Talking Points:
- Japanese Yen corrects higher after dropping to monthly low vs. majors
- Australian Dollar drops as RBA rate cut speculation cautiously rebuilds
- Markets may stall before US jobs data but Deutsche Bank risk remains
The Japanese Yen corrected broadly higher overnight in a move that looked corrective after the currency slid against all of its major counterparts for a second consecutive day, hitting the lowest level in a month. The Australian Dollar faced selling pressure, with prices tracking to front-end bond yields downward to suggest that returning RBA rate cut bets may have been behind the selloff. The priced-in probability of a cut at next month’s meeting is now 18 percent.
Looking ahead, a lull in high-profile European and US event risk may translate into a quiet, consolidative period in the near term as brace for the release of September’s US Employment report on Friday. A payrolls gain of 170k is expected, marking slight acceleration from the 151k increase in August. The on-going fiasco centered on German lender Deutsche Bank has proven to be a potent driver of risk appetite and may fuel knee-jerk volatility if an eye-catching headline crosses the wires. Rumors of a reduced settlement payout emerged earlier in the week, with CEO John Cryan reportedly due in the US to finalize negotiations.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
21:00 | NZD | ANZ Truckometer Heavy (MoM) (SEP) | -1.4% | - | 6.8% |
00:30 | AUD | Trade Balance (AUG) | -2010m | -2300m | -2410m |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT | |
06:00 | EUR | Factory Orders (MoM) (AUG) | 0.3% | 0.2% | Medium | |
06:00 | EUR | Factory Orders (YoY) (AUG) | 1.6% | -0.7% | Medium | |
07:15 | CHF | CPI (MoM) (SEP) | 0.2% | -0.1% | Medium | |
07:15 | CHF | CPI (YoY) (SEP) | 0.0% | -0.1% | Medium | |
07:15 | CHF | CPI - EU Harmonized (MoM) (SEP) | 0.3% | 0.0% | Low | |
07:15 | CHF | CPI - EU Harmonized (YoY) (SEP) | 0.0% | 0.0% | Low | |
07:30 | EUR | Markit Germany Construction PMI (SEP) | - | 51.6 | Low | |
08:10 | EUR | Markit Germany Retail PMI (SEP) | - | 54.1 | Low | |
08:10 | EUR | Markit Eurozone Retail PMI (SEP) | - | 51.0 | Medium | |
08:10 | EUR | Markit France Retail PMI (SEP) | - | 53.0 | Low | |
08:10 | EUR | Markit Italy Retail PMI (SEP) | - | 43.2 | Low | |
08:30 | GBP | Unit Labor Costs (YoY) (2Q) | - | 1.9% | Low | |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EUR/USD | 1.1123 | 1.1166 | 1.1186 | 1.1209 | 1.1229 | 1.1252 | 1.1295 |
GBP/USD | 1.2565 | 1.2650 | 1.2700 | 1.2735 | 1.2785 | 1.2820 | 1.2905 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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