Euro Looks to 3Q GDP Data to Revive Recovery
- Euro recovery may resume on 3Q GDP data after overnight retracement
- US Dollar follow-through may be limited on upbeat PCE inflation figure
- Japanese Yen pressured as stocks rise in Asia, curbing anti-risk demand
The Euro underperformed in overnight trade in a move that appeared corrective following Friday’s outsized advance. The Japanese Yen traded lower as stocks firmed in Asian trade, undermining demand for the perennial anti-risk currency.
Eurozone CPI and GDP figures headline the economic calendar in European trading hours. News-flow out of the regional bloc has increasingly outperformed relative to consensus forecasts in recent weeks. This suggests analysts’ models are underestimating the economy’s vigor and opens the door for upbeat surprises.
A pickup on the inflation front may pass with little fanfare considering its limited implications for near-term ECB monetary policy. A better-than-expected growth reading may speak to resilience in spite of the would-be cooling effects of uncertainty linked to the Brexit referendum, which may boost demand for EUR-denominated assets and echo positively for the single currency.
The spotlight then moves to September’s US PCE data. The Fed’s favored inflation gauge is seen putting core growth at 1.7 percent year-on-year, matching a two-year high. An upbeat print may boost rate hike bets and the US Dollar, though follow-through could be limited ahead of this week’s FOMC announcement.
Where are the major currencies heading in the fourth quarter? See our forecast and find out!
|21:45||NZD||Building Permits (MoM) (SEP)||0.2%||-||-1.5%|
|23:50||JPY||Industrial Production (MoM) (SEP P)||0.0%||0.9%||1.3%|
|23:50||JPY||Industrial Production (YoY) (SEP P)||0.9%||1.9%||4.5%|
|23:50||JPY||Retail Trade (YoY) (SEP)||-1.9%||-1.8%||-2.2%|
|23:50||JPY||Retail Sales (MoM) (SEP)||0.0%||0.2%||-1.2%|
|23:50||JPY||Dept. Store, Supermarket Sales (SEP)||-3.2%||-2.7%||-3.6%|
|0:00||AUD||Melbourne Institute Inflation (MoM) (OCT)||0.2%||-||0.4%|
|0:00||AUD||Melbourne Institute Inflation (YoY) (OCT)||1.5%||-||1.3%|
|0:00||NZD||ANZ Activity Outlook (OCT)||38.4||-||42.4|
|0:00||NZD||ANZ Business Confidence (OCT)||24.5||-||27.9|
|0:01||GBP||Lloyds Business Barometer (OCT)||37||-||24|
|0:30||AUD||Private Sector Credit (MoM) (SEP)||0.4%||0.4%||0.4%|
|0:30||AUD||Private Sector Credit (YoY) (SEP)||5.4%||5.5%||5.8%|
|2:00||NZD||Money Supply M3 (YoY) (SEP)||4.8%||-||5.3%|
|4:00||JPY||Vehicle Production (YoY) (SEP)||1.4%||-||8.8%|
|5:00||JPY||Housing Starts (YoY) (SEP)||10.0%||5.20%||2.5%|
|5:00||JPY||Annualized Housing Starts (SEP)||0.984m||0.949m||0.956m|
|5:00||JPY||Construction Orders (YoY) (SEP)||16.3%||-||13.8%|
|7:00||EUR||German Retail Sales (MoM) (SEP)||-1.4% (A)||-0.3%||Medium|
|7:00||EUR||German Retail Sales (YoY) (SEP)||0.4% (A)||3.8%||Medium|
|9:00||CHF||Total Sight Deposits||518.5b (A)||518.5b||Low|
|9:00||CHF||Domestic Sight Deposits||451.9b (A)||451.3b||Low|
|9:30||GBP||Net Consumer Credit (SEP)||1.4b (A)||1.6b||Low|
|9:30||GBP||Net Lending Sec. on Dwellings (SEP)||3.2b (A)||3.1b||Low|
|9:30||GBP||Mortgage Approvals (SEP)||62.9k (A)||61.0k||Medium|
|9:30||GBP||M4 Money Supply (MoM) (SEP)||-0.4%||1.0%||Low|
|9:30||GBP||M4 Money Supply (YoY) (SEP)||6.2%||5.4%||Low|
|9:30||GBP||M4 Ex IOFCs 3M Annualised (SEP)||10.0%||11.2%||Low|
|10:00||EUR||Eurozone CPI Estimate (YoY) (OCT)||0.5%||0.4%||High|
|10:00||EUR||Eurozone CPI Core (YoY) (OCT A)||0.8%||0.8%||High|
|10:00||EUR||Eurozone GDP SA (QoQ) (3Q A)||0.3%||0.3%||High|
|10:00||EUR||Eurozone GDP SA (YoY) (3Q A)||1.6%||1.6%||High|
|CCY||Supp 3||Supp 2||Supp 1||Pivot Point||Res 1||Res 2||Res 3|
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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