British Pound May Overlook Soft UK Inflation Figures

2015-01-13 06:51:00

Talking Points:

British Pound May Not Find Lasting Weakness in Soft UK Inflation Numbers
Yen Falls as S&P 500 Futures Rise, NZ Dollar Declines on RBNZ Outlook
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December’s UK CPI data headlines the economic calendar in European trading hours. Expectations call for the headline year-on-year inflation rate to edge downward to 0.7 percent, the lowest in over 12 years. A soft result may not yield significant downside pressure on the British Pound however.

The core CPI reading (which excludes the impact of energy prices, among other volatile items) is seen edging upward to 1.3 percent from the 1.2 percent reading posted in November. This suggests that – similarly to the Federal Reserve – the Bank of England may chalk up the slide in headline price growth to the transitory impact of the sinking cost of crude oil, meaning it won’t necessarily interpret a weak result as reason enough to delay interest rate hikes.

The Japanese Yen underperformed in otherwise quiet overnight trade, rising as much as S&P 500 futures recovered, pointing to firming risk appetite and putting pressure on the safety-linked currency. The New Zealand Dollar likewise traded lower as the island nation’s bond yields fell, hinting at ebbing RBNZ interest rate hike expectations. We have entered short NZDUSD.

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Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
21:00	NZD	ANZ Truckometer Heavy (MoM) (DEC)	2.1%	-	-2.8%
22:30	AUD	ANZ Roy Morgan Weekly Consumer Conf	112.0	-	111.7
23:50	JPY	BoP Current Account Balance (NOV)	¥433.0B	¥139.5B	¥833.4B
23:50	JPY	BoP Current Account Adjusted (NOV)	¥914.5B	¥692.5B	¥947.0B
23:50	JPY	Trade Balance BoP Basis (NOV)	-¥636.8B	-¥734.0B	-¥766.6B
23:50	JPY	Bank Lending Incl Trusts (YoY) (DEC)	2.6%	-	2.7%
23:50	JPY	Bank Lending Ex-Trusts (YoY) (DEC)	2.7%	-	2.8%
0:01	GBP	BRC Sales Like-For-Like (YoY) (DEC)	-0.4%	1.0%	0.9%
2:04	CNY	Trade Balance (DEC)	$49.61B	$49.00B	$54.48B
2:04	CNY	Exports (YoY) (DEC)	9.7%	6.0%	4.7%
2:04	CNY	Imports (YoY) (DEC)	-2.4%	-6.2%	-6.7%
4:30	JPY	Bankruptcies (YoY) (DEC)	-8.53%	-	-14.61%
5:00	JPY	Eco Watchers Survey Current (DEC)	45.2	44.0	41.5
5:00	JPY	Eco Watchers Survey Outlook (DEC)	46.7	-	44.0

European Session

GMT	CCY	EVENT	EXP/ACT	PREV	IMPACT
7:00	EUR	Germany Wholesale Price Index (MoM) (DEC)	-	-0.7%	Low
7:00	EUR	Germany Wholesale Price Index (YoY) (DEC)	-	-1.1%	Low
9:00	EUR	Italy Industrial Production (MoM) (NOV)	0.1%	-0.1%	Low
9:00	EUR	Italy Industrial Production wda (YoY) (NOV)	-2.7%	-3.0%	Low
9:00	EUR	Italy Industrial Production nsa (YoY) (NOV)	-	-3.0%	Low
9:30	GBP	CPI (MoM) (DEC)	0.1%	-0.3%	High
9:30	GBP	CPI (YoY) (DEC)	0.7%	1.0%	High
9:30	GBP	CPI Core (YoY) (DEC)	1.3%	1.2%	High
9:30	GBP	RPI (MoM) (DEC)	0.1%	-0.2%	Medium
9:30	GBP	RPI (YoY) (DEC)	1.6%	2.0%	Medium
9:30	GBP	RPI Ex Mort Int.Payments (YoY) (DEC)	1.6%	2.0%	Medium
9:30	GBP	PPI Input NSA (MoM) (DEC)	-2.6%	-1.0%	Low
9:30	GBP	PPI Input NSA (YoY) (DEC)	-11.5%	-8.8%	Low
9:30	GBP	PPI Output NSA (MoM) (DEC)	-0.3%	0.2%	Medium
9:30	GBP	PPI Output NSA (YoY) (DEC)	-0.4%	-0.1%	Medium
9:30	GBP	PPI Output Core NSA (MoM) (DEC)	-0.1%	0.5%	Low
9:30	GBP	PPI Output Core NSA (YoY) (DEC)	1.2%	1.4%	Low
9:30	GBP	ONS House Price (YoY) (NOV)	9.8%	10.4%	Medium