News Column

Forex: Aussie Dollar Gains as Jobs Growth, Chinese Exports Outperform

May 7, 2014

Ilya Spivak

Talking Points:



  • Euro Vulnerable if ECB Opts to Clarify Stimulus Expansion Strategy
  • Pound Unlikely to Stir on Another Status-Quo BOE Announcement
  • Aussie Dollar Gains on Local Jobs Report, Chinese Export Figures



    The Australian Dollar outperformed in overnight trade, rising as much as 0.4 percent on average against its leading counterparts. The move followed better-than-expected Employmentfigures that showed the economy added 14,200 in April, topping estimates calling for an 8,800 increase. March data was also upgraded to reflect a 21,900 increase versus the 18,100 gain initially reported. The Aussie found added fuel in upbeat Chinese Trade Balancedata. The trade surplus widened to $18.46 billion, beating forecasts calling for print at $16.7 billion, as exports issued an unexpected 0.9 percent year-on-year gain.



    A monetary policy announcement from the European Central Bank (ECB) headlines the economic calendar in European trading hours. Consensus forecasts suggest Mario Draghi and company will opt against introducing additional stimulus despite lingering disinflation fears. We tend to agree: while our long-term outlook does envision an expansion of ECB stimulus efforts, the central bank is likely to wait for the completion of its Asset Quality Review (AQR) to identify gaps in policy transmission before easing further.



    Recent comments from the ECB President attempting to talk down the Euro suggest further jawboning may in store however. If that takes the form of a semi-discernible timeline for additional accommodation or more precise explanation of what stimulus delivery mechanism policymakers may opt for, the single currency is likely to come under pressure.



    The Bank of England(BOE) is likewise due to update markets on its policy stance. This is likely to amount to another non-event for the British Pound. UK economic news-flow has increasingly deteriorated relative expectations since April's sit-down of the rate-setting MPC committee. The latest set of inflation figures also proved disappointing, suggesting the economy has some way to go before "spare capacity" is sufficiently absorbed to consider tightening.









    Asia Session



    GMT

    CCY

    EVENT

    ACT

    EXP

    PREV

    23:01

    GBP

    RICS House Price Balance (APR)

    54%

    55%

    57%

    0:00

    NZD

    QV House Prices (YoY) (APR)

    8.4%

    -

    8.8%

    1:30

    AUD

    Participation Rate (APR)

    64.7%

    64.7%

    64.7%

    1:30

    AUD

    Employment Change (APR)

    14.2K

    8.8K

    21.9K

    1:30

    AUD

    Unemployment Rate (APR)

    5.8%

    5.9%

    5.8%

    1:30

    AUD

    Full Time Employment Change (APR)

    14.2K

    -

    -22.7K

    1:30

    AUD

    Part Time Employment Change (APR)

    0.0K

    -

    44.6K

    2:00

    CNY

    Trade Balance (APR)

    $18.45B

    $16.70B

    $7.70B

    2:00

    CNY

    Exports (YoY) (APR)

    0.9%

    -3.0%

    -6.6%

    2:00

    CNY

    Imports (YoY) (APR)

    0.8%

    -2.1%

    -11.3%

    2:00

    JPY

    Tokyo Avg Office Vacancies (APR)

    6.64%

    -

    6.70%





    European Session



    GMT

    CCY

    EVENT

    EXP

    PREV

    IMPACT

    5:45

    CHF

    SECO Consumer Confidence (APR)

    3

    2

    Low

    6:00

    EUR

    German Industrial Production (YoY) (MAR)

    4.4%

    4.8%

    Medium

    6:00

    EUR

    German Industrial Production (MoM) (MAR)

    0.2%

    0.4%

    Medium

    7:00

    GBP

    Halifax House Price (MoM) (APR)

    0.9%

    -1.1%

    Low

    7:00

    GBP

    Halifax House Price (3M/Y) (APR)

    9.1%

    8.7%

    Low

    7:15

    CHF

    Consumer Price Index (MoM) (APR)

    0.1%

    0.4%

    Medium

    7:15

    CHF

    Consumer Price Index (YoY) (APR)

    0.1%

    0.0%

    Medium

    7:15

    CHF

    CPI - EU Harmonized (MoM) (APR)

    -

    0.6%

    Medium

    7:15

    CHF

    CPI - EU Harmonized (YoY) (APR)

    -

    -0.1%

    Medium

    11:00

    GBP

    Bank of England Rate Decision

    0.50%

    0.50%

    High

    11:00

    GBP

    BOE Asset Purchase Target

    375B

    375B

    High

    11:45

    EUR

    ECB Marginal Lending Facility

    0.75%

    0.75%

    High

    11:45

    EUR

    ECB Deposit Facility Rate

    0.00%

    0.00%

    High

    11:45

    EUR

    European Central Bank Rate Decision

    0.25%

    0.25%

    High

    12:30

    EUR

    ECB's Draghi Holds Press Conference

    -

    -

    High





    Critical Levels



    CCY

    Supp 3

    Supp 2

    Supp 1

    Pivot Point

    Res 1

    Res 2

    Res 3

    EUR/USD

    1.3862

    1.3891

    1.3901

    1.3920

    1.3930

    1.3949

    1.3978

    GBP/USD

    1.6893

    1.6928

    1.6940

    1.6963

    1.6975

    1.6998

    1.7033














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    Source: DailyFx