Talking Points:
- Yen sinks as OPEC output cut deal boosts market-wide risk appetite
- Euro unlikely to find meaningful support in German inflation uptick
- US Dollar may rise as Fed-speak, GDP revision boost rate hike bets
The Japanese Yen plunged as stocks soared in Asian trade, undermining demand for the anti-risk currency. Energy shares led the way higher after OPEC agreed on the outlines of a deal to cap output in a range of 32.5-33 million barrels per day. Implementation details – including the assignment of output targets for individual cartel members – remain undecided and will be addressed at the group’s meeting in November.
The preliminary set of September’s German CPI figures is expected to show that the headline year-on-year inflation accelerated to 0.6 percent, the highest in 16 months. The ECB’s firmly dovish posture suggests an upside result may pass with little fanfare however. On the other hand, a disappointing print that beckons stimulus expansion may apply downward pressure on the Euro.
Fed-speak returns to the spotlight later in the day as another, with remarks from three branch Presidents (George, Harker and Lockhart) as well as Governor Powell in focus. Rhetoric echoing Chair Yellen’s near-promise of a December rate hike – a position she reiterated yesterday – is likely to boost the US Dollar. An expected revision of the second-quarter GDP growth rate from 1.1 to 1.3 percent may amplify this dynamic.
Losing money trading in the FX market? This might be why.
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 23:50 | JPY | Retail Trade (YoY) (AUG) | -2.1% | -1.7% | -0.2% |
| 23:50 | JPY | Retail Sales (MoM) (AUG) | -1.1% | -0.6% | 1.5% |
| 23:50 | JPY | Dept. Store, Supermarket Sales (AUG) | -3.6% | -2.6% | 0.6% |
| 00:00 | USD | Fed's George Speaks to Minority Bankers | - | - | - |
| 01:30 | AUD | Job vacancies (AUG) | 4.6% | - | -2.1% |
| 06:35 | JPY | Kuroda Speaks at Security Association Conference | - | - | - |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT | |
|---|---|---|---|---|---|---|
| 07:55 | EUR | German Unemployment Change (000's) (SEP) | -5k | -7k | Medium | |
| 07:55 | EUR | German Unemployment Claims Rate SA (SEP) | 6.1% | 6.1% | Medium | |
| 08:30 | GBP | Net Consumer Credit (AUG) | 1.4b | 1.2b | Low | |
| 08:30 | GBP | Net Lending Sec. on Dwellings (AUG) | 2.6b | 2.7b | Low | |
| 08:30 | GBP | Mortgage Approvals (AUG) | 60.2k | 60.9k | Medium | |
| 08:30 | GBP | M4 Money Supply (MoM) (AUG) | - | 1.2% | Low | |
| 08:30 | GBP | M4 Money Supply (YoY) (AUG) | - | 3.9% | Low | |
| 08:30 | GBP | M4 Ex IOFCs 3M Annualised (AUG) | - | 14.7% | Low | |
| 09:00 | EUR | Eurozone Economic Confidence (SEP) | 103.5 | 103.5 | Low | |
| 09:00 | EUR | Eurozone Business Climate Indicator (SEP) | 0.05 | 0.02 | Low | |
| 09:00 | EUR | Eurozone Industrial Confidence (SEP) | -4.2 | -4.4 | Low | |
| 09:00 | EUR | Eurozone Services Confidence (SEP) | 10.0 | 10.0 | Low | |
| 09:00 | EUR | Eurozone Consumer Confidence (SEP F) | -8.2 | -8.2 | Medium | |
| 09:00 | EUR | ECB's Praet Speaks in Halle, Germany | - | - | Low | |
| 12:00 | EUR | German CPI (MoM) (SEP P) | 0.0% | 0.0% | High | |
| 12:00 | EUR | German CPI (YoY) (SEP P) | 0.6% | 0.4% | High |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.1102 | 1.1157 | 1.1187 | 1.1212 | 1.1242 | 1.1267 | 1.1322 |
| GBP/USD | 1.2906 | 1.2958 | 1.2989 | 1.3010 | 1.3041 | 1.3062 | 1.3114 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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