Talking Points
- UK GDP Slump May Weigh on Pound Amid Building Rate Cut Bets
- Euro at Risk if Soft German IFO Print Bolsters ECB Easing Outlook
- US Dollar Little Changed Despite Sharp Risk Aversion in Asian Trade
The preliminary set of UK Gross Domestic Product figures headlines the economic calendar in European hours. Expectations call for output to shrink for a third consecutive period in the three months through June. This may reinforce expectations of further easing that emerged following last week’s release of minutes from this month’s Bank of England policy meeting, weighing on the British Pound. Meanwhile, the German IFO survey of business confidence is expected to show sentiment fell to a 28-month low in July. The result may encourage bets on another ECB interest rate cut in August, marginally compounding downward pressure on the Euro, though follow-through could prove limited considering traders already price in an 82.5 percent chance of a further 25bps decrease.
The US Dollar was little changed against its leading counterparts in overnight trade despite a sharp drop across Asian stock exchanges that may have been expected to boost the go-to haven currency. The move in equities appeared to reflect catch-up trade to risk aversion seen on Wall Street rather than a response to something discretely new, allowing for consolidation in the FX space even as the MSCI Asia Pacific regional benchmark stock index slumped 1.2 percent. The New Zealand Dollar narrowly underperformed ahead of tomorrow’s RBNZ interest rate decision. Meanwhile the Australian Dollar was effectively flat on the session after second-quarter CPI figures printed broadly in line with expectations, offering no additional guidance for the RBA policy outlook.
Asia Session: What Happened
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
22:45 |
NZD |
Trade Balance (NZ$) (JUN) |
331M |
2M |
232M (R-) |
22:45 |
NZD |
Trade Balance YTD (NZ$) (JUN) |
-747M |
-1001M |
-876M (R+) |
22:45 |
NZD |
Exports (NZ$) (JUN) |
4.20B |
3.83B |
4.41B (R-) |
22:45 |
NZD |
Imports (NZ$) (JUN) |
3.87B |
3.82B |
4.18B (R+) |
23:50 |
Adj Merch Trade Balance (¥) (JUN) |
-300.8B |
-402.0B |
-618.3B (R+) |
|
23:50 |
JPY |
Merch Trade Balance Total (¥) (JUN) |
61.7B |
-140.0B |
-910.4B (R-) |
23:50 |
JPY |
Merch Trade Exports (YoY) (JUN) |
-2.3 |
-3 |
10 |
23:50 |
JPY |
Merch Trade Imports (YoY) (JUN) |
-2.2 |
1.1 |
9.3 |
0:00 |
AUD |
Conference Board Leading Index (MAY) |
0.4% |
- |
-1.3% (R+) |
1:00 |
AUD |
DEWR Internet Skilled Vacancies (MoM) (JUN) |
-1.8% |
- |
-1.7% (R-) |
1:30 |
AUD |
Consumer Prices Index (QoQ) (2Q) |
0.5% |
0.6% |
0.1% |
1:30 |
AUD |
Consumer Prices Index (YoY) (2Q) |
1.2% |
1.3% |
1.6% |
1:30 |
AUD |
RBA Trimmed Mean (QoQ) (2Q) |
0.5% |
0.6% |
0.4% (R+) |
1:30 |
AUD |
RBA Trimmed Mean (YoY) (2Q) |
2.0% |
1.9% |
2.2% |
1:30 |
AUD |
RBA Weighted Median (QoQ) (2Q) |
0.7% |
0.6% |
0.4% |
1:30 |
AUD |
RBA Weighted Median (YoY) (2Q) |
1.9% |
1.9% |
2.1% |
Euro Session: What to Expect
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
6:45 |
EUR |
French Business Survey Overall Demand (JUL) |
- |
3 |
Low |
8:00 |
EUR |
German IFO - Business Climate (JUL) |
104.5 |
105.3 |
Medium |
8:00 |
EUR |
German IFO - Current Assessment (JUL) |
113 |
113.9 |
Medium |
8:00 |
EUR |
German IFO – Expectations (JUL) |
96.8 |
97.3 |
Medium |
8:00 |
EUR |
Italian Consumer Confidence Index (SA) (JUL) |
85 |
85.3 |
Low |
8:30 |
GBP |
Gross Domestic Product (QoQ) (2Q A) |
-0.2% |
-0.3% |
High |
8:30 |
GBP |
Gross Domestic Product (YoY) (2Q A) |
-0.3% |
-0.2% |
High |
8:30 |
GBP |
Index of Services (MoM) (MAY) |
0.2% |
0.0% |
Low |
8:30 |
GBP |
Index of Services (3Mo3M) (MAY) |
0.3% |
0.0% |
Low |
10:00 |
GBP |
CBI Trends Total Orders (JUL) |
-10 |
-11 |
Low |
10:00 |
GBP |
CBI Trends Selling Prices (JUL) |
0 |
2 |
Low |
10:00 |
GBP |
CBI Business Optimism (JUL) |
0 |
22 |
Low |
Critical Levels
CCY |
SUPPORT |
RESISTANCE |
1.2023 |
1.2176 |
|
1.5478 |
1.5580 |
--- 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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