Talking Points:
- Yen gains, commodity bloc currencies fall amid risk aversion in FX space
- Aussie Dollar underperforms as soft Retail Sales data hurts RBA outlook
- British Pound may rebound on Construction PMI data after Friday selloff
The sentiment-sensitive commodity bloc currencies weakened and the safety-linked Japanese Yen traded higher as risk appetite soured in overnight trade. Interestingly, the moves appeared to be ignored by the equities space, with Asian bourses relatively little-changed by around midday in Tokyo and Sydney. Crude oil fell alongside S&P 500 futures as well as gold prices however, hinting the overall landscape may reflect pre-positioning for this week’s release of minutes from the March FOMC meeting.
The Australian Dollar underperformed following a disappointing Retail Sales report. Receipts registered flat in February, falling short of expectations calling for a 0.4 percent increase. The year-on-year growth rate dropped to 3.3 percent, the lowest since September 2013. The currency tracked downward parallel to a drop in Australian front-end bond yields, suggesting the report inspired RBA rate cut bets. Easing is not expected at this week’s policy meeting however.
Looking ahead, a relatively quiet economic calendar is headlined by UK Construction PMI figures. Broadly speaking, UK economic news-flow has improved relative to consensus forecasts over the past two months, opening the door for an upside surprise. Such a result may help encourage a recovery from the British Pound after the currency broadly slumped on Friday. That move may have reflected flows linked to portfolio adjustment for “Brexit” referendum risk at the start of the new fiscal year and the new quarter.
What do DailyFX analysts expect from markets in the second quarter? Find out here !
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 23:50 | JPY | Monetary Base (YoY) (MAR) | 28.5% | - | 29.0% |
| 23:50 | JPY | Monetary Base End of period (ÂĄ) (MAR) | 375.7t | - | 358.8t |
| 01:00 | AUD | Melbourne Institute Inflation (MoM) (MAR) | 0.0% | - | -0.2% |
| 01:00 | AUD | Melbourne Institute Inflation (YoY) (MAR) | 1.7% | - | 2.1% |
| 01:30 | AUD | Retail Sales (MoM) (FEB) | 0.0% | 0.4% | 0.3% |
| 01:30 | AUD | ANZ Job Advertisements (MoM) (MAR) | 0.2% | - | -1.2% |
| 01:30 | AUD | Building Approvals (MoM) (FEB) | 3.1% | 2.5% | -6.6% |
| 01:30 | AUD | Building Approvals (YoY) (FEB) | -9.0% | -9.1% | -14.5% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 07:00 | CHF | Total Sight Deposits (APR 1) | - | 483.3b | Low |
| 07:00 | CHF | Domestic Sight Deposits (APR 1) | - | 419.6b | Low |
| 08:30 | GBP | Markit/CIPS UK Construction PMI (MAR) | 54.1 | 54.2 | Medium |
| 08:30 | EUR | Sentix Investor Confidence (APR) | 7.0 | 5.5 | Low |
| 08:30 | EUR | ECB's Praet Speaks at in Rome | - | - | Low |
| 09:00 | EUR | Eurozone PPI (MoM) (FEB) | -0.5% | -1.0% | Low |
| 09:00 | EUR | Eurozone PPI (YoY) (FEB) | -4.0% | -2.9% | Low |
| 09:00 | EUR | Eurozone Unemployment Rate (FEB) | 10.3% | 10.3% | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1182 | 1.1285 | 1.1338 | 1.1388 | 1.1441 | 1.1491 | 1.1594 |
| GBP/USD | 1.3855 | 1.4056 | 1.4141 | 1.4257 | 1.4342 | 1.4458 | 1.4659 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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