Forex Analysis: Yen Rebound to Continue as Risk Appetite Crumbles
The Japanese Yen appears poised to continue to recover amid a return to risk aversion as markets continue to digest last week’s breakneck volatility.
Talking Points
Japanese Yen Outperforms, Comm Dollars Sink as Risk Aversion Continues
S&P 500 Stock Index Futures Hint Sentiment Likely to Remain Under Pressure
The Japanese Yen advanced in overnight trade as Asian stocks declined, driving demand for safety-linked currencies, whilethe Australian, Canadian and New Zealand Dollar underperformed. The MSCI Asia Pacific equity index fell 0.8 percent. As we discussed yesterday, the onset of risk aversion appears to reflect corrective profit-taking as investors digest last week’s volatility.
S&P 500 stock index futures are pointing lower ahead of the opening bell in Europe, pointing to continued risk-off trade in the hours ahead. The economic calendar is relatively quiet. Eurozone Retail Sales are expected to post a narrow increase, the Unemployment Rate is seen hitting a record high of 11.8 percent, and German Factory Orders are forecast to drop 1.4 percent.
Asia Session: What Happened
GMT | CCY | EVENT | ACT | EXP | PREV |
22:30 | AUD | AiG Performance of Construction Index (DEC) | 38.8 | - | 37.0 |
0:01 | GBP | BRC Sales Like-For-Like (YoY) (DEC) | 0.3% | 0.5% | 0.4% |
0:30 | AUD | Trade Balance (A$) (NOV) | -2637M | -2300M | -2443M (R-) |
5:30 | AUD | Foreign Reserves (A$) (DEC) | 47.3B | - | 46.2B |
Euro Session: What to Expect
GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
6:45 | CHF | Unemployment Rate (DEC) | 3.3% (A) | 3.1% | Medium |
6:45 | CHF | Unemployment Rate s.a. (DEC) | 3.0% (A) | 3.0% | Medium |
7:00 | EUR | German Trade Balance (€) (NOV) | 15.8B | 15.8B | Medium |
7:00 | EUR | German Imports s.a. (MoM) (NOV) | 0.5% | 2.5% | Low |
7:00 | EUR | German Exports s.a. (MoM) (NOV) | -0.5% | 0.2% | Low |
7:00 | EUR | German Current Account (€) (NOV) | 16.0B | 13.6B | Low |
7:45 | EUR | French Trade Balance (€) (NOV) | -4800M | -4685M | Low |
9:00 | EUR | Italian Unemployment Rate s.a. (NOV P) | 11.2% | 11.1% | Low |
10:00 | EUR | Euro-zone Retail Sales (MoM) (NOV) | 0.3% | -1.2% | Medium |
10:00 | EUR | Euro-zone Retail Sales (YoY) (NOV) | -2.1% | -3.6% | Medium |
10:00 | EUR | Euro-zone Unemployment Rate (NOV) | 11.8% | 11.7% | Medium |
10:00 | EUR | Euro-zone Industrial Confidence (DEC) | -14.5 | -15.1 | Low |
10:00 | EUR | Euro-zone Services Confidence (DEC) | -11.5 | -11.9 | Low |
10:00 | EUR | Euro-zone Consumer Confidence (DEC F) | -26.6 | -26.6 | Medium |
10:00 | EUR | Euro-zone Business Climate Indicator (DEC) | -1.09 | -1.19 | Low |
10:00 | EUR | Euro-zone Economic Confidence (DEC) | 86.3 | 85.7 | Low |
11:00 | EUR | German Factory Orders s.a. (MoM) (NOV) | -1.4% | 3.9% | Medium |
11:00 | EUR | German Factory Orders n.s.a. (YoY) (NOV) | -0.4% | -2.4% | Medium |
Critical Levels
CCY | SUPPORT | RESISTANCE |
EURUSD | 1.3049 | 1.3152 |
GBPUSD | 1.6052 | 1.6149 |
--- 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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