TRADERS´ Blogs

Data/Event Risks

GBP:  Labour market data has the potential to impact sterling if some way off expectations. Recall, the UK is the opposite of the US, so the economy has disappointed but the labour market has held up relatively well. Both measures of unemployment rate are seen holding steady, with the narrower claimant count measure of unemployment seen falling modestly. 

Data/Event Risks

GBP:  The industrial production data is expected to show a flat reading after last month’s better than expected 0.7% MoM gain.  Sterling has received some benefit from better than expected data of late, but has certainly not been keen to run away to the upside whilst the MPC has still seen three members voting for more QE.

USD:  Just wholesale inventories data today, which is not a big risk event for the dollar.

Data/Event Risks

EUR: Just data from Italy worth watching, but it’s unlikely to cause too many issues for the single currency.  Industrial production is seen flat in month on month terms, whilst GDP is the final release so not a risk for markets.

Data/Event Risks

USD: The market is looking for a 163k gain in headline payrolls, with the unemployment rate holding at 7.5%. After yesterday’s sharp dollar sell-off, the market is more vulnerable to a short squeeze higher on the dollar if we do see a stronger reading, whilst a weak number could struggle to bring much fresh dollar weakness.

CNY:  The monthly data onslaught is seen early on Monday, with prices, retail sales, industrial production and trade. Aussie and yen will be sensitive to further fall in momentum from China.

CAD: The labour market data for Canada released the same time as for the US.  Rate is seen steady at 7.2%, with employment rising 15k. CAD has been vulnerable this week, with weaker tone to other commodity currencies not helping.

Data/Event Risks

GBP:  Low risk seen at BoE meeting (last of current governor King). Three members have been voting for more QE for past four meetings, but data has improved modestly, so would be surprising if this minority increase. Decrease is looking more likely, but we have to wait for 2 weeks for confirmation or otherwise on this.

EUR:  The ECB meeting always brings pretty strong event risk, more from the press conference than the decision itself. Focus remains on the potential for a negative deposit rate. Last month, the euro lost more than 1 big figure on the back of more positive (although still tentative) noises from the President on the possibility of such a move.  This underlines the degree to which it would be seen as negative for the currency.

Data/Event Risks

GBP:  The manufacturing PMI provided a modest lift to sterling on Monday and the currency will be watching for a repeat on the services release today, which is expected to rise from 52.9 to 53.1. 

USD:  The market expects to see the ADP numbers to record a 165k gain, after 119k in April. These are going to be even more important than usual in shaping expectations for Friday’s employment report. A stronger showing will benefit the dollar, given that the labour market is pivotal in determining when the Fed pulls back from quantitative easing. 

Data/Event Risks

EUR: Watching final manufacturing PMI data for the Eurozone.  Single currency will be focused on potential for downward revisions, especially in the core countries of France and Germany. 

USD:  The US manufacturing ISM (PMI equivalent) has held above the 50.0 level for the past in all but one month of the past four years.  The market is looking for a steady headline figure at 50.7 today, but the dollar will be vulnerable if we do get close to or below the 50 level.

Data/Event Risks

EUR: The estimate for CPI is released today, together with the unemployment rate.  CPI is seen moving higher to 1.4% (from 1.2%), with unemployment also higher to 12.2%. Both present low risks for the single currency.

USD:  The income and spending data are likely to be of modest interest for markets. The bigger risk is month end flows and positioning after what has been a pretty volatile month for FX.

Data/Event Risks

EUR: Confidence data of modest interest for the single currency, but economic confidence tailed off last month after a more positive period into year end and up to February this year. The debate is now how deep the downturn in overall Eurozone output will be this year. The single currency continues to perform relatively well vs. peers.

USD: The GDP data is the second release, so the risks are less as the market is focused on the potential for revision and further underlying details. Weekly jobless claims are expected to have settled at 340k (same as last week) after recent volatility.

Data/Event Risks

USD: Today’s data releases not generally market movers.  The consumer confidence numbers can move the dollar, but generally only if more than 5 big figures away from the market expectation, which for today’s number stands at 70.5 (from 68.1 previously).

JPY: Retail sales will be released in Japan overnight. Of course, the policies being undertaken by the authorities in Japan are designed to return the Japanese economy to one generating inflation, but retail sales will be closely watched for signs that confidence is improving and that households are not holding back on larger purchases in the hope that prices will be lower in the future. Market looks for a small 0.2% rise after 1.5% fall in March.