Advanced Retail Sales, Chinese GDP Event Risk on Economic Calendar

Talking Points:

-Advanced Retail Sales data could be the fundamental catalyst needed for USD bulls.

-Chinese GDP presents risks for USDCNH volatility, 6.25 in focus.

-New Zealand inflation figures likely to fuel NZD directional bias.

Economic Calendar Events for the Week

A busy economic calendar full of event risk begins with the USD on Monday, April 14th. After multiple weeks of USD weakness, fundamental catalysts such as the US Advance Retail Sales print could prove valuable to USDollar bulls if we do see a better than expected print. Current estimates peg the March figure at 0.8% vs. 0.3% MoM prior. This is one of the first data prints that will give market participants insight as to whether bad weather in the United States was actually the catalyst for weak data. A miss here would not be viewed favorably and could help fuel further USD selling.

Any uptick in inflation will once against fuel speculation of sooner than expected rate hikes out of the Bank of England. The central bank has remained silent for the most part and has not commented on such speculation. Higher inflation over the next few months could push Carney to provide forward guidance on any possible rate hike moving forward. Negative data on the other hand would likely reflect as bearish for the Pound, especially if the USD begins to regain its place after a multi-week selloff.

The RBNZ has struggled with a combination of higher home prices and declining prospects in the medium term. This drove the central bank to cut rates to record lows, but such actions only helped home prices rise further. LVR restrictions helped cool the property market and most likely accounted for up to 50bps of rate hikes, but a further momentum in prices forced the central bank’s hand last month. Any indication that Q1 price were above expectations could help boost the Kiwi further in the context of a central bank that may have a lot of catching up to do in regards to rates.

Although many skeptics point to the lack of deviations from expectations for Chinese GDP, the print is still a market mover. After a massive move in the Australian Dollar, this GDP figure could adversely impact AUD crosses if it misses expectations. Import and export figures released last week disappointed market expectations and were truly representative of the softening data as of late. Nevertheless, market participants have bid the Aussi in the face of Chinese data as figures out of Australia have been coming in above estimates for weeks. Note that FXCM now offers USDCNH to trade and there may be risks for the pair above 6.25.

After an incredibly strong week for the Canadian Dollar, all eyes will be on the rate decision and CPI figures on Wednesday and Thursday. Gov. Poloz of the Bank of Canada did strike a dovish tilt some months ago, but data as of late has come in above expectations and it would not be a surprise if we did see the central bank strike a more moderate tone. The NSA MoM figure is expected to come in at 0.4% vs. 0.8% prior while the core YoY print is estimated at 1.3% vs. 1.2% prior. A miss here could help the Dollar regain some strength against the Canadian Dollar.

Gregory Marks, DailyFX Research Team

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