Talking Points:
- Euro May Face Selling Pressure as the ECB Reveals Bank Stress Test Criteria
- Japanese Yen May Rise as S&P 500 Futures Hint at Oncoming Risk Aversion
- Aussie Dollar Edges Higher as Asian Shares Correct After Yesterday’s Selloff
A relatively muted economic calendar in European and US trading hours may see investors focus on operational details of the ECB’s bank stress tests to be conducted as part of the central bank’s Asset Quality Review (AQR). We noted earlier in the week that the AQR’s completion is a likely pre-requisite for Mario Draghi and company to expand stimulus measures.
With that in mind, the perceived severity of the bank stress tests will be noteworthy in that if markets think lenders will have to substantially beef up balance sheets, this might force a deeper retrenchment on lending. That in turn has scope to amplify the perceived need for the ECB liquidity provision, building out easing bets and weighing on the Euro as prices stall at chart resistance.
On the sentiment front, S&P 500 futures are pointing cautiously lower ahead of the opening bell in Europe, warning of a risk-off mood emerging in the hours ahead. The Japanese Yen continues to show a formidable inverse correlation with the MSCI World Stock Index, hinting that deteriorating sentiment is likely to boost the go-to funding currency.
Most major currencies were little-changed in overnight trade. The Australian and New Zealand Dollars narrowly outperformed, tracking Asian stock exchanges higher as risk appetite recovered following yesterday’s selloff in the wake of the weekend’s dismal Chinese trade data.
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Asia Session
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
20:00 |
REINZ Housing Price Index (FEB) |
3835.9 |
- |
3756.3 |
|
|
20:00 |
REINZ House Sales (YoY) (FEB) |
-7.6% |
- |
-4.3% |
|
|
20:00 |
NZD |
REINZ House Price (MoM) (FEB) |
2.1% |
- |
-2.4% |
|
21:00 |
NZD |
ANZ Truckometer Heavy (MoM) (FEB) |
2.3% |
- |
0.0% |
|
21:45 |
NZD |
Card Spending Total (MoM) (FEB) |
0.6% |
- |
-0.1% |
|
21:45 |
NZD |
Card Spending Retail (MoM) (FEB) |
0.9% |
0.9% |
-0.5% |
|
23:50 |
Japan Money Stock M3 (YoY) (FEB) |
3.2% |
3.5% |
3.5% |
|
|
23:50 |
Japan Money Stock M2 (YoY) (FEB) |
4.0% |
4.4% |
4.3% |
|
|
0:01 |
BRC Sales Like-For-Like (YoY) (FEB) |
-1.0% |
1.8% |
3.9% |
|
|
0:30 |
NAB Business Confidence (FEB) |
7 |
- |
9 |
|
|
0:30 |
NAB Business Conditions (FEB) |
0 |
- |
5 |
|
|
3:00 |
JPY |
BOJ 2014 Monetary Base Target |
¥270T |
¥270T |
¥270T |
|
6:00 |
JPY |
Machine Tool Orders (YoY) (FEB P) |
26.0% |
- |
40.3% |
European Session
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
7:00 |
German Labor Costs (YoY) (4Q) |
- |
1.6% |
Low |
|
|
7:00 |
German Labor Costs (QoQ) (4Q) |
- |
-0.3% |
Low |
|
|
7:00 |
EUR |
German Trade Balance (€) (JAN) |
15.0B |
14.2B |
Low |
|
7:00 |
EUR |
German Current Account (€)(JAN) |
15.3B |
23.5B |
Low |
|
7:00 |
EUR |
German Exports s.a. (MoM) (JAN) |
1.5% |
-1.0% |
Low |
|
7:00 |
EUR |
German Imports s.a. (MoM) (JAN) |
1.4% |
-1.4% |
Low |
|
8:15 |
Industrial Output (YoY) (4Q) |
1.0% |
0.7% |
Low |
|
|
9:00 |
EUR |
Italian GDP (QoQ) (4Q F) |
0.1% |
0.1% |
Medium |
|
9:00 |
EUR |
Italian GDP (YoY) (4Q F) |
-0.8% |
-0.8% |
Medium |
|
9:30 |
Industrial Production (MoM) (JAN) |
0.2% |
0.4% |
Medium |
|
|
9:30 |
GBP |
Industrial Production (YoY) (JAN) |
3.0% |
1.8% |
Medium |
|
9:30 |
GBP |
Manufacturing Production (MoM) (JAN) |
0.3% |
0.3% |
Medium |
|
9:30 |
GBP |
Manufacturing Production (YoY) (JAN) |
3.3% |
1.5% |
Medium |
Critical Levels
|
CCY |
Supp 3 |
Supp 2 |
Supp 1 |
Pivot Point |
Res 1 |
Res 2 |
Res 3 |
|
1.3807 |
1.3843 |
1.3860 |
1.3879 |
1.3896 |
1.3915 |
1.3951 |
|
|
1.6418 |
1.6545 |
1.6595 |
1.6672 |
1.6722 |
1.6799 |
1.6926 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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