Talking Points:
- Aussie Dollar underperforms amid risk aversion in overnight trade
- Euro, US Dollar unlikely to find direction in CPI and UofM reports
- Sentiment trends to remain in focus, futures hint at risk-off mood
The Australian Dollar underperformed in otherwise quiet overnight trade, with the sentiment-sensitive currency falling alongside share prices. The MSCI Asia Pacific equity index fell for a second consecutive day in a move that may reflect pre-positioning ahead of next week’s event risk.
The regional benchmark hit a two-month high mid-week. The absence of high-profile items on the docket may have inspired a round of precautionary profit-taking as investors rebalance exposure toward a more risk-neutral setting ahead of next week’s news flow, headlined by the FOMC policy announcement.
Looking ahead, the final revision of May’s German CPI figures seems unlikely to generate a significant response from the Euro considering the outcome’s limited implications for near-term ECB policy trends. A downtick on June’s University of Michigan gauge of US consumer confidence may likewise pass with little fanfare, with traders probably unwilling to commit to a directional bias on the US Dollar for now.
This leaves sentiment trends at the forefront. European and US stock index futures are pointing cautiously lower, hinting the risk-off bias may carry through in the final hours of the trading week. “Brexit”-related headline risk remains a wildcard as the fateful referendum looms ever-closer.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:45 | NZD | Card Spending Retail (MoM) (MAY) | -0.3% | 0.5% | 0.8% |
| 22:45 | NZD | Card Spending Total (MoM) (MAY) | -0.6% | - | 1.3% |
| 23:50 | JPY | PPI (MoM) (MAY) | 0.2% | 0.1% | -0.4% |
| 23:50 | JPY | PPI (YoY) (MAY) | -4.2% | -4.2% | -4.2% |
| 04:30 | JPY | Tertiary Industry Index (MoM) (APR) | 0.6% | -0.7% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 06:00 | EUR | German Wholesale Price Index (MoM) (MAY) | - | 0.3% | Low |
| 06:00 | EUR | German Wholesale Price Index (YoY) (MAY) | - | -2.7% | Low |
| 06:00 | EUR | German CPI (MoM) (MAY F) | 0.3% | 0.3% | Medium |
| 06:00 | EUR | German CPI (YoY) (MAY F) | 0.1% | 0.1% | Medium |
| 07:00 | EUR | ECB's Weidmann Speaks in Eltville am Rhine | - | - | Low |
| 08:30 | GBP | Construction Output SA (MoM) (APR) | 1.4% | -3.6% | Low |
| 08:30 | GBP | Construction Output SA (YoY) (APR) | -4.8% | -4.5% | Low |
| 08:30 | GBP | BoE/TNS Inflation Next 12 Mths (MAY) | - | 1.8% | Low |
| 12:15 | EUR | ECB's Constancio, Lane Speak | - | - | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1126 | 1.1236 | 1.1276 | 1.1346 | 1.1386 | 1.1456 | 1.1566 |
| GBP/USD | 1.4317 | 1.4397 | 1.4428 | 1.4477 | 1.4508 | 1.4557 | 1.4637 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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