News Column

Forex: Euro at Risk as German CPI Data, PMI Revisions Guide ECB Bets

June 1, 2014

Ilya Spivak

Talking Points:



  • Euro at Risk as German CPI, Regional PMI Data Guides ECB Policy Outlook
  • Australian Dollar Sinks as Soft Building Approvals Data Weighs on RBA Bets
  • Japanese Yen Lower as Chinese PMI Uptick Boosts Risk Appetite, Nikkei 225



    The preliminary set of May's German CPI figures headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to register at 1.1 percent, down from 1.3 percent recorded in the prior month. Final revisions of last month's German, French and region-wide Manufacturing PMI readings are also on tap. On balance, news-flow from the Eurozone has proven increasingly disappointing relative to economists' forecasts over recent months, opening the door for downside surprises. Such outcomes may amplify speculation about an expansion of ECB stimulus at this week's policy meeting, weighing the Euro. We remain short EURUSD.



    The Australian Dollar sank in overnight trade, down as much as 0.4 percent on average against its leading counterparts, after a disappointing set of Building Approvals figures. The report showed permits fell 5.6 percent in April, marking the largest month-on-month decline in 10 months. The Aussie's move lower tracked a parallel swoon in the benchmark 10-year bond yield, suggesting the soft data set worked to undermine RBA policy bets ahead of tomorrow's interest rate decision.



    The Japanese Yen also came under pressure as the benchmark Nikkei 225 stock index advanced, sapping haven demand for the safety-linked currency. The swell in risk appetite likely followed a better-than-expected Chinese Manufacturing PMI print released over the weekend. The report showed factor-sector growth the world's second-largest economy accelerated to the fastest pace in five months.









    Asia Session



    GMT

    CCY

    EVENT

    ACT

    EXP

    PREV

    1:00

    CNY

    Manufacturing PMI (MAY)

    50.8

    50.7

    50.4

    23:30

    AUD

    AiG Perf of Manufacturing Index (MAY)

    49.2

    -

    44.8

    23:50

    JPY

    Capital Spending (1Q)

    8.3%

    5.8%

    4.0%

    23:50

    JPY

    Capital Spending excl Software (1Q)

    7.4%

    5.9%

    2.8%

    23:50

    JPY

    Company Profits (1Q)

    20.2%

    -

    26.6%

    23:50

    JPY

    Company Sales (1Q)

    5.6%

    -

    3.8%

    0:00

    AUD

    RPData/Rismark House Px (MoM) (MAY)

    -1.9%

    -

    0.3%

    0:30

    AUD

    TD Securities Inflation (MoM) (MAY)

    0.3%

    -

    0.4%

    0:30

    AUD

    TD Securities Inflation (YoY) (MAY)

    2.9%

    -

    2.8%

    1:30

    AUD

    Company Operating Profit (QoQ) (1Q)

    3.1%

    2.5%

    2.5%

    1:30

    AUD

    Inventories (QoQ) (1Q)

    -1.7%

    -0.4%

    -0.6%

    1:30

    AUD

    Building Approvals (MoM) (APR)

    -5.6%

    2.0%

    -4.8%

    1:30

    AUD

    Building Approvals (YoY) (APR)

    1.1%

    12.3%

    20.9%

    1:35

    JPY

    Markit/JMMA Manufacturing PMI (MAY F)

    49.9

    -

    49.9

    5:00

    JPY

    Vehicle Sales (YoY) (MAY)



    -

    -11.4%

    6:30

    AUD

    Commodity Index AUD (MAY)



    -

    100.2

    6:30

    AUD

    Commodity Index SDR (YoY) (MAY)



    -

    -12.6%





    European Session



    GMT

    CCY

    EVENT

    EXP

    PREV

    IMPACT

    7:30

    CHF

    Manufacturing PMI (MAY)

    55.5

    55.8

    Low

    7:45

    EUR

    Italian Manufacturing PMI (MAY)

    53.6

    54.0

    Low

    7:50

    EUR

    French Manufacturing PMI (MAY F)

    49.3

    49.3

    Medium

    7:55

    EUR

    Germany Manufacturing PMI (MAY F)

    52.9

    52.9

    Medium

    8:00

    EUR

    Eurozone Manufacturing PMI (MAY F)

    52.5

    52.5

    Medium

    8:30

    GBP

    Net Consumer Credit (APR)

    0.8B

    1.1B

    Medium

    8:30

    GBP

    Net Lending Sec. on Dwellings (APR)

    1.7B

    1.8B

    Low

    8:30

    GBP

    M4 Money Supply (MoM) (APR)

    -

    -2.3%

    Low

    8:30

    GBP

    M4 Money Supply (YoY) (APR)

    -

    -0.3%

    Low

    8:30

    GBP

    M4 ex IOFCs 3M Annualised (APR)

    3.3%

    2.9%

    Low

    8:30

    GBP

    Mortgage Approvals (APR)

    64.5B

    67.1K

    Medium

    8:30

    GBP

    PMI Manufacturing (MAY)

    57.0

    57.3

    Medium

    12:00

    EUR

    German CPI (MoM) (MAY P)

    0.1%

    -0.2%

    High

    12:00

    EUR

    German CPI (YoY) (MAY P)

    1.1%

    1.3%

    High

    12:00

    EUR

    German CPI - EU Harmonised (MoM) (MAY P)

    0.1%

    -0.3%

    High

    12:00

    EUR

    German CPI - EU Harmonised (YoY) (MAY P)

    1.0%

    1.1%

    High





    Critical Levels



    CCY

    Supp 3

    Supp 2

    Supp 1

    Pivot Point

    Res 1

    Res 2

    Res 3

    EUR/USD

    1.3526

    1.3577

    1.3606

    1.3628

    1.3657

    1.3679

    1.373

    GBP/USD

    1.6621

    1.6685

    1.6720

    1.6749

    1.6784

    1.6813

    1.6877














  • For more stories on investments and markets, please see HispanicBusiness' Finance Channel



    Source: DailyFx


    Story Tools






    HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters