Currency Markets May Stall as Investors Brace for US Jobs Data
- Japanese Yen corrects higher after dropping to monthly low vs. majors
- Australian Dollar drops as RBA rate cut speculation cautiously rebuilds
- Markets may stall before US jobs data but Deutsche Bank risk remains
The Japanese Yen corrected broadly higher overnight in a move that looked corrective after the currency slid against all of its major counterparts for a second consecutive day, hitting the lowest level in a month. The Australian Dollar faced selling pressure, with prices tracking to front-end bond yields downward to suggest that returning RBA rate cut bets may have been behind the selloff. The priced-in probability of a cut at next month’s meeting is now 18 percent.
Looking ahead, a lull in high-profile European and US event risk may translate into a quiet, consolidative period in the near term as brace for the release of September’s US Employment report on Friday. A payrolls gain of 170k is expected, marking slight acceleration from the 151k increase in August. The on-going fiasco centered on German lender Deutsche Bank has proven to be a potent driver of risk appetite and may fuel knee-jerk volatility if an eye-catching headline crosses the wires. Rumors of a reduced settlement payout emerged earlier in the week, with CEO John Cryan reportedly due in the US to finalize negotiations.
Losing money trading in the FX market? This might be why.
|21:00||NZD||ANZ Truckometer Heavy (MoM) (SEP)||-1.4%||-||6.8%|
|00:30||AUD||Trade Balance (AUG)||-2010m||-2300m||-2410m|
|06:00||EUR||Factory Orders (MoM) (AUG)||0.3%||0.2%||Medium|
|06:00||EUR||Factory Orders (YoY) (AUG)||1.6%||-0.7%||Medium|
|07:15||CHF||CPI (MoM) (SEP)||0.2%||-0.1%||Medium|
|07:15||CHF||CPI (YoY) (SEP)||0.0%||-0.1%||Medium|
|07:15||CHF||CPI - EU Harmonized (MoM) (SEP)||0.3%||0.0%||Low|
|07:15||CHF||CPI - EU Harmonized (YoY) (SEP)||0.0%||0.0%||Low|
|07:30||EUR||Markit Germany Construction PMI (SEP)||-||51.6||Low|
|08:10||EUR||Markit Germany Retail PMI (SEP)||-||54.1||Low|
|08:10||EUR||Markit Eurozone Retail PMI (SEP)||-||51.0||Medium|
|08:10||EUR||Markit France Retail PMI (SEP)||-||53.0||Low|
|08:10||EUR||Markit Italy Retail PMI (SEP)||-||43.2||Low|
|08:30||GBP||Unit Labor Costs (YoY) (2Q)||-||1.9%||Low|
|CCY||Supp 3||Supp 2||Supp 1||Pivot Point||Res 1||Res 2||Res 3|
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
To receive Ilya's analysis directly via email, please SIGN UP HERE
Contact and follow Ilya on Twitter: @IlyaSpivak
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.