Talking Points:
- British Pound may rise if UK CPI meaningfully surpasses expectations
- German and Eurozone GDP revisions may not mean much for the Euro
- US Dollar looks to Retail Sales data, Fed-speak to feed rate hike bets
UK CPI data headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to rise to 1.1 percent, the highest in two years. The Bank of England has clearly indicated its intention to look through a temporary price growth uptick driven by British Pound weakness following the Brexit referendum. However, the BOE has also said it will not stand idly by if the increase markedly tops expectations or proves sticky. On balance, this suggests a print broadly in line with consensus forecasts ought to pass with relatively little fanfare while an upside surprise may nudge Sterling upward.
A revised set of German third-quarter GDP figuresis expected to show a bit of a downgrade, with output adding 0.3 percent versus the 0.4 percent gain reported in initial estimates. An update of the region-wide GDP metric for the same period is seen confirming the flash reading of 0.3 percent. The implications of such outcomes for near-term ECB policy trends seem relatively limited. This means that – absent sharp deviations from baseline forecasts – the Euro ought to pay little attention to the results. The ZEW Survey of investor confidence may be noteworthy to the extent that it reveals the level of concern about uncertainties linked to Brexit as well as the US presidential election. Here too however, the near-term FX impact may be minimal.
Later in the day, the spotlight will turn to October’s US Retail Sales report as well as comments from Fed Governor Daniel Tarullo, Vice Chair Stanly Fischer and Boston branch President Eric Rosengren. US economic news-flow has improved relative to consensus forecasts over the past month. More of the same this time around coupled with now-familiar cautiously hawkish rhetoric from Fed officials may help further steepen the priced-in rate hike path. Needless to say, such a scenario will probably bode well for the US Dollar.
Financial markets took on a corrective tone in overnight trade. The US Dollar retraced downward having climbed to levels unseen in 9 months against an average of its major counterparts in yesterday’s session. The anti-risk Japanese Yen recovered having borne a good deal of selling pressure amid surging risk appetite in the aftermath of last week’s US presidential election.
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Asia Session
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
21:30 |
Performance Services Index (OCT) |
56.3 |
- |
54.2 |
|
22:30 |
ANZ Roy Morgan Weekly Consumer Conf |
118.2 |
- |
117.8 |
|
0:30 |
AUD |
RBA Nov. Meeting Minutes |
- |
- |
- |
4:00 |
JPY |
Tokyo Condominium Sales (YoY) (OCT) |
-0.6% |
- |
40.9% |
6:00 |
JPY |
Machine Tool Orders (YoY) (OCT F) |
-8.9% |
- |
-8.9% |
European Session
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
7:00 |
EUR |
Germany GDP SA (QoQ) (3Q P) |
0.3% |
0.4% |
High |
7:00 |
EUR |
Germany GDP WDA (YoY) (3Q P) |
1.8% |
1.8% |
High |
7:00 |
EUR |
Germany GDP NSA (YoY) (3Q P) |
1.6% |
3.1% |
High |
7:45 |
EUR |
France CPI (MoM) (OCT F) |
0.0% |
0.0% |
Low |
7:45 |
EUR |
France CPI (YoY) (OCT F) |
0.4% |
0.4% |
Low |
9:00 |
EUR |
Italy GDP WDA (QoQ) (3Q P) |
0.2% |
0.0% |
Medium |
9:00 |
EUR |
Italy GDP WDA (YoY) (3Q P) |
0.8% |
0.8% |
Medium |
9:30 |
GBP |
CPI (MoM) (OCT) |
0.3% |
0.2% |
High |
9:30 |
GBP |
CPI (YoY) (OCT) |
1.1% |
1.0% |
High |
9:30 |
GBP |
CPI Core (YoY) (OCT) |
1.4% |
1.5% |
High |
9:30 |
GBP |
RPI (MoM) (OCT) |
0.2% |
0.2% |
Low |
9:30 |
GBP |
RPI (YoY) (OCT) |
2.3% |
2.0% |
Low |
9:30 |
GBP |
RPI Ex Mort Int. Payments (YoY) (OCT) |
2.4% |
2.2% |
Low |
9:30 |
GBP |
PPI Input NSA (MoM) (OCT) |
2.0% |
0.0% |
Low |
9:30 |
GBP |
PPI Input NSA (YoY) (OCT) |
9.3% |
7.2% |
Low |
9:30 |
GBP |
PPI Output NSA (MoM) (OCT) |
0.4% |
0.2% |
Medium |
9:30 |
GBP |
PPI Output NSA (YoY) (OCT) |
1.8% |
1.2% |
Medium |
9:30 |
GBP |
PPI Output Core NSA (MoM) (OCT) |
0.1% |
0.1% |
Low |
9:30 |
GBP |
PPI Output Core NSA (YoY) (OCT) |
1.6% |
1.4% |
Low |
9:30 |
GBP |
House Price Index (YoY) (SEP) |
8.1% |
8.4% |
Low |
10:00 |
EUR |
Eurozone Trade Balance SA (SEP) |
22.1b |
23.3b |
Low |
10:00 |
EUR |
Eurozone Trade Balance NSA (SEP) |
22.5b |
18.4b |
Low |
10:00 |
EUR |
Germany ZEW Survey Current Situation (NOV) |
61.6 |
59.5 |
Medium |
10:00 |
EUR |
Germany ZEW Survey Expectations (NOV) |
8.1 |
6.2 |
Medium |
10:00 |
EUR |
Eurozone ZEW Survey Expectations (NOV) |
- |
12.3 |
Medium |
10:00 |
EUR |
Eurozone GDP SA (QoQ) (3Q P) |
0.3% |
0.3% |
High |
10:00 |
EUR |
Eurozone GDP SA (YoY) (3Q P) |
1.6% |
1.6% |
High |
10:00 |
GBP |
BOE's Carney at Treasury Committee |
- |
- |
Medium |
Critical Levels
CCY |
Supp 3 |
Supp 2 |
Supp 1 |
Pivot Point |
Res 1 |
Res 2 |
Res 3 |
1.0478 |
1.0622 |
1.0680 |
1.0766 |
1.0824 |
1.0910 |
1.1054 |
|
1.2169 |
1.2343 |
1.2417 |
1.2517 |
1.2591 |
1.2691 |
1.2865 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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