Talking Points:
- Quiet European data docket puts the spotlight on Fed commentary
- US Dollar may rise as Williams, Yellen boost rate hike speculation
- NZ Dollar outperformed in Asia after demand rose at bill auction
Comments from Federal Reserve officials are in the spotlight as the spectrum of global financial markets return from Easter holiday closures. Remarks from San Francisco Fed President John Williams are first to cross the wires, followed by a much-anticipated speech from Chair Janet Yellen.
We’ve argued that Fed policymakers’ tone following the March FOMC meeting has been aimed at realigning official and market-based policy bets to set the stage for a smooth rate hike in June. Rhetoric stressing domestic progress toward the central bank’s unemployment and inflation objectives while blaming external forces for the pause in the normalization cycle would amount to more of the same. This may boost priced-in tightening expectations, encouraging the US Dollar higher.
The New Zealand Dollar outperformed in otherwise quiet overnight trade. The move higher tracked local bond prices following an auction of 3-, 6-, and 12-month bills to suggest a pickup in demand for NZD-denominated paper. Indeed, bid-to-cover ratios reflected better uptake this time around versus the latest time similar-maturity debt was on offer two weeks ago.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 23:30 | JPY | Jobless Rate (FEB) | 3.3% | 3.2% | 3.2% |
| 23:30 | JPY | Job-To-Applicant Ratio (FEB) | 1.28 | 1.29 | 1.28 |
| 23:30 | JPY | Overall Household Spending (YoY) (FEB) | 1.2% | -1.9% | -3.1% |
| 23:50 | JPY | Retail Trade (YoY) (FEB) | 0.5% | 1.6% | -0.2% |
| 23:50 | JPY | Retail Sales (MoM) (FEB) | -2.3% | -0.9% | -0.4% |
| 23:50 | JPY | Dept. Store, Supermarket Sales (FEB) | 2.2% | 1.6% | 0.9% |
| 05:00 | JPY | Small Business Confidence (MAR) | 48.8 | 49.0 | 47.9 |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| - | CHF | Total Sight Deposits (MAR 25) | - | 482.5b | Low |
| - | CHF | Domestic Sight Deposits (MAR 25) | - | 418.4b | Low |
| 08:00 | EUR | Eurozone M3 Money Supply (YoY) (FEB) | 5.0% | 5.0% | Medium |
| 09:15 | USD | Fed's Williams Speaks in Singapore | - | - | Medium |
| 10:00 | GBP | BOE's FPC Publishes Statement | - | - | Medium |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1056 | 1.1123 | 1.1159 | 1.1190 | 1.1226 | 1.1257 | 1.1324 |
| GBP/USD | 1.3895 | 1.4057 | 1.4156 | 1.4219 | 1.4318 | 1.4381 | 1.4543 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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