Talking Points
- Dollar and Yen Rise as Bernanke Stays Mum on QE3, Fitch Downgrades Spain
- S&P 500 Index Futures Point Sharply Lower, Hinting Risk Aversion to Continue
The US Dollar and Japanese Yen rose against their top counterparts in overnight trade as Asian stocks declined, boosting demand for the go-to haven currencies. The MSCI Asia Pacific regional benchmark equity index sank 1.5 percent as traders responded to ambiguity about future stimulus efforts in Federal Reserve Chairman Ben Bernanke’s testimony to the US Congress. Investors were looking for concrete guidance on a QE3 program in light of the latest stretch of disappointing US economic data, hoping additional asset purchases might boost demand from a key market for regional exporters.
Looking ahead, the economic calendar is relatively quiet in European hours, putting risk sentiment trends at the forefront of guiding price action. S&P 500 stock index futures are pointing sharply lower in late Asian trade, hinting that continued risk aversion is likely to continue driving haven currencies higher against the majors. Besides disappointment on the Fed stimulus front, a pickup in Eurozone sovereign concerns compounds downward pressure on risky assets after Fitch slashed Spain’s credit rating. Spreads between periphery 10-year bond yields and benchmark German equivalents are broadly wider and Eurozone sovereign CDS rates are on the upswing.
Asia Session: What Happened
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
23:50 |
JPY |
GDP Annualized (1Q F) |
4.7% |
4.0% |
4.1% |
23:50 |
JPY |
GDP (QoQ) (1Q F) |
1.2% |
1.1% |
1.0% |
23:50 |
JPY |
Nominal GDP (QoQ) (1Q F) |
1.2% |
1.1% |
1.0% |
23:50 |
JPY |
GDP Deflator (YoY) (1Q F) |
-1.3% |
-1.2% |
-1.2% |
23:50 |
JPY |
Current Account Total (¥) |
333.8B |
440.8B |
1589.4B |
23:50 |
JPY |
Adjusted Current Account Total (¥) |
288.6B |
615.6B |
785.5B |
23:50 |
JPY |
Trade Balance - BOP Basis (¥) |
-463.9B |
-450.7B |
4.2B |
23:50 |
JPY |
Current Account Balance (YoY) |
-21.2% |
7.50% |
-8.6% |
23:50 |
JPY |
Bank Lending Banks ex-Trust |
0.4% |
0.40% |
0.4% |
23:50 |
JPY |
Bank Lending incl Trusts (YoY) |
0.3% |
- |
0.3% |
1:30 |
Trade Balance (APR) |
-900M |
-203M |
-1282M (R+) |
|
1:30 |
AUD |
Home Loans (APR) |
0.2% |
0.0% |
0.8% |
1:30 |
AUD |
Investment Lending (APR) |
1.7% |
- |
-1.7% |
1:30 |
AUD |
Value of Loans (MoM) (APR) |
0.2% |
0.0% |
0.7% |
4:30 |
JPY |
Bankruptcies (YoY) (MAY) |
7.2% |
- |
-6.7% |
5:00 |
JPY |
Eco Watchers Survey: Current (MAY) |
47.2 |
50.0 |
50.9 |
5:00 |
JPY |
Eco Watchers Survey: Outlook (MAY) |
48.1 |
50.0 |
50.9 |
Euro Session: What to Expect
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
- |
New Car Registrations (YoY) |
- |
3.3% |
Low |
|
6:00 |
German Current Account (€) (APR) |
11.0B |
19.8B |
Medium |
|
6:00 |
EUR |
German Trade Balance (€)(APR) |
13.0B |
17.4B |
Medium |
6:00 |
EUR |
German Exports s.a. (MoM) (APR) |
-0.7% |
0.8% |
Low |
6:00 |
EUR |
German Imports s.a. (MoM) (APR) |
-0.1% |
1.0% |
Low |
6:30 |
EUR |
Bank of France Business Sentiment (MAY) |
93 |
95 |
Low |
6:45 |
EUR |
French Central Govt. Balance (€) (APR) |
- |
-29.4B |
Low |
6:45 |
EUR |
French Trade Balance (€) (APR) |
-5500M |
-5721M |
Low |
8:30 |
GBP |
BoE/GfK Inflation Next 12 Mths (MAY) |
- |
3.5% |
Low |
8:30 |
GBP |
PPI Input n.s.a. (MoM) |
-1.6% |
-1.5% |
Low |
8:30 |
GBP |
PPI Input n.s.a. (YoY) |
1.2% |
1.2% |
Low |
8:30 |
GBP |
PPI Output n.s.a. (MoM) |
0.1% |
0.7% |
Medium |
8:30 |
GBP |
PPI Output n.s.a. (YoY) |
3.2% |
3.3% |
Medium |
8:30 |
GBP |
PPI Output Core n.s.a. (MoM) |
0.2% |
0.6% |
Low |
8:30 |
GBP |
PPI Output Core n.s.a. (YoY) |
2.3% |
2.3% |
Low |
Critical Levels
CCY |
SUPPORT |
RESISTANCE |
1.2405 |
1.2610 |
|
1.5349 |
1.5609 |
--- 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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