US Dollar Looks to Fed’s Fischer for Fuel to Resume Advance

2016-08-30 05:14:00

Talking Points:

US Dollar resumes advance as Treasury yields rebound after pullback
Comments from Fed’s Fischer to guide on-coming rate hike speculation
Euro unlikely to find lasting directional cues in flash German CPI data

The US Dollar edged higher in otherwise quiet overnight trade as front-end bond yields rebounded following yesterday’s pullback. In turn, that move appeared corrective in the wake of the strong up-shift in Fed rate hike bets after Fed Chair Janet Yellen delivered a hawkish-sounding speech at the Jackson Hole Symposium on Friday. The central bank head said “the case for an increase in the federal funds rate has strengthened in recent months”.

Fed commentaryremains in focus in the hours ahead as Vice Chair Stanley Fischer speaks with Bloomberg TV. Fischer’s interview with CNBC after Yellen’s speech seemed to shape the markets’ hawkish interpretation of her remarks. Asked whether markets ought to take seriously the probability of a hike in September and more than one rate increase in 2016, Fischer said Yellen’s comments meant the answer on both counts is “yes”.

The greenback is likely to resume Friday’s advance if Fischer opts do double down on hawkish rhetoric. Alternatively, an attempt to soften his previous comments having had the benefit of seeing the markets’ response may weigh on the US unit. Either way however, follow-through may be limited as traders wait for the upcoming release of Augusts’ jobs data to see if policymakers’ saber-rattling finds support in concrete evidence.

The preliminary set of Augusts’ German CPI figures headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to rise to 0.5 percent. The Euro is unlikely to pay much heed to the outcome considering its limited implications for near-term ECB monetary policy trends. The central bank’s firmly dovish posture suggests an uptick is all but moot for now. Prices may be a bit more response to a downside surprise that bolsters recent commentary hinting at stimulus expansion.

What do retail traders’ buy and sell decisions hint about on-coming price trends? Find out here !

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
22:45	NZD	Building Permits (MoM) (JUL)	-10.5%	-	21.9%
23:30	AUD	Weekly Consumer Confidence Index (AUG 28)	118.4	-	121.8
23:30	JPY	Jobless Rate (JUL)	3.0%	3.1%	3.1%
23:30	JPY	Job-To-Applicant Ratio (JUL)	1.37	1.38	1.37
23:30	JPY	Overall Household Spending (YoY) (JUL)	-0.5%	-1.5%	-2.3%
23:50	JPY	Retail Trade (YoY) (JUL)	-0.2%	-0.9%	-1.3%
23:50	JPY	Retail Sales (MoM) (JUL)	1.4%	0.8%	0.3%
23:50	JPY	Dept. Store, Supermarket Sales (JUL)	0.6%	0.9%	-1.5%
01:30	AUD	Building Approvals (MoM) (JUL)	11.3%	1.1%	-2.9%
01:30	AUD	Building Approvals (YoY) (JUL)	3.1%	-8.3%	-5.9%

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
06:00	EUR	German Import Price Index (MoM) (JUL)	-0.1%	0.5%	Low
06:00	EUR	German Import Price Index (YoY) (JUL)	-4.0%	-4.6%	Low
07:00	CHF	KOF Leading Indicator (AUG)	102.0	102.7	Medium
08:30	GBP	Net Consumer Credit (JUL)	1.7b	1.8b	Medium
08:30	GBP	Net Lending Sec. on Dwellings (JUL)	3.1b	3.3b	Low
08:30	GBP	Mortgage Approvals (JUL)	61.9k	64.8k	Medium
08:30	GBP	Money Supply M4 (MoM) (JUL)	-	1.1%	Low
08:30	GBP	M4 Money Supply (YoY) (JUL)	-	3.5%	Low
08:30	GBP	M4 Ex IOFCs 3M Annualised (JUL)	7.1%	8.0%	Low
09:00	EUR	Eurozone Economic Confidence (AUG)	104.1	104.6	Low
09:00	EUR	Eurozone Business Climate Indicator (AUG)	0.36	0.39	Low
09:00	EUR	Eurozone Industrial Confidence (AUG)	-2.7	-2.4	Low
09:00	EUR	Eurozone Services Confidence (AUG)	11.1	11.1	Low
09:00	EUR	Eurozone Consumer Confidence (AUG F)	-8.5	-8.5	Medium
09:40	GBP	BOE ILTR Operation Results	-	-	Medium
10:30	USD	Fed's Fischer Speaks on Bloomberg Television	-	-	High
12:00	EUR	German CPI (MoM) (AUG P)	0.1%	0.3%	High
12:00	EUR	German CPI (YoY) (AUG P)	0.5%	0.4%	High