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Breaking news

NFP prints at 339k vs estimates of 190k, ave earnings in line at 0.3% MoM

Euro, Yen Eye Risk Trends as Pound Looks to BOE Comments for Direction

Euro, Yen Eye Risk Trends as Pound Looks to BOE Comments for Direction

Ilya Spivak,

Talking Points:

  • Euro, Japanese Yen Look to Risk Sentiment Trends for New Direction Cues
  • British Pound at Risk if Comments from BOE’s Shafik Trim Rate Hike Bets
  • See Economic Releases Directly on Your Charts with the DailyFX News App

Financial markets settled into digestion mode overnight as a quiet economic data docket left traders without an immediate catalyst to fuel continued volatility. The US Dollar corrected cautiously lower having broadly outperformed in the prior session. The move higher followed hawkish comments from Atlanta Fed President Dennis Lockhart, who stressed that the US central bank remains on track to begin raising interest rates this year.

The absence of high-profile event risk may put sentiment trends at the forefront in the hours ahead. S&P 500 futures are ticking lower, hinting at a risk-averse bias. Follow-through along this trajectory may prove supportive for the Euro and the Japanese Yen while weighing on the likes of the Australian, Canadian and New Zealand Dollars.A similar setup was undermined by Mr Lockhart’s comments yesterday and he is in fact due to speak again today, but the markets have probably priced in his posture already and seem unlikely to significantly react further.

Bank of England Deputy Governor Nemat Shafik is also due to speak, with traders monitoring the remarks for clues informing rate hike timing speculation. The markets’ priced-in outlook has markedly deteriorated over the past two months, with investors seemingly doubting the likelihood of tightening at least before the fourth quarter of 2016.

The British Pound may edge lower as expectations deteriorate further if Ms Shafik’s comments echo those of fellow MPC member Jon Cunliffe, who struck a dovish tone yesterday. Cunliffe said he doesn’t see signs of building price pressures and warned that the external environment has weakened, calling for “limited and gradual” rate hikes when tightening does commence.


Asia Session

23:30AUDANZ Roy Morgan Weekly Consumer Conf114.5-105.3
01:30AUDHouse Price Index (QoQ) (2Q)4.7%2.3%1.6%
01:30AUDHouse Price Index (YoY) (2Q)9.8%8.0%6.9%
02:00CNYConference Board Leading Index (AUG)334.4-331.1

European Session

06:00CHFTrade Balance (AUG) (CHF)2.75B3.74BMedium
06:00CHFExports Real (MoM) (AUG)--1.7%Medium
06:00CHFImports Real (MoM) (AUG)--2.5%Medium
08:30GBPPublic Finances (PSNCR) (AUG)--3.0BLow
08:30GBPCentral Government NCR (AUG)--0.2BLow
08:30GBPPublic Sector Net Borrowing (AUG) (£)8.8B-2.1BLow
08:30GBPPSNB ex Banking Groups (AUG) (£)9.2B-1.3BLow
10:00GBPCBI Trends Total Orders (SEP)0.0-1.0Low
10:00GBPCBI Trends Selling Prices (SEP)-5.0-6.0Low
14:00EUREurozone Consumer Confidence (SEP A)-7.0-6.9Medium

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3

--- Written by Ilya Spivak, Currency Strategist for

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.