Talking Points:
- British Pound may ignore UK CPI gain on limited BOE impact
- Euro may fall if German ZEW survey falls short of expectations
- Aussie, NZ Dollars fall as S&P 500 futures hint at risk aversion
UK CPI data headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to rise to 0.7 percent, the highest in almost two years. The Bank of England has unambiguously stated that it expects and intends to look through a sharp rise in price growth after the post-Brexit vote slide in the British Pound.
With that in mind, the pickup due to be reported today ought to mean relatively little for the near-term trajectory of monetary policy. By extension, significant follow-through from Sterling following the release seems unlikely.
Elsewhere on the docket, German ZEW survey of analyst sentiment will cross the wires. Confidence is expected to improve for a second consecutive month having plunged in the wake of the UK EU membership referendum. German economic news-flow has increasingly deteriorated relative to consensus forecasts over the past month however, opening the door for a downside surprise that may weigh on the Euro.
The Australian and New Zealand Dollars underperformed in overnight trade, tracking lower alongside S&P 500 futures. Asian bourses played catch-up to yesterday’s rebound on Wall Street in the wake of dovish comments from Fed Governor Brainard. Contracts tracking the US benchmark index appeared to be looking ahead however, with a degree of risk aversion seeming to resurface and pulling the sentiment-linked commodity currencies lower in the process.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:30 | AUD | RBA's Kent Speech at Bloomberg Sydney | - | - | - |
| 22:45 | NZD | Food Prices (MoM) (AUG) | 1.3% | - | -0.2% |
| 23:30 | AUD | Weekly Consumer Confidence Index (SEP 11) | 118.1 | - | 114.3 |
| 23:50 | JPY | BSI Large All Industry (QoQ) (3Q) | 1.9 | - | -7.9 |
| 23:50 | JPY | BSI Large Manufacturing (QoQ) (3Q) | 2.9 | - | -11.1 |
| 01:30 | AUD | NAB Business Conditions (AUG) | 7 | - | 9 |
| 01:30 | AUD | NAB Business Confidence (AUG) | 6 | - | 4 |
| 02:00 | CNY | Industrial Production (YoY) (AUG) | 6.3% | 6.2% | 6.0% |
| 02:00 | CNY | Industrial Production YTD (YoY) (AUG) | 6.0% | 6.0% | 6.0% |
| 02:00 | CNY | Retail Sales (YoY) (AUG) | 10.6% | 10.2% | 10.2% |
| 02:00 | CNY | Retail Sales YTD (YoY) (AUG) | 10.3% | 10.3% | 10.3% |
| 02:00 | CNY | Fixed Assets Ex Rural YTD (YoY) (AUG) | 8.1% | 7.9% | 8.1% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 06:00 | EUR | German CPI (MoM) (AUG F) | 0.0% | 0.0% | Medium |
| 06:00 | EUR | German CPI (YoY) (AUG F) | 0.4% | 0.4% | Medium |
| 06:00 | EUR | German WPI (MoM) (AUG) | - | 0.2% | Low |
| 06:00 | EUR | German WPI (YoY) (AUG) | - | -1.4% | Low |
| 07:15 | CHF | Producer & Import Prices (MoM) (AUG) | -0.2% | -0.1% | Medium |
| 07:15 | CHF | Producer & Import Prices (YoY) (AUG) | -0.3% | -0.8% | Medium |
| 08:30 | GBP | CPI (MoM) (AUG) | 0.4% | -0.1% | High |
| 08:30 | GBP | CPI (YoY) (AUG) | 0.7% | 0.6% | High |
| 08:30 | GBP | CPI Core (YoY) (AUG) | 1.4% | 1.3% | High |
| 08:30 | GBP | RPI (MoM) (AUG) | 0.4% | 0.1% | Medium |
| 08:30 | GBP | RPI (YoY) (AUG) | 1.8% | 1.9% | Medium |
| 08:30 | GBP | RPI Ex Mort Int. Payments (YoY) (AUG) | 1.9% | 1.9% | Low |
| 08:30 | GBP | PPI Input NSA (MoM) (AUG) | 0.6% | 3.3% | Low |
| 08:30 | GBP | PPI Input NSA (YoY) (AUG) | 8.2% | 4.3% | Low |
| 08:30 | GBP | PPI Output NSA (MoM) (AUG) | 0.3% | 0.3% | Medium |
| 08:30 | GBP | PPI Output NSA (YoY) (AUG) | 1.0% | 0.3% | Medium |
| 08:30 | GBP | PPI Output Core NSA (MoM) (AUG) | 0.2% | 0.4% | Low |
| 08:30 | GBP | PPI Output Core NSA (YoY) (AUG) | 1.3% | 1.0% | Low |
| 08:30 | GBP | House Price Index (YoY) (JUL) | - | 8.7% | Low |
| 09:00 | EUR | Eurozone Employment (QoQ) (2Q) | - | 0.3% | Low |
| 09:00 | EUR | Eurozone Employment (YoY) (2Q) | - | 1.4% | Low |
| 09:00 | EUR | German ZEW Survey Current Situation (SEP) | 56.0 | 57.6 | Medium |
| 09:00 | EUR | German ZEW Survey Expectations (SEP) | 2.5 | 0.5 | Medium |
| 09:00 | EUR | Eurozone ZEW Survey Expectations (SEP) | - | 4.6 | Medium |
| 09:40 | GBP | BOE ILTR Operation Results | - | - | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1124 | 1.1181 | 1.1208 | 1.1238 | 1.1265 | 1.1295 | 1.1352 |
| GBP/USD | 1.3085 | 1.3196 | 1.3266 | 1.3307 | 1.3377 | 1.3418 | 1.3529 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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