Talking Points:
- British Pound May Decline if UK Inflation Data Undermines BOE Outlook
- US Dollar Gains Before CPI Data That May Boost Fed Rate Hike Chances
- TrackEconomic News Directly on Your Charts with the DailyFX News App
UK CPI figures headline the economic calendar in European trading hours. The core year-on-year inflation rate is expected to print at 1 percent in October, unchanged from the prior month. UK price-growth data broadly deteriorated relative to consensus forecasts since mid-year even as economists have upgraded expectations, opening the door for a downside surprise. Such an outcome may dent BOE rate hike bets and weigh on the British Pound.
Later in the day, US CPI figures capture the spotlight. Core year-on-year inflation is projected to remain at 1.9 percent, putting it within a hair of the Fed’s 2 percent target. This hints that headline price growth is poised to recover as the overhang from last year’s crude oil plunge filters out of calculations in the months ahead. This would help set the stage for a rate hike and may push the US Dollar higher. Indeed, the greenback rose alongside Treasury bond yields overnight, seemingly in anticipation of the CPI release.
The New Zealand Dollar underperformed in overnight trade. Prices fell alongside a drop in front-end bond yields, hinting at a dovish shift in RBNZ monetary policy bets as the likely catalyst. Traders now price in at least one 25bps interest rate cut over the coming 12 months, with an implied probability of 50 percent of seeing the move at next month’s meeting.
Losing Money Trading Forex? This Might Be Why.
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 21:30 | AUD | RBA's Kent Speaks at Sydney Conference | - | - | - |
| 22:30 | AUD | ANZ Roy Morgan Weekly Consumer Conf | 115.9 | - | 116.6 |
| 23:50 | JPY | Housing Loans (YoY) (3Q) | 2.4% | - | 2.4% |
| 00:30 | AUD | RBA November Meeting Minutes | - | - | - |
| 02:00 | NZD | RBNZ 2yr Inflation Expectation (4Q) | 1.85% | - | 1.94% |
| 04:00 | JPY | Tokyo Condominium Sales (YoY) (OCT) | -6.5% | - | -27.2% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 07:00 | EUR | EU27 New Car Registrations (OCT) | - | 9.8% | Low |
| 09:30 | GBP | CPI (MoM) (OCT) | 0.1% | -0.1% | High |
| 09:30 | GBP | CPI (YoY) (OCT) | -0.1% | -0.1% | High |
| 09:30 | GBP | CPI Core (YoY) (OCT) | 1.0% | 1.0% | High |
| 09:30 | GBP | RPI (MoM) (OCT) | 0.1% | -0.1% | Low |
| 09:30 | GBP | RPI (YoY) (OCT) | 0.9% | 0.8% | Low |
| 09:30 | GBP | RPI ex Mort Int. Payments (YoY) (OCT) | 0.9% | 0.9% | Low |
| 09:30 | GBP | PPI Input (MoM) (OCT) | 0.2% | 0.6% | Low |
| 09:30 | GBP | PPI Input (YoY) (OCT) | -12.0% | -13.3% | Low |
| 09:30 | GBP | PPI Output (MoM) (OCT) | -0.1% | -0.1% | Medium |
| 09:30 | GBP | PPI Output (YoY) (OCT) | -1.4% | -1.8% | Medium |
| 09:30 | GBP | PPI Output Core (MoM) (OCT) | 0.0% | 0.1% | Medium |
| 09:30 | GBP | PPI Output Core (YoY) (OCT) | 0.4% | 0.2% | Medium |
| 09:30 | GBP | ONS House Price (YoY) (SEP) | 5.4% | 5.2% | Low |
| 10:00 | EUR | German ZEW Survey Current Situation (NOV) | 55.2 | 55.2 | Medium |
| 10:00 | EUR | German ZEW Survey Expectations (NOV) | 6.0 | 1.9 | Medium |
| 10:00 | EUR | Eurozone ZEW Survey Expectations (NOV) | - | 30.1 | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EURUSD | 1.0505 | 1.0609 | 1.0648 | 1.0713 | 1.0752 | 1.0817 | 1.0921 |
| GBPUSD | 1.5086 | 1.5148 | 1.5175 | 1.5210 | 1.5237 | 1.5272 | 1.5334 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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