US Dollar May Correct Lower as Retail Sales Data Cools Fed Outlook

2015-03-12 06:48:00

Talking Points:

Soft Retail Sales Data May Cool Fed Rate Hike Bets, Push US Dollar Lower
NZ Dollar Soars on RBNZ Rate Decision, Aussie Recovers on Jobs Report
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A quiet economic calendar in European trading hours is likely to see traders looking ahead to February’s US Retail Sales report. Consensus forecasts call for 0.3 percent increase, which would mark the strongest outcome in three months. Last week’s payrolls data notwithstanding however, US economic news-flow has tended to underperform relative to expectations since late December. This warns that analysts may be overestimating the economy’s vigor and opening the door for a downside surprise. Such an outcome may cool Fed rate hike speculation, weighing on the US Dollar.

The New Zealand Dollar outperformed in overnight after the RBNZ signaled it was in no hurry to cut interest rates at its monetary policy meeting. Governor Graeme Wheeler highlighted a range of factors underpinning strong economic growth and dismissed soft inflation readings in the near term as largely reflective of the transitory impact of oil prices. Speaking directly to the benchmark lending rate, Wheeler projected “a period of stability” ahead.

The Australian Dollar likewise advanced following a narrowly better-than-expected Employment report. The figures showed the economy added a net 15,600 jobs in February, narrowly topping economists’ expectations for 15,000 increase. The unemployment rate declined to 6.3 percent having hit a 13-year high at 6.4 percent in the prior month.

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Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
20:00	NZD	RBNZ Interest Rate Decision	3.5%	3.5%	3.5%
21:45	NZD	Food Prices (MoM) (FEB)	-0.7%	-	1.3%
23:50	JPY	BSI Large All Industry (QoQ) (1Q)	1.9	6.0	5.0
23:50	JPY	BSI Large Manufacturing (QoQ) (1Q)	2.4	-	8.1
23:50	JPY	Tertiary Industry Index (MoM) (JAN)	1.4%	0.5%	0.0%
0:00	AUD	Consumer Inflation Expectation (MAR)	3.2%	-	4.0%
0:01	GBP	RICS House Price Balance (FEB)	14%	6%	7%
0:24	NZD	REINZ House Price Index (MoM) (FEB)	0.8%	-	-1.0%
0:24	NZD	REINZ House Sales (YoY) (FEB)	12.6%	-	2.6%
0:24	NZD	REINZ House Price Index (YoY) (FEB)	6.1%	-	7.5%
0:30	AUD	Employment Change (FEB)	15.6K	15.0K	-14.6K
0:30	AUD	Unemployment Rate (FEB)	6.3%	6.4%	6.4%
0:30	AUD	Full Time Employment Change (FEB)	10.3K	-	-30.9K
0:30	AUD	Part Time Employment Change (FEB)	5.3K	-	16.3K
0:30	AUD	Participation Rate (FEB)	64.6%	64.8%	64.7%
0:30	AUD	Credit Card Balances (JAN)	A$50.1B	-	A$51.3B
0:30	AUD	Credit Card Purchases (JAN)	A$21.5B	-	A$27.0B
2:00	JPY	Tokyo Avg Office Vacancies (FEB)	5.31	-	5.36
5:00	JPY	Consumer Confidence Index (FEB)	40.7	-	39.1

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
7:00	EUR	German CPI (MoM) (FEB F)	0.9%	0.9%	Medium
7:00	EUR	German CPI (YoY) (FEB F)	0.1%	0.1%	Medium
7:00	EUR	German CPI - EU Harmonised (MoM) (FEB F)	1.0%	1.0%	Low
7:00	EUR	German CPI - EU Harmonised (YoY) (FEB F)	-0.1%	-0.1%	Low
9:30	GBP	Trade Balance Non EU (£) (JAN)	-3400M	-3796M	Low
9:30	GBP	Total Trade Balance (£) (JAN)	-2300M	-2895M	Low
9:30	GBP	Visible Trade Balance (£) (JAN)	-9650M	-10154M	Low
10:00	EUR	Eurozone Industrial Production (MoM) (JAN)	0.2%	0.0%	Low
10:00	EUR	Eurozone Industrial Production (YoY) (JAN)	0.1%	-0.2%	Low