Forex: Dollar May Rise on Fed-Speak, Chinese Data Shakes Asian Markets

2014-03-10 01:53:00

Ilya Spivak, Head Strategist, APAC

Talking Points:

Quiet European, US Economic Calendars Put Spotlight on “Fed-Speak”
US Dollar May Rise if Pro-Taper Evans Comments Follow NFP Report
Aussie Falls, Yen Gains as Chinese Exports Fall Most Since August 2009

A quiet economic data docket in European and US trading hours offers little in terms of market-moving event risk. On the official commentary front, Chicago Fed President Charles Evans is due to come across the wires. While Mr Evans is not a member of the policy-setting FOMC committee this year, traders may be atypically responsive to any clues about the central bank’s thinking that he offers given the absence of other catalysts. Rhetoric supportive of continued “tapering” of QE asset purchases in the context of Friday’s upbeat US employment data may drive the US Dollar higher after prices found support near February’s lows.

The Australian Dollar underperformed to start the trading week in the wake of a dramatically disappointing set of Chinese Trade Balance figures reported over the weekend. The plunge in exports was particularly dramatic, with overseas sales down -18.1% year-on-year to produce the largest drawdown since August 2009. China is Australia’s largest trading partner and the dismal data set fueled concerns that a slowdown in the former country will reverberate in the latter, undermining the probability that the RBA’s next move might be an interest rate hike after the current period of stability.The Japanese Yen traded higher as worrying cues from the world’s second-largest economy weighed on Asian shares and drove demand for the safe-haven currency.

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Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
1:30	CNY	Consumer Price Index (YoY)	2.0%	2.1%	2.5%
1:30	CNY	Producer Price Index (YoY)	-2.0%	-1.9%	-1.6%
21:45	NZD	Manufacturing Activity Volume (QoQ) (4Q)	5.7%	-	1.3%
21:45	NZD	Manufacturing Activity (4Q)	6.3%	-	6.2%
23:50	JPY	Current Account Total (¥) (JAN)	-1589.0B	-1411.8B	-638.6B
23:50	JPY	Adjusted Current Account Total (¥) (JAN)	-588.3B	-548.9B	68.6B
23:50	JPY	Trade Balance - BOP Basis (¥) (JAN)	-2345.4B	-2589.6B	-1047.4B
23:50	JPY	GDP (QoQ) (4Q F)	0.2%	0.2%	0.3%
23:50	JPY	GDP Annualized (4Q F)	0.7%	0.9%	1.0%
23:50	JPY	Nominal GDP (QoQ) (4Q F)	0.3%	0.4%	0.4%
23:50	JPY	GDP Consumer Spending (QoQ) (4Q F)	0.4%	-	0.5%
23:50	JPY	GDP Business Spending (QoQ) (4Q F)	0.8%	-	1.3%
23:50	JPY	GDP Deflator (YoY) (4Q F)	-0.3%	-0.4%	-0.4%
23:50	JPY	Bank Lending incl. Trusts (YoY) (FEB)	2.2%	2.4%	2.3%
23:50	JPY	Bank Lending Banks ex-Trust (FEB)	2.4%	-	2.5%
4:30	JPY	Bankruptcies (YoY) (FEB)	-	-	-7.49%
5:00	JPY	Eco Watchers Survey: Current (FEB)	-	54.1	54.7
5:00	JPY	Eco Watchers Survey: Outlook (FEB)	-	50.5	49

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
8:15	CHF	Retail Sales (Real) (YoY) (JAN)	-	2.3%	Medium
9:30	GBP	Lloyds Employment Confidence (FEB)	-	-2	Low
9:30	EUR	Euro-Zone Sentix Investor Confidence (MAR)	14	13.3	Low