Key Forex Afternoon Notes:
- Australia private expenditure q/q -2.2% vs. -1.7%
- Gfk German consumer climate 9.7 vs. 9.6
- German unemployment change -20k vs. -10k
- Italy retail sales m/m -0.2% vs. 0%
- UK GDP q/q second estimate 0.5%, unchanged; index of services 0.8% vs. 0.7%
- UK preliminary business investment q/q -1.4% vs. 2%
- Canada Core CPI m/m 0.2% vs. 0.1%; CPI m/m -0.2% vs. -0.4%
- US Core CPI m/m 0.2% vs. 0.1%; CPI m/m -0.2% vs. -0.6%
- US weekly unemployment claims 313k vs. 288k
- US Core durable goods orders m/m 0.3% vs. 0.6%; Durable goods orders m/m 2.8% vs. 1.7%
Later
- HPI m/m
- BoE MPC member Shafik speech
- FOMC member Lockhart speech
- New Zealand building consents
The markets were tuned in for a high impact day. Asian markets were relatively quiet however the Aussie dollar was volatile into the release of the private expenditure which decline -2.2%, below estimates of -1.7%. The Aussie initially fell to 0.7845 lows before reversing their losses to trade back higher near 0.789 levels. The Kiwi dollar continued to keep its gains rising to session highs of 0.759 during the European trading session. The Japanese Yen was broadly mixed but was showing signs of strength against most of the peers. USDJPY dropped briefly below the 119 handle but remains well supported above 118.4 levels.
German data was on the tap as Gfk consumer confidence managed to rise to a modest 9.7 above expectations of 9.6 while unemployment changed managed to post robust numbers with -20k decline beating estimates of -10k. The Euro was however very mixed on the news and ranging against the Greenback.
The main event during the European trading session was the UK revised GDP numbers. Data showed no change with the UK GDP remaining steady at 0.5% on the quarter at 2.7%, unchanged on an annualized basis. The index of services for the quarter declined -1.4% against expectations of a 2% rise. The ONS attributed the decline in business investment due to the oil and gas sector. The December services output saw a marked improvement of 0.6%, one of the biggest monthly increases since Feb 2013. Household spending was however subdued at 0.5% against expectations of a 0.7% estimates.
The British Sterling did not react much to the news, trading near the 1.55 handle. Against the Euro, the Pound continued to keep up its gains as the pair declined to new lows of 0.731 levels ahead of the US trading session which will see a host of important data both from the US and Canada.
Canadian CPI data showed a modest improvement, beating estimates on both the core and the headline CPI. The better than expected CPI, although still not near recovery levels is likely to see the BoC keep its benchmark interest rates unchanged in the March meeting.
Data from the US saw CPI also improve and Durable goods orders being mixed. Weekly jobless claims rose more than estimate. The Greenback was unchanged on the data as the markets take their time to weigh in on the data.
