAN) |
5.4% |
- |
6.0% |
|
|
4:00 |
JPY |
Vehicle Production (YoY) (JAN) |
18.6% |
- |
13.4% |
|
5:00 |
JPY |
Construction Orders (YoY) (JAN) |
24.6% |
- |
1.5% |
|
5:00 |
JPY |
Annualized Housing Starts (JAN) |
0.822M |
0.808M |
0.783M |
|
5:00 |
JPY |
Housing Starts (YoY) (JAN) |
-1.1% |
-3.3% |
-7.3% |
Euro Session: What to Expect
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
7:00 |
EUR |
German Import Price Index (MoM) (JAN) |
0.7% |
0.3% |
Low |
|
7:00 |
EUR |
German Import Price Index (YoY) (JAN) |
3.0% |
3.9% |
Low |
|
7:45 |
EUR |
French Consumer Spending (MoM) (JAN) |
0.2% |
-0.7% |
Low |
|
7:45 |
EUR |
French Consumer Spending (YoY) (JAN) |
-2.0% |
-3.1% |
Low |
|
8:00 |
KOF Swiss Leading Indicator (FEB) |
-0.10 |
-0.17 |
Medium |
|
|
8:55 |
EUR |
German Unemployment Change (FEB) |
-5K |
-34K |
High |
|
8:55 |
EUR |
German Unemployment Rate s.a. (FEB) |
6.7% |
6.7% |
Medium |
|
9:30 |
Net Consumer Credit (JAN) |
0.2B |
-0.4B |
Medium |
|
|
9:30 |
Net Lending Sec. on Dwellings (JAN) |
0.8B |
0.7B |
Medium |
|
|
9:30 |
Mortgage Approvals (JAN) (JAN) |
54.0K |
52.9K |
Medium |
|
|
9:30 |
M4 Money Supply (MoM) (JAN) |
- |
-1.4% |
Low |
|
|
9:30 |
M4 Money Supply (YoY) (JAN) |
- |
-2.5% |
Low |
|
|
9:30 |
M4 Ex IOFCs 3M Annualised (JAN) |
- |
-0.8% |
Low |
|
|
10:00 |
EUR |
Euro-Zone CPI - Core (YoY) (JAN) |
1.7% |
1.6% |
Low |
|
10:00 |
EUR |
Euro-Zone CPI (MoM) (JAN) |
-0.8% |
0.3% |
Medium |
|
10:00 |
EUR |
Euro-Zone CPI (YoY) (JAN) |
2.7% |
2.7% |
High |
|
10:00 |
CPI - EU Harmonized (MoM) (JAN) |
-0.3% |
0.3% |
Low |
|
|
10:00 |
CPI - EU Harmonized (YoY) (JAN) |
-0.7% |
-0.4% |
Low |
|
|
10:15 |
EUR |
ECB LTRO 3-Year Allotment Announcement |
- |
- |
High |
Critical Levels
|
CCY |
SUPPORT |
RESISTANCE |
|
1.3407 |
1.3521 |
|
|
1.5831 |
1.5978 |
--- 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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