Brèves Forex du Jour

The reluctant yen

Data/Event Risks USD: Durable goods data is always a bit of a roller-coaster and coming on a Friday, could inspire more volatility than usual in FX ahead of the weekend, with London also closed on Monday for a Bank Holiday. After a 6.9% fall last month, the expectation is for a gain of 1.9% this month.
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24/05/2013 @ 07:11 GMT

Welcome to volatile times

Data/Event Risks GBP: The GDP revisions today will be watched for potential revisions, but risks are small in our view. USD: The weekly claims data has been more volatile of late and the dollar has proven to be more sensitive to the data as a result. Market looks for modest fall to 345k from last week’s 360k reading.
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23/05/2013 @ 07:21 GMT

Timing the Fed exit

Data/Event Risks GBP: The market will focus on the minutes of the May MPC meeting for signs of a softening from those pushing for more asset purchases over the past 3 months. With growth upgraded and inflation projections downgraded and the Governor sounding modestly more confident, we could well see a scaling back of those voting for more QE. This would provide some support for sterling after yesterday’s sell-off.
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22/05/2013 @ 07:16 GMT

More good news for sterling?

Data/Event Risks GBP: The inflation data today will be a key focus, with PPI (producer prices) also released. We would agree with the market view that CPI inflation should moderate from 2.8% to 2.6%. If seen, this would be the first fall in headline inflation for 7 months. For now, it’s unlikely that sterling will be badly hit if we see a number lower than 2.6% as for now, expectations of more QE are being held back by the transition to the new Governor.
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21/05/2013 @ 07:10 GMT

Fed Focus

Data/Event Risks AUD: The minutes to the May meeting will be released overnight, this being the meeting where rates were cut from 3.00% to 2.75%. Markets will be reading closely for signs of more to come. This in essence would weaken the Aussie, but there are growing signs that the currency could correct higher from an oversold position. USD: No key data, with speech by Chicago Fed President Evans the only focus later on, with market becoming more sensitive to changes in tone from voting Fed members.
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20/05/2013 @ 06:54 GMT

Aussie car crash

Data/Event Risks GBP: MPC member Weale speaks early on, but only small risk of an impact on sterling. CAD: Inflation data is released at 12:30 GMT. The CAD has performed well in the face of the stronger dollar, only easing modestly vs. the greenback and holding below the 1.02 level for the most part. Inflation is seen falling further to 0.6% on the headline measure, with the core rate falling to 1.2% (from 1.4%). A weaker number could well serve undermine the resilience of the CAD seen so far this month.
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17/05/2013 @ 06:49 GMT

Mixed messages from Japan

Data/Event Risks EUR: The inflation data is the final number, so not likely to be a market moving event, but if revised lower it could dent the euro a little as expectations of further stimulus measures from the ECB (negative deposit rate) resurface. USD: The better weekly claims data last week were a factor in the dollar surge seen into the close, so markets will be more sensitive than normal to the data. The market expects a small move higher, from 323k to 330k.
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16/05/2013 @ 07:26 GMT

Policy and sterling

Data/Event Risks EUR: The GDP data for the Eurozone GDP is set to show a contraction after the German data came out weaker than expected this morning (rising just 0.1%). Eurozone initially seen falling -0.1%, but at least 0.2% decline now looking likely. A weaker number than this would further knock the euro.
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15/05/2013 @ 07:24 GMT

The new reality

Data/Event Risks EUR: The ZEW data at 09:00 GMT the main data risk for the single currency. Focus will be on German data after the fall seen in last month’s release (sentiment back below 40 level), with market expecting a bounce back up to this level. Steady (last was 36.3) or lower would knock the euro. EU finance minister meet today, so just worth keeping an eye out for stray comments. Banking union is back on the agenda. AUD: Australia budget presentation at 09:30 GMT (see below).
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14/05/2013 @ 07:05 GMT

The suffering Aussie

Data/Event Risks EUR: Eurozone finance ministers meet later in the day, but there are no potentially market-moving events are on the agenda. Nevertheless, there always remains the risk of stray comments from finance ministers impacting the single currency. USD: Retail sales are seen falling 0.3% in April, after a 0.4% fall in March. Firmer data should be dollar supportive, although the positive relationship between strong data and the dollar has been declining recently.
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13/05/2013 @ 06:51 GMT

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