Never miss a story from Ilya Spivak

Subscribe to recieve updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from Daily FX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Ilya Spivak

You can manage you subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points:

  • UK CPI may be most impactful on the British Pound if it disappoints
  • Euro unlikely to find directional inspiration in German ZEW survey
  • NZ Dollar still building on gains following Orr’s RBNZ appointment

UK CPI data headlines the economic calendar in European hours. The headline on-year inflation rate is expected to stay unchanged at 3 percent for a third consecutive month. An upside surprise may offer a lift to the British Pound but seems unlikely to find lasting follow-through considering the BOE’s apparent intent to keep tightening to a minimum in the next 2-3 years, above-target price growth or no.

On the other hand, an unexpectedly soft print may have significant market-moving potential in that it would complement the MPC’s position, offering cover for policymakers to delay pulling back on stimulus. UK economic news-flow has conspicuously struggled relative to forecasts recently, opening the door for a disappointment that might send Sterling lower.

Germany’s ZEW survey of investor sentiment is also on tap, but this seems unlikely to merit a response from the Euro regardless of what comes across the wires. The outcome will almost certainly fail to inspire a change in near-term ECB monetary policy while the Governing Council waits to implement an updated QE effort and monitors the markets’ subsequent response to gauge where it steers next.

Currency market price action in the Asia Pacific trading session largely mirrored the prior day’s performance. The New Zealand Dollar continued to push higher, building on gains scored after Adrian Orr was named as the next RBNZ governor. Meanwhile, the Australian Dollar rose as US Treasury bond yields pulled back, highlighting the currency’s appeal as a yield-seeking alternative to the greenback.

What is the #1 mistake that traders make, and how can you avoid it? Find out here!

Asia Session

British Pound May Be Most Responsive to UK CPI if it Disappoints

European Session

British Pound May Be Most Responsive to UK CPI if it Disappoints

** All times listed in GMT. See the full DailyFX economic calendar here.

--- 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