Talking Points:
- US Dollar likely to join Yen on the upside as Deutsche Bank sours sentiment
- Aussie Dollar sinks as Asian, European shares follow Wall Street downward
- US PCE, Eurozone CPI may pass unnoticed as risk aversion grips markets
The sentiment-linked Australian Dollar underperformed overnight while the anti-risk Japanese Yen traded higher as risk aversion triggered in late Wall Street trade carried over onto Asian bourses. The rout was triggered after Bloomberg reported that about 10 hedge funds cut back their exposure to beleaguered German lender Deutsche Bank.
Insolvency fears have plagued the firm recently after US regulators demanded it set aside $14 billion for penalties related to the conduct of its MBS business in the lead up to the 2008-9 financial crisis. German Chancellor Angela Merkel reportedly ruled out state assistance, according to a report from Focus magazine earlier in the week.
European shares are have taken up the risk-off lead in early trade and US stock futures are pointing sharply lower, hinting that sentiment may continue to sour into the week-end. The US Dollar may emerge as another beneficiary alongside the Yen as haven demand sends capital flooding into the benchmark currency. Gold has also emerged as a beneficiary.
US PCE inflation figures – the Fed’s favored price growth benchmark – headline the economic calendar. The core year-on-year rate is expected to tick up to 1.7 percent, the highest in at least six months. While an upbeat result might have stirred rate hike speculation, this seems unlikely as risk appetite sours across financial markets. An slightly higher flash Eurozone CPI reading may also pass with little fanfare.
Losing money trading in the FX market? This might be why.
Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
---|---|---|---|---|---|
21:45 | NZD | Building Permits (MoM) (AUG) | -1.0% | - | -8.1% |
23:01 | GBP | GfK Consumer Confidence (SEP) | -1 | -5 | -7 |
23:01 | GBP | Lloyds Business Barometer (SEP) | 24 | - | 16 |
23:30 | JPY | Jobless Rate (AUG) | 3.1% | 3.0% | 3.0% |
23:30 | JPY | Job-To-Applicant Ratio (AUG) | 1.37 | 1.37 | 1.37 |
23:30 | JPY | Overall Household Spending (YoY) (AUG) | -4.6% | -2.1% | -0.5% |
23:30 | JPY | Natl CPI (YoY) (AUG) | -0.5% | -0.5% | -0.4% |
23:30 | JPY | Natl CPI Ex Fresh Food (YoY) (AUG) | -0.5% | -0.4% | -0.5% |
23:30 | JPY | Natl CPI Ex Food, Energy (YoY) (AUG) | 0.2% | 0.2% | 0.3% |
23:30 | JPY | Tokyo CPI (YoY) (SEP) | -0.5% | -0.5% | -0.5% |
23:30 | JPY | Tokyo CPI Ex-Fresh Food (YoY) (SEP) | -0.5% | -0.4% | -0.4% |
23:30 | JPY | Tokyo CPI Ex Food, Energy (YoY) (SEP) | -0.1% | 0.1% | 0.1% |
23:50 | JPY | BOJ Summary of Opinions at Sept.20-21 Meeting | - | - | - |
23:50 | JPY | Industrial Production (MoM) (AUG P) | 1.5% | 0.5% | -0.4% |
23:50 | JPY | Industrial Production (YoY) (AUG P) | 4.6% | 3.4% | -4.2% |
00:00 | NZD | ANZ Activity Outlook (SEP) | 42.4 | - | 33.7 |
00:00 | NZD | ANZ Business Confidence (SEP) | 27.9 | - | 15.5 |
01:00 | AUD | HIA New Home Sales (MoM) (AUG) | 6.1% | - | -9.7% |
01:30 | AUD | Private Sector Credit (MoM) (AUG) | 0.4% | 0.5% | 0.4% |
01:30 | AUD | Private Sector Credit (YoY) (AUG) | 5.8% | 5.9% | 6.0% |
01:45 | CNY | Caixin China PMI Mfg (SEP) | 50.1 | 50.1 | 50.0 |
02:00 | NZD | M3 Money Supply (YoY) (AUG) | 5.3% | - | 6.3% |
04:00 | JPY | Vehicle Production (YoY) (AUG) | 8.8% | - | -4.1% |
05:00 | JPY | Housing Starts (YoY) (AUG) | 2.5% | 7.1% | 8.9% |
05:00 | JPY | Annualized Housing Starts (AUG) | 0.956m | 0.999m | 1.005m |
05:00 | JPY | Construction Orders (YoY) (AUG) | 13.8% | - | -10.9% |
05:00 | JPY | Natl CPI Ex Fresh Food, Energy (YoY) (AUG) | 0.4% | 0.4% | 0.5% |
European Session
GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
---|---|---|---|---|---|
06:00 | EUR | German Retail Sales (MoM) (AUG) | -0.4% (A) | 0.5% | Medium |
06:00 | EUR | German Retail Sales (YoY) (AUG) | 3.7% (A) | -1.5% | Medium |
06:00 | EUR | National House Px (MoM) (SEP) | 0.3%(A) | 0.6% | Medium |
06:00 | EUR | National House Px (YoY) (SEP) | 5.3% (A) | 5.6% | Medium |
07:00 | CHF | KOF Leading Indicator (SEP) | 101.3 (A) | 99.7 | Low |
08:30 | GBP | GDP (QoQ) (2Q F) | 0.6% | 0.6% | Medium |
08:30 | GBP | GDP (YoY) (2Q F) | 2.2% | 2.2% | Medium |
08:30 | GBP | Current Account Balance (2Q) | -30.6b | -32.6b | Low |
08:30 | GBP | Index of Services (MoM) (JUL) | 0.1% | 0.2% | Low |
08:30 | GBP | Index of Services (3M/3M) (JUL) | 0.3% | 0.5% | Low |
08:30 | GBP | Total Business Investment (QoQ) (2Q F) | 0.5% | 0.5% | Low |
08:30 | GBP | Total Business Investment (YoY) (2Q F) | -0.8% | -0.8% | Low |
09:00 | EUR | Eurozone Unemployment Rate (AUG) | 10.0% | 10.1% | Medium |
09:00 | EUR | Eurozone CPI Estimate (YoY) (SEP) | 0.4% | - | High |
09:00 | EUR | Eurozone CPI Core (YoY) (SEP A) | 0.9% | 0.8% | High |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
---|---|---|---|---|---|---|---|
EUR/USD | 1.1117 | 1.1170 | 1.1196 | 1.1223 | 1.1249 | 1.1276 | 1.1329 |
GBP/USD | 1.2786 | 1.2890 | 1.2929 | 1.2994 | 1.3033 | 1.3098 | 1.3202 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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