G7 Comments May Help Aussie, NZ Dollar Rebound as Yen Falls

2016-05-20 06:36:00

Ilya Spivak, Head Strategist, APAC

Talking Points:

Yen falls, commodity-bloc FX gains as risk appetite recovers overnight
New Zealand Dollar outperforms on fading RBNZ rate cut speculation
G7 officials’ comments may help sentiment rebound into the week-end

The Japanese Yen underperformed in overnight trade as stocks advanced, weighing on the anti-risk currency. Not surprisingly, the sentiment-linked Australian and New Zealand Dollars traded higher alongside share prices.

The Kiwi outperformed as the island nation’s front-end bond yields pushed upward, hinting at ebbing RBNZ rate cut speculation. Indeed, a gauge of the priced-in 12-month outlook implied in OIS rates has moved to the least dovish in four months.

The overall risk appetite recovery likely reflects corrective flows after yesterday’s Fed-inspired selloff. Fears of imminent stimulus withdrawal swelled as traders digested unmistakably hawkish rhetoric within minutes from April’s FOMC meeting, pushing the MSCI Asia Pacific regional benchmark equity index to a monthly low.

Stock index futures are trading notably higher ahead of the opening bell in Europe, hinting the risk-on mood is aiming to carry through into the week-end. Sideline comments from a meeting of G7 finance ministers and central bank governors may help if officials hint at on-coming fiscal measures to boost sagging global growth as monetary efforts appear increasingly stretched.

What does retail traders’ buying and selling say about market trends? Find out here!

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
22:45	NZD	Net Migration SA (APR)	5520	-	5330
3:00	NZD	Credit Card Spending (MoM) (APR)	2.5%	-	-1.4%
3:00	NZD	Credit Card Spending (YoY) (APR)	9.1%	-	4.8%
5:00	JPY	Nationwide Dept Sales (YoY) (APR)	-3.8%	-	-2.9%
5:00	JPY	Tokyo Dept Store Sales (YoY) (APR)	-1.5%	-	-1.1%

European Session

GMT	CCY	EVENT	EXP/ACT	PREV	IMPACT
6:00	EUR	German PPI (MoM) (APR)	0.1% (A)	0.0%	Medium
6:00	EUR	German PPI (YoY) (APR)	-3.1% (A)	-3.1%	Medium
7:00	JPY	Convenience Store Sales (YoY) (APR)	-	-0.1%	Low
8:00	EUR	ECB Current Account SA (MAR)	-	19.0b	Low
8:00	EUR	ECB Current Account NSA (MAR)	-	11.1b	Low
10:00	GBP	CBI Trends Total Orders (MAY)	-13	-11	Low
10:00	GBP	CBI Trends Selling Prices (MAY)	-	4	Low