Forex: Aussie Dollar Gains as Jobs Growth, Chinese Exports Outperform

2014-05-08 04:04:00 Ilya Spivak, Head Strategist, APAC

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.

New to FX? START HERE!

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
23:01	GBP	RICS House Price Balance (APR)	54%	55%	57%
0:00	NZD	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	JPY	Tokyo Avg Office Vacancies (APR)	6.64%	-	6.70%

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
5:45	CHF	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