Talking Points:
- Euro Vulnerable if ECB Opts to Clarify Stimulus Expansion Strategy
- Pound Unlikely to Stir on Another Status-Quo BOE Announcement
- Aussie Dollar Gains on Local Jobs Report, Chinese Export Figures
The Australian Dollar outperformed in overnight trade, rising as much as 0.4 percent on average against its leading counterparts. The move followed better-than-expected Employmentfigures that showed the economy added 14,200 in April, topping estimates calling for an 8,800 increase. March data was also upgraded to reflect a 21,900 increase versus the 18,100 gain initially reported. The Aussie found added fuel in upbeat Chinese Trade Balancedata. The trade surplus widened to $18.46 billion, beating forecasts calling for print at $16.7 billion, as exports issued an unexpected 0.9 percent year-on-year gain.
A monetary policy announcement from the European Central Bank (ECB) headlines the economic calendar in European trading hours. Consensus forecasts suggest Mario Draghi and company will opt against introducing additional stimulus despite lingering disinflation fears. We tend to agree: while our long-term outlook does envision an expansion of ECB stimulus efforts, the central bank is likely to wait for the completion of its Asset Quality Review (AQR) to identify gaps in policy transmission before easing further.
Recent comments from the ECB President attempting to talk down the Euro suggest further jawboning may in store however. If that takes the form of a semi-discernible timeline for additional accommodation or more precise explanation of what stimulus delivery mechanism policymakers may opt for, the single currency is likely to come under pressure.
The Bank of England(BOE) is likewise due to update markets on its policy stance. This is likely to amount to another non-event for the British Pound. UK economic news-flow has increasingly deteriorated relative expectations since April’s sit-down of the rate-setting MPC committee. The latest set of inflation figures also proved disappointing, suggesting the economy has some way to go before “spare capacity” is sufficiently absorbed to consider tightening.
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Asia Session
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
23:01 |
GBP |
RICS House Price Balance (APR) |
54% |
55% |
57% |
0:00 |
QV House Prices (YoY) (APR) |
8.4% |
- |
8.8% |
|
1:30 |
AUD |
Participation Rate (APR) |
64.7% |
64.7% |
64.7% |
1:30 |
AUD |
Employment Change (APR) |
14.2K |
8.8K |
21.9K |
1:30 |
AUD |
Unemployment Rate (APR) |
5.8% |
5.9% |
5.8% |
1:30 |
AUD |
Full Time Employment Change (APR) |
14.2K |
- |
-22.7K |
1:30 |
AUD |
Part Time Employment Change (APR) |
0.0K |
- |
44.6K |
2:00 |
CNY |
Trade Balance (APR) |
$18.45B |
$16.70B |
$7.70B |
2:00 |
CNY |
Exports (YoY) (APR) |
0.9% |
-3.0% |
-6.6% |
2:00 |
CNY |
Imports (YoY) (APR) |
0.8% |
-2.1% |
-11.3% |
2:00 |
Tokyo Avg Office Vacancies (APR) |
6.64% |
- |
6.70% |
European Session
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
5:45 |
SECO Consumer Confidence (APR) |
3 |
2 |
Low |
|
6:00 |
EUR |
German Industrial Production (YoY) (MAR) |
4.4% |
4.8% |
Medium |
6:00 |
EUR |
German Industrial Production (MoM) (MAR) |
0.2% |
0.4% |
Medium |
7:00 |
GBP |
Halifax House Price (MoM) (APR) |
0.9% |
-1.1% |
Low |
7:00 |
GBP |
Halifax House Price (3M/Y) (APR) |
9.1% |
8.7% |
Low |
7:15 |
CHF |
Consumer Price Index (MoM) (APR) |
0.1% |
0.4% |
Medium |
7:15 |
CHF |
Consumer Price Index (YoY) (APR) |
0.1% |
0.0% |
Medium |
7:15 |
CHF |
CPI - EU Harmonized (MoM) (APR) |
- |
0.6% |
Medium |
7:15 |
CHF |
CPI - EU Harmonized (YoY) (APR) |
- |
-0.1% |
Medium |
11:00 |
GBP |
Bank of England Rate Decision |
0.50% |
0.50% |
High |
11:00 |
GBP |
BOE Asset Purchase Target |
£375B |
£375B |
High |
11:45 |
EUR |
ECB Marginal Lending Facility |
0.75% |
0.75% |
High |
11:45 |
EUR |
ECB Deposit Facility Rate |
0.00% |
0.00% |
High |
11:45 |
EUR |
European Central Bank Rate Decision |
0.25% |
0.25% |
High |
12:30 |
EUR |
ECB’s Draghi Holds Press Conference |
- |
- |
High |
Critical Levels
CCY |
Supp 3 |
Supp 2 |
Supp 1 |
Pivot Point |
Res 1 |
Res 2 |
Res 3 |
1.3862 |
1.3891 |
1.3901 |
1.3920 |
1.3930 |
1.3949 |
1.3978 |
|
1.6893 |
1.6928 |
1.6940 |
1.6963 |
1.6975 |
1.6998 |
1.7033 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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