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Euro, Aussie Dollar May Rise as Yen Falls on Greece Funding Deal
DailyFX.com -
Talking Points:
Euro to Look Past CPI Data, Focus on Greece Debt Negotiations
Greek Deal May Boost Aussie and NZ Dollar, Boost Japanese Yen
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The preliminary set of March Eurozone CPI figures headlines the economic calendar in European hours. The benchmark year-on-year inflation rate is expected to register at 0.3 percent, rising for a second consecutive month. The outcome seems unlikely to offer much by way of lasting Euro volatility however considering the results’ limited impact on the near-term ECB policy outlook.
Rather, the spotlight is likely to remain on Greece. Athens submitted a list of proposed reforms on Friday. The markets now await the verdict on whether the “institutions” representing Greece’s creditors – the EU, the ECB and the IMF – will approve it and unlock the next round of bailout funding. Investors fear that if external funding is not secured, a cash crunch and subsequent default may lead to the country’s exit from the Eurozone.
On balance, both sides of the negotiation are interested in a deal. Prime Minister Alexis Tsipras and company surely realize that a disorderly redenomination will probably compound the country’s economic woes and cost them their jobs. Meanwhile, EU and IMF officials no doubt prefer to avoid a “Grexit” scenario for fear of the precedent it may set. On balance, this means that some kind of accommodation is more likely than not.
An accord that prevents a default and keeps Greece in the currency bloc is likely to prove supportive for the single currency. Follow-through may be somewhat limited however as on-going ECB QE casts a dark cloud over the near-term outlook. It may likewise boost overall risk appetite, sending the sentiment-geared Australian and New Zealand Dollars upward while punishing the safe-haven Japanese Yen. Needless to say, failing to reach a deal stands to produce the opposite response.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
21:45 | NZD | Building Permits (MoM) (FEB) | -6.3% | - | -4.6% |
22:30 | AUD | ANZ Roy Morgan Weekly Consumer Conf | 112.3 | - | 111.4 |
23:05 | GBP | GfK Consumer Confidence (MAR) | 4 | 2 | 1 |
23:50 | JPY | Loans & Discounts Corp (YoY) (FEB) | 3.22% | - | 2.91% |
0:00 | AUD | HIA New Home Sales (MoM) (FEB) | 1.1% | - | 1.8% |
0:00 | NZD | ANZ Activity Outlook (MAR) | 42.2 | - | 40.9 |
0:00 | NZD | ANZ Business Confidence (MAR) | 35.8 | - | 34.4 |
0:30 | AUD | Private Sector Credit (MoM) (FEB) | 0.5% | 0.5% | 0.6% |
0:30 | AUD | Private Sector Credit (YoY) (FEB) | 6.2% | 6.3% | 6.1% |
2:00 | NZD | Money Supply M3 (YoY) (FEB) | 6.6% | - | 6.2% |
4:00 | JPY | Vehicle Production (YoY) (FEB) | -5.3% | - | -9.7% |
5:00 | JPY | Housing Starts (YoY) (FEB) | -6.8% | -13.0% | |
5:00 | JPY | Annualized Housing Starts (FEB) | 0.877M | 0.864M | |
5:00 | JPY | Construction Orders (YoY) (FEB) | - | 27.5% |
European Session
GMT | CCY | EVENT | EXP | PREV | IMPACT |
6:00 | EUR | German Retail Sales (MoM) (FEB) | -0.7% | 2.3% | Medium |
6:00 | EUR | German Retail Sales (YoY) (FEB) | 3.4% | 5.3% | Medium |
7:55 | EUR | German Unemployment Change (MAR) | -12K | -20K | Medium |
7:55 | EUR | German Unemployment Rate (MAR) | 6.5% | 6.5% | Medium |
8:30 | GBP | Current Account Balance (4Q) | -22.0B | -27.0B | Low |
8:30 | GBP | GDP (QoQ) (4Q F) | 0.5% | 0.50% | Medium |
8:30 | GBP | GDP (YoY) (4Q F) | 2.7% | 2.7% | Medium |
8:30 | GBP | Total Business Investment (QoQ) (4Q F) | - | -1.4% | Low |
8:30 | GBP | Total Business Investment (YoY) (4Q F) | - | 2.1% | Low |
8:30 | GBP | Index of Services (MoM) (JAN) | 0.3% | 0.6% | Low |
8:30 | GBP | Index of Services (3M/3M) (JAN) | 0.8% | 0.8% | Low |
8:30 | GBP | Lloyds Business Barometer (MAR) | - | 45 | Low |
9:00 | EUR | Eurozone Unemployment Rate (FEB) | 11.2% | 11.2% | Medium |
9:00 | EUR | Eurozone CPI Estimate (YoY) (MAR) | -0.1% | -0.3% | High |
9:00 | EUR | Eurozone CPI Core (YoY) (MAR A) | 0.7% | 0.7% | High |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EURUSD | 1.0659 | 1.0754 | 1.0794 | 1.0849 | 1.0889 | 1.0944 | 1.1039 |
GBPUSD | 1.4525 | 1.4673 | 1.4742 | 1.4821 | 1.4890 | 1.4969 | 1.5117 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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