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Pound Eyes Carney Comments, Euro May Overlook German Data

Pound Eyes Carney Comments, Euro May Overlook German Data

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • British Pound Looks to Carney Testimony to Guide BOE Rate Hike Timeline
  • Euro May Ignore German GDP, IFO as Near-Term ECB Bets Predominate
  • TrackEconomic News Directly on Your Charts with the DailyFX News App

UK monetary policy expectations are in focus in European trading hours as investors set sights on scheduled testimony from Bank of England Governor Mark Carney. Imported disinflation courtesy of crude oil prices and the exchange rate remains the key issue for policymakers as they work out the stimulus withdrawal.

With that in mind, traders will closely monitor Carney’s comments to gauge his confidence in putting price growth back on a path toward the 2 percent target in time to begin tightening in the second half of 2016. The compounding of headwinds from a possible ECB stimulus expansion next month and the expected difficulty of overcoming them ought to be particularly interesting. An assured tone may boost the British Pound while a timid one could have the opposite effect.

The final revision of third-quarter German GDP figures ought to pass with relatively little fanfare considering its limited implications for near-term ECB policy trends. As in the UK, the currency bloc’s monetary policy authority is primarily focused on overcoming disinflation and their looming decision on ramping up accommodation will have most to do with boosting price growth expectations, not stoking near-term activity.

November’s German IFO Survey of business confidence is also on tap. It ought to be interesting to see if bets on greater monetary policy support will drive a larger than expected increase in the forward-looking Expectations index. If so, this could hint at a dovish tilt in the priced-in outlook that could shape Euro trading patterns in response to December’s policy announcement. As with GDP however, a volatile near-term response seems unlikely.

Losing Money Trading Forex? This Might Be Why.

Asia Session

GMTCCYEVENTACTEXPPREV
22:30AUDANZ Roy Morgan Weekly Consumer Conf114.5-115.9
01:35JPYNikkei Japan PMI Mfg (NOV P)52.8-52.4
05:00JPYSupermarket Sales (YoY) (OCT)2.8%-2.9%

European Session

GMTCCYEVENTEXPPREVIMPACT
07:00EURGerman GDP s.a. (QoQ) (3Q F)0.3%0.3%Medium
07:00EURGerman GDP w.d.a. (YoY) (3Q F)1.7%1.7%Medium
07:00EURGerman GDP n.s.a. (YoY) (3Q F)1.8%1.8%Medium
07:00EURGerman Private Consumption (QoQ) (3Q)0.5%0.2%Low
07:00EURGerman Government Spending (QoQ) (3Q)0.4%0.3%Low
07:00EURGerman Capital Investment (QoQ) (3Q)0.0%-0.4%Low
07:00EURGerman Construction Investment (QoQ) (3Q)0.1%-1.2%Low
07:00EURGerman Domestic Demand (QoQ) (3Q)0.7%-0.3%Low
07:00EURGerman Exports (QoQ) (3Q)0.4%2.2%Low
07:00EURGerman Imports (QoQ) (3Q)1.0%0.8%Low
09:00EURGerman IFO Business Climate (NOV)108.2108.2Medium
09:00EURGerman IFO Current Assessment (NOV)112.4112.6Medium
09:00EURGerman IFO Expectations (NOV)104.0103.8Medium
09:05AUDRBA's Stevens Speaks at ABE Dinner --Medium
10:00GBPBOE Carney, Haldane Testify to Treasury Cmte.--Medium
11:00GBPCBI Reported Sales (NOV)25.019.0Low

Critical Levels

CCYSupp 3Supp 2Supp 1Pivot PointRes 1Res 2Res 3
EURUSD1.05011.05651.06001.06291.06641.06931.0757
GBPUSD1.49421.50451.50851.51481.51881.52511.5354

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

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