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Forex Analysis: US Dollar, Yen Vulnerable on Risk Appetite Recovery
The US Dollar and Japanese Yen appear vulnerable as a corrective bounce in risk appetite is reinforced by expectations for an improvement in US consumer confidence.
Talking Points
German CPI Unlikely to Stir Euro Volatility After ECB Rate Decision
Dollar, Yen at Risk as S&P 500 Futures Point to Risk Appetite Recovery
US Consume Confidence Gauge Set to Hit 62-Month High in November
The final revision of October’s German CPI figures headlines a lackluster economic calendar in European hours. Expectations call for confirmation of initial estimates that put the annual inflation rate at 2 percent, unchanged from September. Barring a sharp revision to the downside, the outcome is unlikely to elicit a strong response from forex traders in the immediate aftermath of the yesterday’s ECB rate decision, where central bank President Mario Draghi offered little in terms of concrete policy guidance. September’s UK Trade Balance data is also on tap.
On the sentiment front, S&P 500 stock index futures are pointing sharply higher in late Asian hours, hinting at a risk-on mood into the end of the trading week. Such an outcome seems reasonable after two days of aggressive selling that pushed the benchmark stock index to the lowest in three months. Such an outcome may weigh on the safe-haven US Dollar and Japanese Yen against their major counterparts. A pickup in US consumer confidence may reinforce this dynamic. Expectations suggest a sentiment gauge from the University of Michigan rose to the highest level since September 2007 in November.
Asia Session: What Happened
GMT | CCY | EVENT | ACT | EXP | PREV |
20:00 | NZD | REINZ Housing Price Index (MoM) (OCT) | 1.5% | - | 0.6% |
20:00 | NZD | REINZ Housing Price Index(OCT) | 3495.1 | - | 3442.1 |
20:00 | NZD | REINZ House Sales (YoY) (OCT) | 32.6% | - | 8.0% |
21:45 | NZD | NZ Card Spending - Retail (MoM) (OCT) | 0.4% | 0.3% | -0.6% |
21:45 | NZD | NZ Card Spending (MoM) (OCT) | 0.4% | - | -0.6% |
23:50 | JPY | Japan Money Stock M3 (YoY) (OCT) | 1.9% | 2.0% | 2.1% (R+) |
23:50 | JPY | Japan Money Stock M2+CD (YoY) (OCT) | 2.3% | 2.4% | 2.4% |
1:30 | CNY | Producer Price Index (YoY) (OCT) | -2.8% | -2.7% | -3.6% |
1:30 | CNY | Consumer Price Index (YoY) (OCT) | 1.7% | 1.9% | 1.9% |
5:00 | JPY | Consumer Confidence (OCT) | 39.7 | 39.5 | 40.1 |
5:30 | CNY | Industrial Production (YoY) | 9.6% | 9.4% | 9.2% |
5:30 | CNY | Industrial Production YTD (YoY) (OCT) | 10.0% | 9.9% | 10.0% |
5:30 | CNY | Retail Sales (YoY) (OCT) | 14.5% | 14.4% | 14.2% |
5:30 | CNY | Retail Sales YTD (YoY) (OCT) | 14.1% | 14.1% | 14.1% |
5:30 | CNY | Fixed Assets Inv Excl. Rural YTD (YoY) (OCT) | 20.7% | 20.6% | 20.5% |
Euro Session: What to Expect
GMT | CCY | EVENT | EXP | PREV | IMPACT |
7:00 | EUR | German CPI (MoM) (OCT F) | 0.0% | 0.0% | Medium |
7:00 | EUR | German CPI (YoY) (OCT F) | 2.0% | 2.0% | Medium |
7:00 | EUR | German CPI - EU Harmonised (MoM) (OCT F) | 0.1% | 0.1% | Medium |
7:00 | EUR | German CPI - EU Harmonised (YoY) (OCT F) | 2.1% | 2.1% | Medium |
7:30 | EUR | French Bank of France Business Sentiment (OCT) | 90 | 92 | Low |
7:45 | EUR | French Industrial Production (MoM) (SEP) | -1.0% | 1.5% | Low |
7:45 | EUR | French Industrial Production (YoY) (SEP) | -0.1% | -0.9% | Low |
7:45 | EUR | French Survey of Industrial Investments | - | - | Low |
7:45 | EUR | French Central Govt. Balance (€) (SEP) | - | -97.7B | Low |
7:45 | EUR | French Manufacturing Production (MoM) (SEP) | -1.3% | 1.8% | Low |
7:45 | EUR | French Manufacturing Production (YoY) (SEP) | -0.1% | -0.4% | Low |
9:00 | EUR | Italian Industrial Production wda (YoY) (SEP) | -4.7% | -5.2% | Low |
9:00 | EUR | Italian Industrial Production nsa (YoY) (SEP) | - | -5.1% | Low |
9:00 | EUR | Italian Industrial Production sa (MoM) (SEP) | -1.6% | 1.7% | Low |
9:30 | GBP | Visible Trade Balance (£) (SEP) | -8900 | -9844 | Medium |
9:30 | GBP | Trade Balance Non EU (£) (SEP) | -4600 | -4972 | Low |
9:30 | GBP | Total Trade Balance (£) (SEP) | -3200 | -4169 | Low |
Critical Levels
CCY | SUPPORT | RESISTANCE |
EURUSD | 1.2716 | 1.2812 |
GBPUSD | 1.5941 | 1.6048 |
--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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