Talking Points:
- US Dollar resumes advance as Treasury yields rebound after pullback
- Comments from Fed’s Fischer to guide on-coming rate hike speculation
- Euro unlikely to find lasting directional cues in flash German CPI data
The US Dollar edged higher in otherwise quiet overnight trade as front-end bond yields rebounded following yesterday’s pullback. In turn, that move appeared corrective in the wake of the strong up-shift in Fed rate hike bets after Fed Chair Janet Yellen delivered a hawkish-sounding speech at the Jackson Hole Symposium on Friday. The central bank head said “the case for an increase in the federal funds rate has strengthened in recent months”.
Fed commentaryremains in focus in the hours ahead as Vice Chair Stanley Fischer speaks with Bloomberg TV. Fischer’s interview with CNBC after Yellen’s speech seemed to shape the markets’ hawkish interpretation of her remarks. Asked whether markets ought to take seriously the probability of a hike in September and more than one rate increase in 2016, Fischer said Yellen’s comments meant the answer on both counts is “yes”.
The greenback is likely to resume Friday’s advance if Fischer opts do double down on hawkish rhetoric. Alternatively, an attempt to soften his previous comments having had the benefit of seeing the markets’ response may weigh on the US unit. Either way however, follow-through may be limited as traders wait for the upcoming release of Augusts’ jobs data to see if policymakers’ saber-rattling finds support in concrete evidence.
The preliminary set of Augusts’ German CPI figures headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to rise to 0.5 percent. The Euro is unlikely to pay much heed to the outcome considering its limited implications for near-term ECB monetary policy trends. The central bank’s firmly dovish posture suggests an uptick is all but moot for now. Prices may be a bit more response to a downside surprise that bolsters recent commentary hinting at stimulus expansion.
What do retail traders’ buy and sell decisions hint about on-coming price trends? Find out here!
Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
22:45 | NZD | Building Permits (MoM) (JUL) | -10.5% | - | 21.9% |
23:30 | AUD | Weekly Consumer Confidence Index (AUG 28) | 118.4 | - | 121.8 |
23:30 | JPY | Jobless Rate (JUL) | 3.0% | 3.1% | 3.1% |
23:30 | JPY | Job-To-Applicant Ratio (JUL) | 1.37 | 1.38 | 1.37 |
23:30 | JPY | Overall Household Spending (YoY) (JUL) | -0.5% | -1.5% | -2.3% |
23:50 | JPY | Retail Trade (YoY) (JUL) | -0.2% | -0.9% | -1.3% |
23:50 | JPY | Retail Sales (MoM) (JUL) | 1.4% | 0.8% | 0.3% |
23:50 | JPY | Dept. Store, Supermarket Sales (JUL) | 0.6% | 0.9% | -1.5% |
01:30 | AUD | Building Approvals (MoM) (JUL) | 11.3% | 1.1% | -2.9% |
01:30 | AUD | Building Approvals (YoY) (JUL) | 3.1% | -8.3% | -5.9% |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
06:00 | EUR | German Import Price Index (MoM) (JUL) | -0.1% | 0.5% | Low |
06:00 | EUR | German Import Price Index (YoY) (JUL) | -4.0% | -4.6% | Low |
07:00 | CHF | KOF Leading Indicator (AUG) | 102.0 | 102.7 | Medium |
08:30 | GBP | Net Consumer Credit (JUL) | 1.7b | 1.8b | Medium |
08:30 | GBP | Net Lending Sec. on Dwellings (JUL) | 3.1b | 3.3b | Low |
08:30 | GBP | Mortgage Approvals (JUL) | 61.9k | 64.8k | Medium |
08:30 | GBP | Money Supply M4 (MoM) (JUL) | - | 1.1% | Low |
08:30 | GBP | M4 Money Supply (YoY) (JUL) | - | 3.5% | Low |
08:30 | GBP | M4 Ex IOFCs 3M Annualised (JUL) | 7.1% | 8.0% | Low |
09:00 | EUR | Eurozone Economic Confidence (AUG) | 104.1 | 104.6 | Low |
09:00 | EUR | Eurozone Business Climate Indicator (AUG) | 0.36 | 0.39 | Low |
09:00 | EUR | Eurozone Industrial Confidence (AUG) | -2.7 | -2.4 | Low |
09:00 | EUR | Eurozone Services Confidence (AUG) | 11.1 | 11.1 | Low |
09:00 | EUR | Eurozone Consumer Confidence (AUG F) | -8.5 | -8.5 | Medium |
09:40 | GBP | BOE ILTR Operation Results | - | - | Medium |
10:30 | USD | Fed's Fischer Speaks on Bloomberg Television | - | - | High |
12:00 | EUR | German CPI (MoM) (AUG P) | 0.1% | 0.3% | High |
12:00 | EUR | German CPI (YoY) (AUG P) | 0.5% | 0.4% | High |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EUR/USD | 1.1085 | 1.1135 | 1.1162 | 1.1185 | 1.1212 | 1.1235 | 1.1285 |
GBP/USD | 1.2889 | 1.3001 | 1.3053 | 1.3113 | 1.3165 | 1.3225 | 1.3337 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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