Euro Vulnerable as German CPI, Draghi Commentary Looms Ahead
Talking Points:
- Aussie, NZ Dollars Rise as Australian 3Q Capex Data Tops Expectations
- Japanese Yen Higher as Nikkei 225 Drops, Fueling Safe-Haven Demand
- Euro Vulnerable with German CPI, Draghi Commentary in the Spotlight
The Australian and New Zealand Dollars outperformed in overnight trade, rising as much as 0.5 percent apiece against the majors. The move followed a supportive Australian Capital Expenditure figures that showed spending on fixed assets unexpectedly rose 0.2 percent in the third quarter. Economists were forecasting a decrease of 1.9 percent ahead of the release.
An increase in capex outlays bodes well for Australian economic growth, which is in turn supportive for RBA interest rate bets. It is likewise positive for New Zealand’s output and monetary policy prospects considering Australia is the island nation’s largest export market, accounting for over 20 percent of cross-border sales.
The Japanese Yen likewise advanced, adding as much as 0.4 percent on average against its leading counterparts. The move paced a drop in Japan’s benchmark Nikkei 225 stock index, pointing to risk aversion as the catalyst behind demand for the safety-linked currency.
Looking ahead, November’s preliminary German CPI report is in focus in European trading hours. The baseline year-on-year inflation rate is expected to decline to 0.6 percent, the lowest in nearly five years. A soft outcome may fuel speculation about ECB stimulus expansion, weighing on the Euro.
The single currency may find added downward pressure from scheduled commentary by ECB President Mario Draghi. The central bank chief may echo yesterday’s remarks from Vice President Vitor Constancio, who said doubts about the potency of QE are “not well founded” and alluded that the decision to buy sovereign bonds could be made as soon as the first quarter of next year.
New to FX? START HERE!
Asia Session
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
21:45 |
NZD |
Trade Balance (NZ$) (OCT) |
-908M |
-642M |
-1367M |
|
21:45 |
NZD |
Trade Balance YTD (NZ$) (OCT) |
-107M |
183M |
633M |
|
21:45 |
NZD |
Imports (NZ$) (OCT) |
4.94B |
4.60B |
4.98B |
|
21:45 |
NZD |
Exports (NZ$) (OCT) |
4.03B |
3.85B |
3.61B |
|
0:00 |
AUD |
HIA New Home Sales (MoM) (OCT) |
3.0% |
- |
0.0% |
|
0:30 |
AUD |
Private Capital Expenditure (3Q) |
0.2% |
-1.9% |
1.6% |
|
1:30 |
CNY |
Industrial Profits (YoY) (OCT) |
-2.1% |
- |
0.4% |
|
2:00 |
NZD |
RBNZ Net Currency Sales (OCT) |
-1M |
- |
-30M |
European Session
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
8:15 |
CHF |
Industrial Production (YoY) (3Q) |
- |
3.1% |
Low |
|
8:55 |
EUR |
German Unemployment Change (NOV) |
-1K |
-22K |
Medium |
|
8:55 |
EUR |
German Unemployment Rate s.a. (NOV) |
6.7% |
6.7% |
Medium |
|
9:00 |
EUR |
ECB's Constancio Presents FSR |
- |
- |
Medium |
|
9:00 |
EUR |
Eurozone M3 s.a. (YoY) (OCT) |
2.6% |
2.5% |
Low |
|
9:00 |
EUR |
Eurozone M3 s.a. (3M) (OCT) |
2.4% |
2.1% |
Low |
|
9:30 |
GBP |
Lloyds Business Barometer (NOV) |
- |
35 |
Low |
|
10:00 |
EUR |
Eurozone Economic Confidence (NOV) |
100.3 |
100.7 |
Low |
|
10:00 |
EUR |
Eurozone Industrial Confidence (NOV) |
-5.5 |
-5.1 |
Low |
|
10:00 |
EUR |
Eurozone Consumer Confidence (NOV F) |
-11.6 |
-11.6 |
Low |
|
10:00 |
EUR |
Eurozone Services Confidence (NOV) |
4 |
4.4 |
Low |
|
10:00 |
EUR |
Eurozone Business Climate Indicator (NOV) |
0.02 |
0.05 |
Low |
|
11:30 |
EUR |
ECB's Draghi Speaks in Helsinki |
- |
- |
Medium |
|
12:00 |
EUR |
German GfK Consumer Conf (DEC) |
8.6 |
8.5 |
Low |
|
12:15 |
EUR |
ECB's Weidmann Speaks in Frankfurt |
- |
- |
Low |
|
13:00 |
EUR |
German CPI (MoM) (NOV P) |
0.0% |
-0.3% |
High |
|
13:00 |
EUR |
German CPI (YoY) (NOV P) |
0.6% |
0.8% |
High |
|
13:00 |
EUR |
German CPI - EU Harmonised (MoM) (NOV P) |
0.0% |
-0.3% |
High |
|
13:00 |
EUR |
German CPI - EU Harmonised (YoY) (NOV P) |
0.5% |
0.7% |
High |
Critical Levels
|
CCY |
Supp 3 |
Supp 2 |
Supp 1 |
Pivot Point |
Res 1 |
Res 2 |
Res 3 |
|
EURUSD |
1.2318 |
1.2406 |
1.2456 |
1.2494 |
1.2544 |
1.2582 |
1.2670 |
|
GBPUSD |
1.5505 |
1.5632 |
1.5712 |
1.5759 |
1.5839 |
1.5886 |
1.6013 |
--- 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
original source
Indonesia