US Dollar at Risk as Stock Futures Hint at Ebbing Haven Demand

2012-07-31 07:05:00 Ilya Spivak, Head Strategist, APAC

Talking Points

US Dollar May Weaken as S&P 500 Futures Point to Risk-on Mood
Euro Unlikely to Find Volatility in German Jobs, Eurozone CPI Data

The US Dollar was little changed against its top counterparts as traders shied away from committing to a firm directional bias in the absence of major market-moving event risk. S&P 500 stock index futures are pointing higher, hinting the greenback may find itself on the defensive as haven demand dries up.

German Unemployment and Eurozone CPI figures headline the calendar in European hours. The former report is expected to show the economy shed 7,000 jobs for a second consecutive month in July, keeping the Unemployment Rate at 6.8 percent. Meanwhile, the latter is forecast to keep the benchmark inflation rate at 2.4 percent, also unchanged from the previous month.

Barring wild deviations from expectations, neither seems to present much in terms of market-moving potential as investors wait for the ECB monetary policy announcement later in the week. Traders are pricing in an 82.5 percent probability of another 25bps rate cut, so risks appear skewed to the upside in the event that data outperforms and forces traders to reposition for reduced bets on further easing.

Asia Session: What Happened

GMT	CCY	EVENT	ACT	EXP	PREV
23:01	GBP	GfK Consumer Confidence Survey (JUL)	-29	-29	-29
23:15	JPY	Nomura/JMMA Manufacturing PMI (JUL)	47.9	-	49.9
23:30	JPY	Jobless Rate (JUN)	4.3%	4.4%	4.4%
23:30	JPY	Job-To-Applicant Ratio (JUN)	0.82	0.82	0.81
23:30	JPY	Household Spending (YoY) (JUN)	1.6%	2.9%	4.0%
23:50	JPY	Loans & Discounts Corp (YoY) (JUN)	0.1%	-	-0.53%
1:00	NZD	NBNZ Activity Outlook (JUL)	24	-	20.8
1:00	NZD	NBNZ Business Confidence (JUL)	15.1	-	12.6
1:30	JPY	Labor Cash Earnings (YoY) (JUN)	-0.6%	0.0%	-1.1% (R-)
1:30	AUD	Private Sector Credit (MoM) (JUN)	0.3%	0.4%	0.5%
1:30	AUD	Private Sector Credit (YoY) (JUN)	4.4%	4.4%	4.0%
1:30	AUD	Building Approvals (MoM) (JUN)	-2.5%	-15.0%	27.0% (R-)
1:30	AUD	Building Approvals (YoY) (JUN)	10.2%	-5.5%	9.1% (R-)
3:00	NZD	Money Supply M3 (YoY) (JUN)	5.7%	-	6.3%
5:00	JPY	Annualized Housing Starts (JUN)	0.837M	0.916M	0.903M
5:00	JPY	Construction Orders (YoY) (JUN)	4.6%	-	-0.9%
5:00	JPY	Housing Starts (YoY) (JUN)	-0.2%	9.4%	9.3%

Euro Session: What to Expect

GMT	CCY	EVENT	EXP	PREV	IMPACT
6:00	EUR	German Retail Sales (MoM) (JUN)	0.5%	-0.3%	Medium
6:00	EUR	German Retail Sales (YoY) (JUN)	0.4%	-1.1%	Medium
6:00	CHF	UBS Consumption Indicator (JUN)	-	1.05	Low
6:45	EUR	French Consumer Spending (MoM) (JUN)	0.2%	0.4%	Low
6:45	EUR	French Consumer Spending (YoY) (JUN)	0.4%	0.6%	Low
6:45	EUR	French Producer Prices (MoM) (JUN)	-0.3%	-1.0%	Low
6:45	EUR	French Producer Prices (YoY) (JUN)	2.1%	2.2%	Low
7:55	EUR	German Unemployment Change (JUL)	7K	7K	High
7:55	EUR	German Unemployment Rate s.a. (JUL)	6.8%	6.8%	Medium
8:00	EUR	Italian Unemployment Rate s.a. (JUN P)	10.3%	10.1%	Low
9:00	EUR	Italian CPI – EU Harmonized (MoM) (JUL P)	-1.7%	0.2%	Low
9:00	EUR	Italian CPI – EU Harmonized (YoY) (JUL P)	3.6%	3.6%	Low
9:00	EUR	Italian PPI (MoM) (JUN)	-0.2%	-0.3%	Low
9:00	EUR	Italian PPI (YoY) (JUN)	2.0%	2.3%	Low
9:00	EUR	Italian CPI (NIC incl. tobacco) (MoM) (JUL P)	0.2%	0.2%	Low
9:00	EUR	Italian CPI (NIC incl. tobacco) (YoY) (JUL P)	3.2%	3.3%	Low
9:00	EUR	Euro-Zone Unemployment Rate (JUN)	11.2%	11.1%	Medium
9:00	EUR	Euro-Zone CPI Estimate (YoY) (JUL)	2.4%	2.4%	High