Talking Points:
- Markets to look past European data docket, focus on Fed policy decision
- US Dollar to rise if FOMC statement boosts December rate hike chances
- Yen rises, Aussie falls in risk-off trade as NZ Dollar gains on jobs report
Currency markets are likely to look past a relatively quiet European economic calendar to focus on Federal Reserve rate decision due later in the day. A change in policy looks exceedingly unlikely but traders are keen to dissect the FOMC committee’s statement to see if Chair Yellen and company will demonstrably signal that an interest rate hike is on tap in December.
As it stands, investors price in the probability of a December rate hike at 68 percent. A hawkish policy statement matching the tone of recent Fed rhetoric coupled with steady dissent from pro-hike officials may boost conviction, sending the US Dollar broadly higher.
The anti-risk Japanese Yen outperformed while the sentiment-geared Australian and Canadian Dollars traded lower as risk appetite soured in Asian trade. Regional shares followed a rout on Wall Street, with regional bourses losing more than 1 percent on average. The New Zealand Dollar diverged from its commodity bloc counterparts, finding support in upbeat labor-market data.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 21:45 | NZD | Unemployment Rate (3Q) | 4.9% | 5.1% | 5.0% |
| 21:45 | NZD | Employment Change (QoQ) (3Q) | 1.4% | 0.5% | 2.4% |
| 21:45 | NZD | Employment Change (YoY) (3Q) | 6.1% | 5.4% | 4.5% |
| 21:45 | NZD | Participation Rate (3Q) | 70.1% | 69.7% | 69.7% |
| 21:45 | NZD | Pvt Wages Ex Overtime (QoQ) (3Q) | 0.4% | 0.4% | 0.4% |
| 21:45 | NZD | Pvt Wages Inc Overtime (QoQ) (3Q) | 0.4% | 0.4% | 0.4% |
| 21:45 | NZD | Average Hourly Earnings (QoQ) (3Q) | 0.3% | 1.0% | 0.8% |
| 23:50 | JPY | Monetary Base (YoY) (OCT) | 22.1% | - | 22.7% |
| 23:50 | JPY | Monetary Base End of period (OCT) | ¥417.6t | - | ¥412.8t |
| 0:01 | GBP | BRC Shop Price Index (YoY) (OCT) | -1.7% | - | -1.8% |
| 0:30 | AUD | Building Approvals (MoM) (SEP) | -8.7% | -3.0% | -1.8% |
| 0:30 | AUD | Building Approvals (YoY) (SEP) | -6.4% | 2.1% | 10.3% |
| 2:00 | NZD | 2Yr Inflation Expectation (4Q) | 1.68% | - | 1.65% |
| 5:00 | JPY | Consumer Confidence Index (OCT) | 42.3 | 42.6 | 43.0 |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
|---|---|---|---|---|---|
| 7:00 | GBP | Nationwide House Px (YoY) (OCT) | 4.9% | 5.3% | Medium |
| 7:00 | GBP | Nationwide House Px (MoM) (OCT) | 0.2% | 0.3% | Medium |
| 7:00 | CHF | UBS Real Estate Bubble Index (3Q) | - | 1.32 | Low |
| 8:45 | EUR | Markit/ADACI Italy Mfg PMI (OCT) | 51.4 | 51.0 | Low |
| 8:50 | EUR | Markit France Mfg PMI (OCT F) | 51.3 | 51.3 | Low |
| 8:55 | EUR | Germany Unemployment Change (000's) (OCT) | -1k | 1k | Medium |
| 8:55 | EUR | Germany Unemployment Claims Rate SA (OCT) | 6.1% | 6.1% | Medium |
| 8:55 | EUR | Markit/BME Germany Mfg PMI (OCT F) | 55.1 | 55.1 | Medium |
| 9:00 | EUR | Markit Eurozone Mfg PMI (OCT F) | 53.3 | 53.3 | Medium |
| 9:30 | GBP | Markit/CIPS UK Construction PMI (OCT) | 51.8 | 52.3 | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.0810 | 1.0919 | 1.0987 | 1.1028 | 1.1096 | 1.1137 | 1.1246 |
| GBP/USD | 1.2095 | 1.2169 | 1.2206 | 1.2243 | 1.2280 | 1.2317 | 1.2391 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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