Commodity Dollars at Risk on Dour Mood Before 1Q Earnings Season

2016-04-08 07:05:00

Ilya Spivak, Head Strategist, APAC

Talking Points:

Commodity bloc FX recovers, Yen falls as risk appetite firms in Asian trade
Quiet economic data docket puts sentiment trends in focus into the week-end
Worries about soft 1Q earnings season may unleash renewed risk aversion

The sentiment-linked Australian, Canadian and New Zealand Dollars rose traded higher alongside S&P 500 futures while the anti-risk Japanese Yen declined in overnight trade. The moves looked corrective following the onset of risk aversion in the prior session that pushed the US equities benchmark to a weekly low while commodity-bloc FX swooned and the Yen winning streak extended for a fifth consecutive day.

A relatively quiet economic calendar through the remainder of the trading week seems likely to make for a sentiment-centric mood into the week-end. That may augur a repeat of yesterday’s performance on Wall Street, where the latest bout of selling pressure probably reflected pre-positioning ahead of the first-quarter corporate earnings reporting season starting next week.

Collectively speaking, earnings per share for the companies making up the S&P 500 are expected to have fallen 7.9 percent year-on-year in the first three months of 2016. Fears of such dour results may inspire continued unwinding of risk-on exposure, leading shares downward and pulling higher-yielding currencies in the same direction.

How will the second quarter differ from the first for FX markets? See our forecast here!

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
23:50	JPY	BoP Current Account Balance (¥) (FEB)	2434.9b	2032.3b	520.8b
23:50	JPY	BoP Current Account Adjusted (¥) (FEB)	1733.5b	1571.9b	1492.4b
23:50	JPY	Trade Balance BoP Basis (FEB)	425.2b	429.7b	-411.0b
00:15	USD	Fed's George Speaks on US Economy	-	-	-
04:30	JPY	Bankruptcies (YoY) (MAR)	-13.15%	-	4.47%
06:00	JPY	Eco Watchers Survey Current (MAR)	45.4	45.5	44.6
06:00	JPY	Eco Watchers Survey Outlook (MAR)	46.7	48.3	48.2

European Session

GMT	CCY	EVENT	EXP/ACT	PREV	IMPACT
05:45	CHF	Unemployment Rate (MAR)	3.6% (A)	3.7%	Low
05:45	CHF	Unemployment Rate SA (MAR)	3.5% (A)	3.4%	Low
06:00	EUR	German Trade Balance (FEB)	20.3b (A)	13.4b	Low
06:00	EUR	German Current Account Balance (FEB)	20.0b (A)	14.3b	Low
06:00	EUR	German Exports SA (MoM) (FEB)	1.3% (A)	-0.6%	Low
06:00	EUR	German Imports SA (MoM) (FEB)	0.4% (A)	1.3%	Low
07:15	CHF	CPI (MoM) (MAR)	0.3%	0.2%	Medium
07:15	CHF	CPI (YoY) (MAR)	-0.9%	-0.8%	Medium
07:15	CHF	CPI - EU Harmonized (MoM) (MAR)	0.3%	0.2%	Low
07:15	CHF	CPI - EU Harmonized (YoY) (MAR)	-1.1%	-0.9%	Low
08:30	GBP	Industrial Production (MoM) (FEB)	0.1%	0.3%	Medium
08:30	GBP	Industrial Production (YoY) (FEB)	0.0%	0.2%	Medium
08:30	GBP	Manufacturing Production (MoM) (FEB)	-0.2%	0.7%	Low
08:30	GBP	Manufacturing Production (YoY) (FEB)	-0.7%	-0.1%	Low
08:30	GBP	Visible Trade Balance £/Mn (FEB)	-£10200	-£10289	Medium
08:30	GBP	Trade Balance Non EU £/Mn (FEB)	-£2500	-£2199	Low