Weekly Forex Forecast: 08 – 12 June

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The Euro, single currency turned out on the top of the list last week, with an aggregate performance of 1.07% against the US Dollar. Despite the geo-political risks of the Greece debt negotiations, the Euro was supported by a better than expected economic data and also news that the Greece negotiations were encouraging. The Euro lost ground to the Greenback only on Friday on a broadly positive jobs report.

Weekly Spot FX Performance – 05/06/2015 (Source: Finviz.com)
Weekly Spot FX Performance – 05/06/2015 (Source: Finviz.com)

The Kiwi Dollar and the Japanese Yen made up the tail end of the list as the weakest currencies, losing -0.89% and -1.17% to the Greenback. The Kiwi continued to weaken across the board as economic data kept the currency subdued giving rise to speculation that the RBNZ could come out with a rate cut. The Yen, on the other hand weakened on technical trading rather than any economic data (which was largely positive). The weaker Yen saw most of the Yen crosses post new highs across the board.

Fundamentals for the Week 06 – 12 June

Date Time Currency Detail Expected Previous
08-Jun 02:50 JPY Current Account 1.45T 2.07T
JPY Final GDP q/q 0.70% 0.60%
JPY Bank Lending y/y 2.60%
JPY Final GDP Price Index y/y 3.40% 3.40%
Tentative CNY Trade Balance 44.9B 34.1B
08:00 JPY Economy Watchers Sentiment 54.2 53.6
09:00 EUR German Industrial Production m/m 0.60% -0.50%
EUR German Trade Balance 18.1B 19.3B
11:30 EUR Sentix Investor Confidence 18.9 19.6
Day 2 ALL G7 Meetings
15:15 CAD Housing Starts 187K 183K
15:30 CAD Building Permits m/m 3.40% 11.60%
17:00 USD Labor Market Conditions Index m/m -1.9
23:30 CAD Gov Council Member Wilkins Speaks
09-Jun 01:45 NZD Manufacturing Sales q/q -0.70%
02:01 GBP BRC Retail Sales Monitor y/y -2.40%
02:50 JPY M2 Money Stock y/y 3.60% 3.60%
04:30 AUD NAB Business Confidence 3
AUD ANZ Job Advertisements m/m 2.30%
AUD Home Loans m/m -1.80% 1.60%
CNY CPI y/y 1.30% 1.50%
CNY PPI y/y -4.50% -4.60%
08:00 JPY Consumer Confidence 41.9 41.5
08:45 CHF Unemployment Rate 3.30% 3.30%
09:00 JPY Prelim Machine Tool Orders y/y 10.50%
09:45 EUR French Gov Budget Balance -26.3B
10:15 CHF CPI m/m 0.10% -0.20%
11:30 GBP Trade Balance -10.0B -10.1B
12:00 EUR Revised GDP q/q 0.40% 0.40%
16:00 USD NFIB Small Business Index 97.1 96.9
17:00 USD JOLTS Job Openings 5.03M 4.99M
USD Wholesale Inventories m/m 0.20% 0.10%
10-Jun 02:50 JPY Core Machinery Orders m/m -1.70% 2.90%
JPY PPI y/y -2.20% -2.10%
03:30 AUD Westpac Consumer Sentiment 6.40%
05:50 AUD RBA Gov Stevens Speaks
09:45 EUR French Industrial Production m/m 0.30% -0.30%
11:00 EUR Italian Industrial Production m/m 0.20% 0.40%
11:30 GBP Manufacturing Production m/m 0.10% 0.40%
GBP Industrial Production m/m 0.20% 0.50%
17:00 GBP NIESR GDP Estimate 0.40%
17:30 USD Crude Oil Inventories -1.9M
20:01 USD 10-y Bond Auction 2.24|2.7
21:00 USD Federal Budget Balance -98.0B 156.7B
23:00 GBP BOE Gov Carney Speaks
11-Jun 00:00 NZD Official Cash Rate 3.50% 3.50%
NZD RBNZ Rate Statement
NZD RBNZ Monetary Policy Statement
00:05 NZD RBNZ Press Conference
02:01 GBP RICS House Price Balance 35% 33%
02:50 JPY BSI Manufacturing Index 3.2 2.4
04:00 AUD MI Inflation Expectations 3.60%
04:30 AUD Employment Change 15.2K -2.9K
AUD Unemployment Rate 6.20% 6.20%
11th-15th NZD REINZ HPI m/m 0.50%
08:30 CNY Industrial Production y/y 6.00% 5.90%
CNY Fixed Asset Investment ytd/y 12.00%
CNY Retail Sales y/y 10.10% 10.00%
EUR French Final Non-Farm Payrolls q/q -0.10% -0.10%
09:45 EUR French CPI m/m 0.30% 0.10%
11th-15th CNY New Loans 860B 708B
11th-15th CNY M2 Money Supply y/y 10.60% 10.10%
Tentative GBP 30-y Bond Auction 2.34|1.4
Tentative EUR Italian 10-y Bond Auction
15:30 CAD NHPI m/m 0.20% 0.00%
CAD Capacity Utilization Rate 83.60%
USD Core Retail Sales m/m 0.70% 0.10%
USD Retail Sales m/m 1.10% 0.00%
USD Unemployment Claims 277K 276K
USD Import Prices m/m 0.90% -0.30%
17:00 USD Business Inventories m/m 0.20% 0.10%
17:30 CAD BOC Financial System Review
USD Natural Gas Storage 132B
18:15 CAD BOC Gov Poloz Speaks
20:01 USD 30-y Bond Auction 3.04|2.2
12-Jun 01:30 NZD Business NZ Manufacturing Index 51.8
01:45 NZD FPI m/m -0.30%
07:30 JPY Revised Industrial Production m/m 1.00% 1.00%
JPY Tertiary Industry Activity m/m 0.40% -1.00%
11:30 GBP Construction Output m/m 0.10% 3.90%
12:00 EUR Industrial Production m/m 0.40% -0.30%
15:30 USD PPI m/m 0.40% -0.40%
USD Core PPI m/m 0.10% -0.20%
17:00 USD Prelim UoM Consumer Sentiment 91.3 90.7
USD Prelim UoM Inflation Expectations 2.80%

 

Currencies/Events to Watch this Week

Australia Jobs Report: The economic data from Australia has been largely mixed so far. While GDP for the quarter increased 0.9%, retail sales remained flat. Focus will shift to the Australian jobs report due this week. While the expectations are for the unemployment rate to remain unchanged at 6.2%, the employment change is expected to see 15.2k new jobs being added. With the Australian dollar trading quite subdued, the jobs data could potentially act as a catalyst offering either a strong bounce or continue to keep the Aussie under pressure.

China inflation: After months of subdued inflation print, which also saw the PBoC cut interest rates, the consumer price index in China managed to rise 1.5% last month. Expectations this week is for a slower pace of rise in inflation by 1.3%. Following the CPI data, the Producer Price index is also due, which is expected to show contraction. The markets will be looking to the Chinese data to ascertain the PBoC’s next move that could have potential impact on not just the equities but also the currency markets.

Eurozone GDP: After seeing a data heavy week last week, the Euro heads into somewhat calm waters with mostly second-tier data due for release this week. However, of important will be the revised GDP data, which is expected to remain unchanged. It is unlikely that there will be much of a market reaction from this data as the markets continues to focus on the Greece debt negotiation talks the coming week.

British Manufacturing Production: The Pound sterling also sees a quiet week ahead with the major data being the manufacturing and industrial production, both of which is expected to show a modest slowdown. The Pound Sterling has managed to remain strong for the most part against its peers and this week’s economic data could possibly either help support the Pound sterling or could result in putting downward pressure on the currency.

Japan Revised GDP: Expectations are for the revised quarterly GDP to be move a point higher from 0.6% to 0.7%. Overall there aren’t any major economic data due for the week ahead for the Yen. Going by last week’s price action, the Yen has pretty much ignored all the economic data and it is likely that this trend could continue, although a better than expected print could at best stall the Yen’s weakening across the board.

RBNZ Monetary Policy: After weeks of staying subdued across the board, it is no doubt that the Kiwi dollar has been one of the weakest performing currency. The RBNZ’s interest rate decision in this aspect could be of importance as any talks of rate cut could further weaken the currency. Expectations are for the RBNZ to leave rates unchanged however, which could provide some short term relief to the Kiwi.

US Retail sales: After managing to close the week on a stronger note, the Greenback will see another batch of economic data this week which could either help support the buck or could yet again weaken the sentiment. Retail sales, PPI and Prelim UoM data are due this week and although not that important in the larger scope of things, the data could very well help shape the short term sentiment in the markets.

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