Yen Falls as Stocks Rise, US Dollar May Decline as FOMC Looms

2016-12-09 06:02:00

Talking Points:

Yen drops as ECB stimulus boost sends global shares upward
Lull in key event risk may make for quiet end to trading week
US Dollar may decline in pre-positioning for FOMC meeting

The Japanese Yen underperformed in otherwise quiet overnight trade as most Asian stocks advanced, putting pressure on the perennial anti-risk currency. Regional shares followed Wall Street higher after the ECB expanded its monetary stimulus effort.

Mario Draghi and company extended QE asset purchases to run through 2017 from the previous end date at the end of March. The size of monthly asset purchases was lowered from €80 to €60 billion in the nine months from April through December.

The markets’ baseline expectation ahead of the ECB policy announcement favored a 6-month extension that kept the current pace of uptake unchanged. Compared to this, the central bank’s new scheme amounts to a net €60bnin additional accommodation.

From here, a quiet data docket in European and US trading hours argues for congestion as markets digest recent volatility. A US Dollar pullback may be in the cards amid pre-positioning for next week’s FOMC announcement as traders weigh the possibility that the Fed’s 2017 outlook will be more timid than their own.

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Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
21:45	NZD	Card Spending Retail (MoM) (NOV)	-0.1%	0.40%	0.5%
21:45	NZD	Card Spending Total (MoM) (NOV)	-0.3%	-	0.6%
23:50	JPY	BSI Large All Industry (QoQ) (4Q)	3	-	1.9
23:50	JPY	BSI Large Manufacturing (QoQ) (4Q)	7.5	-	2.9
23:50	JPY	Money Stock M2 (YoY) (NOV)	4.0%	3.7%	3.7%
23:50	JPY	Money Stock M3 (YoY) (NOV)	3.4%	3.2%	3.1%
0:30	AUD	Home Loans (MoM) (OCT)	-0.8%	-1.0%	1.5%
0:30	AUD	Investment Lending (OCT)	0.7%	-	5.1%
0:30	AUD	Owner-Occupier Loan Value (MoM) (OCT)	-0.8%	-	0.8%
1:30	CNY	CPI (YoY) (NOV)	2.3%	2.2%	2.1%
1:30	CNY	PPI (YoY) (NOV)	3.3%	2.3%	1.2%

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
6:45	CHF	Unemployment Rate (NOV)	3.3%	3.2%	Medium
6:45	CHF	Unemployment Rate SA (NOV)	3.3%	3.3%	Medium
7:00	EUR	German Trade Balance (OCT)	22.0b	24.2b	Medium
7:00	EUR	German Current Account Balance (OCT)	22.0b	24.2b	Medium
7:00	EUR	German Exports SA (MoM) (OCT)	0.9%	-1.2%	Low
7:00	EUR	German Imports SA (MoM) (OCT)	1.1%	-0.7%	Low
7:00	EUR	German Labor Costs WDA (YoY) (3Q)	-	1.8%	Low
7:00	EUR	German Labor Costs SA (QoQ) (3Q)	-	0.2%	Low
7:45	EUR	French Budget Balance YTD (OCT)	-	-83.0b	Low
7:45	EUR	French Industrial Production (MoM) (OCT)	0.6%	-1.1%	Low
7:45	EUR	French Industrial Production (YoY) (OCT)	-0.6%	-1.1%	Low
7:45	EUR	French Manufacturing Production (MoM) (OCT)	0.7%	-1.1%	Low
7:45	EUR	French Manufacturing Production (YoY) (OCT)	0.1%	-0.9%	Low
9:30	GBP	Visible Trade Balance (£/Mn) (OCT)	-11800	-12698	Medium
9:30	GBP	Trade Balance Non EU (£/Mn) (OCT)	-3450	-3969	Medium
9:30	GBP	Trade Balance (£/Mn) (OCT)	-4300	-5221	Medium
9:30	GBP	Construction Output SA (MoM) (OCT)	0.2%	0.3%	Low
9:30	GBP	Construction Output SA (YoY) (OCT)	-0.1%	0.2%	Low
9:30	GBP	BoE/TNS Inflation Next 12 Mths (NOV)	-	2.2%	Low