Weekly Forex Forecast: 08 – 12 June

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.

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.