Talking Points
TheUS Dollar andJapanese Yen declined against most of their leading counterparts in overnight as Asian stocks rose, sapping demand for the go-to safe haven currencies. Risk appetite is on the upswing as traders look ahead to the outcome of the second3-year ECB long-term refinancing operation (LTRO). Median forecasts call for a take-up of €470 billion this time around after a €489 billion outing in December. As discussed in detail in our weeklyfundamental trends monitor, such an outcome is likely to downgrade the threat of a Eurozone-driven credit crunch in the eyes of investors, boosting market-wide sentiment. The final LTRO results are due to be announced tomorrow.
S&P 500 stock index futures are trading higher in early European trade, hinting the risk-on mood is likely to continue to boost risk-linked currencies against the greenback and the Yen. On the data front, the focus is on February’s preliminaryGerman Consumer Price Index reading. Expectations suggest the annual inflation rate will remain unchanged at 2.1 percent for the third consecutive month, a likely neutral outcome for theEuro. Indeed, priced-in expectations already call for a flat ECB outlook in the coming 12 months, so confirmation of the status quo is unlikely to mean much for the single currency particularly as LTRO preoccupies traders’ attention.
Asia Session: What Happened
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
23:50 |
JPY |
Retail Trade s.a. (MoM) (JAN) |
4.1% |
1.0% |
0.3% |
|
23:50 |
JPY |
Retail Trade (YoY) (JAN) |
1.9% |
-0.1% |
2.5% |
|
23:50 |
JPY |
Large Retailers' Sales (JAN) |
-1.0% |
-1.1% |
-0.3% (R-) |
|
5:00 |
JPY |
Small Business Confidence (FEB) |
45.3 |
- |
45.7 |
Euro Session: What to Expect
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
7:00 |
EUR |
German GfK Consumer Confidence Survey (MAR) |
6.0 |
5.9 |
Medium |
|
7:00 |
CHF |
UBS Consumption Indicator (JAN) |
- |
0.92 |
Medium |
|
10:00 |
EUR |
Euro-Zone Business Climate Indicator (FEB) |
-0.15 |
-0.21 |
Low |
|
10:00 |
EUR |
Euro-Zone Consumer Confidence (FEB F) |
-20.2 |
-20.2 |
Medium |
|
10:00 |
EUR |
Euro-Zone Economic Confidence (FEB) |
94 |
93.4 |
Low |
|
10:00 |
EUR |
Euro-Zone Industrial Confidence (FEB) |
-7 |
-7.2 |
Low |
|
10:00 |
EUR |
Euro-Zone Services Confidence (FEB) |
-0.6 |
-0.6 |
Low |
|
11:00 |
GBP |
CBI Reported Sales (FEB) |
-12 |
-22 |
Low |
|
13:00 |
EUR |
German CPI (MoM) (FEB P) |
0.5% |
-0.4% |
Medium |
|
13:00 |
EUR |
German CPI (YoY) (FEB P) |
2.1% |
2.1% |
High |
|
13:00 |
EUR |
German CPI - EU Harmonised (MoM) (FEB P) |
0.5% |
-0.5% |
Medium |
|
13:00 |
EUR |
German CPI - EU Harmonised (YoY) (FEB P) |
2.2% |
2.3% |
High |
Critical Levels
|
CCY |
SUPPORT |
RESISTANCE |
|
EURUSD |
1.3350 |
1.3528 |
|
GBPUSD |
1.5789 |
1.5937 |
---Written byIlya Spivak, Currency Strategist forDailyfx.com
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