Euro Reaction to German, EZ Data Hinges on Draghi Commentary

2013-04-16 08:05:00

Ilya Spivak, Head Strategist, APAC

The Euro will look to comments from ECB President Mario Draghi to guide forex traders’ interpretation of German ZEW and region-wide CPI data.

Talking Points

Euro Looks to Draghi Comments as Filter to Interpret German, EZ Data
British Pound Unlikely to Find Market-Moving Cues in Flat Inflation Reading
Dollar and Yen Retreat, Kiwi Outperforms as Markets Digest Risk Aversion

TheGerman ZEWSurvey of investor confidence headlines the economic calendar in European trading hours. The report is expected to show sentiment deteriorated for the first time in five months. Meanwhile, year-on-year Eurozone CPI is seen ticking downward to 1.7 percent, the lowest since August 2010.

While such outcomes amplify the case for added ECB stimulus, ample evidence to this effect has already proven ineffective at swaying the central bank to step up easing over recent months. This means the Euro is unlikely to find a lasting driver in either data point absent clear-cut cues in favor of more accommodation from ECB President Mario Draghi when he speaks in the European Parliament later in the day.

Separately,UK Consumer Price Index figures are forecast to put the headline year-on-year inflation rate at 2.8 percent in March, unchanged from the prior month. A print in line with expectations is unlikely to offer an impetus for British Pound volatility in that it would mean relatively little for BOE policy expectations.

The US Dollar and Japanese Yen corrected lower in overnight trade as financial markets digested yesterday’s aggressive gains amid a sharp flare-up of market-wide risk aversion. The New Zealand Dollar outperformed, capitalizing on the most forgiving monetary policy outlook in the G10 FX space (according to priced-in expectations tracked by Credit Suisse) to add as much as 0.9 percent on average against its leading counterparts.

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Asia Session:

GMT	CCY	EVENT	ACT	EXP	PREV
1:30	AUD	RBA Policy Meeting Minutes	-	-	-
1:30	AUD	New Motor Vehicle Sales (MoM)	-0.6%	-	-0.1%
1:30	AUD	New Motor Vehicle Sales (YoY)	4.5%	-	9.4%

Euro Session:

GMT	CCY	EVENT	EXP/ACT	PREV	IMPACT
7:15	CHF	Producer & Import Prices (YoY)	-0.3% (A)	0.1%	Low
7:15	CHF	Producer & Import Prices (MoM)	0.0% (A)	0.1%	Low
8:30	GBP	PPI Input n.s.a. (MoM) (MAR)	-0.2%	3.2%	Low
8:30	GBP	PPI Input n.s.a. (YoY) (MAR)	0.7%	2.5%	Low
8:30	GBP	PPI Output n.s.a. (MoM) (MAR)	0.3%	0.8%	Medium
8:30	GBP	PPI Output n.s.a. (YoY) (MAR)	2.0%	2.3%	Medium
8:30	GBP	PPI Output Core n.s.a. (MoM) (MAR)	0.2%	0.3%	Low
8:30	GBP	PPI Output Core n.s.a. (YoY) (MAR)	1.4%	1.3%	Low
8:30	GBP	CPI (MoM) (MAR)	0.3%	0.7%	High
8:30	GBP	CPI (YoY) (MAR)	2.8%	2.8%	High
8:30	GBP	Core CPI (YoY) (MAR)	2.3%	2.3%	High
8:30	GBP	Retail Price Index (MAR)	248.7	247.6	Low
8:30	GBP	Retail Price Index (MoM) (MAR)	0.4%	0.7%	Low
8:30	GBP	Retail Price Index (YoY) (MAR)	3.3%	3.2%	Low
8:30	GBP	RPI Ex Mort Int.Payments (YoY) (MAR)	3.2%	3.2%	Low
8:30	GBP	ONS House Price (YoY) (FEB)	2.4%	2.2%	Low
9:00	EUR	Euro-Zone CPI (MoM) (MAR)	1.2%	0.4%	Medium
9:00	EUR	Euro-Zone CPI (YoY) (MAR)	1.7%	1.7%	Medium
9:00	EUR	Euro-Zone CPI - Core (YoY) (MAR)	1.4%	1.3%	Low
9:00	EUR	Euro-Zone ZEW Survey (Econ Sentiment) (APR)	-	33.4	Medium
9:00	EUR	German ZEW Survey (Curr Situation) (APR)	14.0	13.6	High
9:00	EUR	German ZEW Survey (Econ Sentiment) (APR)	41.0	48.5	High
13:00	EUR	ECB’s Draghi Speaks in European Parliament	-	-	High