British Pound May Ignore UK CPI Data as Brexit Fears Swell

2016-06-14 05:35:00 Ilya Spivak

Talking Points:

Brexit-leaning polls keep British Pound under pressure in Asian trade
New Zealand Dollar down as RBNZ rate cut probability swells to 60%
Follow-through on UK CPI, US Retail Sales figures may prove limited

The British Pound slumped overnight after another batch of polls – this time from YouGov and ICM – showed growing support for taking the UK out of the EU at a referendum on June 23. The Japanese Yen traded higher as stocks declined on most Asian bourses, offering support for the anti-risk currency.

The New Zealand Dollar came under pressure against a backdrop of rising RBNZ rate cut speculation. The currency fell alongside front-end bond yields as the priced-in probability of a 25bps reduction in the baseline cash rate jumped to 60 percent from just 24 percent two sessions ago.

May’s UK CPI report headlines the economic calendar in European hours, with the core year-on-year inflation rate expected to rise to 1.3 percent. An upbeat result seems unlikely to inspire a lasting response from financial markets however as Brexit fears continue to dominate the spotlight.

Later in the day, the focus will shift to US Retail Sales data. Receipts are expected to have added 0.3 percent in May, marking a slowdown from the 1.3 percent gain in the prior month. A bleak result may bolster speculation on a dovish posture at this week’s FOMC meeting and weigh on the US Dollar.

However, May’s dismal US jobs data has already triggered a sharp dovish shift in Fed policy bets. This may make for limited follow-through on a soft retail sales print as investors wait for Janet Yellen and company to confirm their suspicions later in the week.

Are traders buying or selling the Pound ahead of the Brexit vote? Find out here !

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
22:45	NZD	Food Prices (MoM) (MAY)	-0.5%	-	0.3%
01:30	AUD	NAB Business Conditions (MAY)	10	-	10
01:30	AUD	NAB Business Confidence (MAY)	3	-	5
01:30	AUD	Credit Card Purchases (APR)	A$23.5b	-	A$25.5b
01:30	AUD	Credit Card Balances (APR)	A$51.8b	-	A$51.8b
04:30	JPY	Industrial Production (MoM) (APR F)	0.5%	-	0.3%
04:30	JPY	Industrial Production (YoY) (APR F)	-3.3%	-	-3.5%
04:30	JPY	Capacity Utilization (MoM) (APR)	-1.0%	-	3.2%

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
07:15	CHF	Producer & Import Prices (MoM) (MAY)	0.1%	0.3%	Low
07:15	CHF	Producer & Import Prices (YoY) (MAY)	-1.5%	-2.4%	Low
08:30	GBP	CPI (MoM) (MAY)	0.3%	0.1%	High
08:30	GBP	CPI (YoY) (MAY)	0.4%	0.3%	High
08:30	GBP	CPI Core (YoY) (MAY)	1.3%	1.2%	High
08:30	GBP	RPI (MoM) (MAY)	0.3%	0.1%	Medium
08:30	GBP	RPI (YoY) (MAY)	1.5%	1.3%	Medium
08:30	GBP	RPI Ex Mort Int. Payments (YoY) (MAY)	1.5%	1.4%	Low
08:30	GBP	PPI Input NSA (MoM) (MAY)	0.9%	0.9%	Low
08:30	GBP	PPI Input NSA (YoY) (MAY)	-5.1%	-6.5%	Low
08:30	GBP	PPI Output NSA (MoM) (MAY)	0.3%	0.4%	Medium
08:30	GBP	PPI Output NSA (YoY) (MAY)	-0.5%	-0.7%	Medium
08:30	GBP	PPI Output Core NSA (MoM) (MAY)	0.1%	0.2%	Low
08:30	GBP	PPI Output Core NSA (YoY) (MAY)	0.6%	0.5%	Low
09:00	EUR	Eurozone Industrial Production (MoM) (APR)	0.8%	-0.8%	Medium
09:00	EUR	Eurozone Industrial Production (YoY) (APR)	1.4%	0.2%	Medium
09:00	EUR	Eurozone Employment (QoQ) (1Q)	-	0.3%	Low
09:00	EUR	Eurozone Employment (YoY) (1Q)	-	1.2%	Low