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Currency Markets Set Sights on G20 as Greek Impasse Looms Large

Currency Markets Set Sights on G20 as Greek Impasse Looms Large

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • Australian, NZ Dollars Briefly Advance on Soft Chinese Inflation Figures
  • G20 Meeting in Focus as Greece/EU Impasse Continues to Loom Large
  • See Economic Data Directly on Your Charts with the DailyFX News App

The major currencies were little-changed in overnight trade, with markets seemingly waiting for higher-profile event risk on tap in the latter half of the week before resigning to directional commitment. The Australian and New Zealand Dollars rallied following an unexpectedly soft set of Chinese CPI figures, but gains proved short-lived.

The report showed the headline year-on-year inflation rate slowed to just 0.8 percent, the weakest since November 2009. That probably fueled hopes for greater stimulus expansion in the world’s second-largest economy, an outcome that could bode well for Australian and New Zealand export prospects and boost overall growth. That in turn might limit the scope for further RBA and RBNZ interest rate cuts.

Looking ahead, a quiet day on the European economic data docket will put Greece-related news-flow at the forefront as G20 finance ministers gather in Istanbul. Officials are surely unnerved by the possible implications of forced “Grexit” for global growth and financial stability. Meanwhile, various members of the new anti-austerity government in Athens continue to trade barbs with the Germany-led contingent of EU member states that insist Greece must follow through on the terms of its bailout.

While the G20 sit-down is unlikely to deliver the final word on the crisis, traders will be keen to size up the tenor of rhetoric coming out of the event to get a sense for where things are headed. Representatives of economies outside the EU will surely press both sides to strike a deal for the collective benefit of everyone. If such efforts appear to pave the way for a breakthrough, firming sentiment may weigh on the safe-haven Japanese Yen and the Euro is likely to receive a healthy boost on waning redenomination fears.

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Asia Session

GMTCCYEVENTACTEXPPREV
21:00NZDANZ Truckometer Heavy (MoM) (JAN)0.9%-3.4%
22:30AUDANZ Roy Morgan Weekly Consumer Conf111.7-112.4
23:50JPYTertiary Industry Index (MoM) (DEC)-0.3%0.0%0.2%
23:50JPYJapan Money Stock M2 (YoY) (JAN)3.6%3.4%3.6%
23:50JPYJapan Money Stock M3 (YoY) (JAN)2.8%2.9%2.9%
23:50JPYHousing Loans (YoY) (4Q)2.5%-2.8%
0:01GBPBRC Sales Like-For-Like (YoY) (JAN)0.2%0.5%-0.4%
0:30AUDHouse Price Index (YoY) (4Q)6.8%7.1%9.0%
0:30AUDHouse Price Index (QoQ) (4Q)1.9%1.8%1.4%
0:30AUDNAB Business Conditions (JAN)2-2
0:30AUDNAB Business Confidence (JAN)3.0%-2
1:30CNYPPI (YoY) (JAN)-4.3%-3.8%-3.3%
1:30CNYCPI (YoY) (JAN)0.8%1.1%1.5%

European Session

GMTCCYEVENTEXP/ACTPREVIMPACT
6:45CHFUnemployment Rate (JAN)3.5%3.4%Medium
6:45CHFUnemployment Rate s.a. (JAN)3.1% (A)3.2%Medium
8:15CHFCPI (MoM) (JAN)-0.4% (A)-0.5%Medium
8:15CHFCPI (YoY) (JAN)-0.5% (A)-0.3%Medium
8:15CHFCPI - EU Harmonized (MoM) (JAN)-0.6% (A)0.0%Low
8:15CHFCPI - EU Harmonized (YoY) (JAN)-0.1% (A)-0.1%Low
9:30GBPIndustrial Production (MoM) (DEC)-0.1%-0.1%Medium
9:30GBPIndustrial Production (YoY) (DEC)0.5%1.1%Medium
9:30GBPManufacturing Production (MoM) (DEC)-0.1%0.7%Medium
9:30GBPManufacturing Production (YoY) (DEC)2.0%2.7%Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.11401.12291.12771.13181.13661.14071.1496
GBPUSD1.50921.51601.51881.52281.52561.52961.5364

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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