US Dollar May Rise on Rate Hike Bets, Euro to Look Past CPI Data
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Talking Points:
US Dollar May Rise as Employment Cost Data Boosts Fed Rate Hike Outlook
July’s Flash Eurozone CPI Unlikely to Inspire Lasting Euro Follow-Through
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The preliminary set of July’s Eurozone CPI figures headlines the economic calendar in European trading hours. The benchmark year-on-year inflation rate is expected print at 0.2 percent, unchanged from the prior month.
The release seemsunlikely to inspire meaningful follow-through from the Euro considering their limited implications for near-term ECB monetary policy. Indeed, the central bank appears effectively on auto-pilot as it continues to implement its €60 billion/month QE effort through September 2016.
US economic data will enter the spotlight in the day. The second-quarter Employment Cost Index report is in focus, where expectations point to a slight deceleration for a print at 0.6 percent compared with 0.7 percent in the three months through March.
US news-flow has increasingly outperformed relative to consensus forecasts recently, opening the door for an upside surprise. Such a result – particularly if it is bolstered by an upside revision on July’s University of Michigan Consumer Confidence gauge – stands to reinforce bets on an on-coming Fed interest rate hike following this week’s hawkish shift in FOMC rhetoric, boosting the US Dollar.
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Asia Session
GMT | CCY | EVENT | ACT | EXP | PREV |
23:05 | GBP | GfK Consumer Confidence (JUL) | 4 | 5 | 7 |
23:30 | JPY | Jobless Rate (JUN) | 3.4% | 3.3% | 3.3% |
23:30 | JPY | Job-To-Applicant Ratio (JUN) | 1.19 | 1.2 | 1.19 |
23:30 | JPY | Overall Household Spending (YoY) (JUN) | -2.0% | 1.9% | 4.8% |
23:30 | JPY | Natl CPI (YoY) (JUN) | 0.4% | 0.3% | 0.5% |
23:30 | JPY | Natl CPI Ex Fresh Food (YoY) (JUN) | 0.1% | 0.0% | 0.1% |
23:30 | JPY | Natl CPI Ex Food, Energy (YoY) (JUN) | 0.6% | 0.4% | 0.4% |
23:30 | JPY | Tokyo CPI (YoY) (JUL) | 0.2% | 0.2% | 0.3% |
23:30 | JPY | Tokyo CPI Ex-Fresh Food (YoY) (JUL) | -0.1% | 0.0% | 0.1% |
23:30 | JPY | Tokyo CPI Ex Food, Energy (YoY) (JUL) | 0.3% | 0.2% | 0.2% |
23:50 | JPY | Loans & Discounts Corp (YoY) (JUN) | 2.74% | - | 2.91% |
01:00 | NZD | ANZ Activity Outlook (JUL) | 19 | - | 23.6 |
01:00 | NZD | ANZ Business Confidence (JUL) | -15.3 | - | -2.3 |
01:15 | AUD | CBA/HIA House Affordability (2Q) | 79.7 | - | 82 |
01:30 | AUD | PPI (QoQ) (2Q) | 0.3% | - | 0.5% |
01:30 | AUD | PPI (YoY) (2Q) | 1.1% | - | 0.7% |
01:30 | AUD | Private Sector Credit (MoM) (JUN) | 0.4% | 0.5% | 0.5% |
01:30 | AUD | Private Sector Credit (YoY) (JUN) | 5.9% | 6.0% | 6.2% |
03:00 | NZD | Money Supply M3 (YoY) (JUN) | 9.5% | - | 8.1% |
05:00 | JPY | Housing Starts (YoY) (JUN) | 16.3% | 3.0% | 5.8% |
05:00 | JPY | Annualized Housing Starts (JUN) | 1.033M | 0.913M | 0.912M |
05:00 | JPY | Construction Orders (YoY) (JUN) | 15.4% | - | -7.4% |
European Session
GMT | CCY | EVENT | EXP/ACT | PREV | IMPACT |
06:00 | EUR | German Retail Sales (MoM) (JUN) | -2.3% (A) | 0.4% | Low |
06:00 | EUR | German Retail Sales (YoY) (JUN) | 5.1% (A) | -1.0% | Low |
08:30 | GBP | Lloyds Business Barometer (JUL) | - | 55 | Low |
09:00 | EUR | Eurozone Unemployment Rate (JUN) | 11.0% | 11.1% | Medium |
09:00 | EUR | Eurozone CPI Estimate (YoY) (JUL) | 0.2% | 0.2% | Medium |
09:00 | EUR | Eurozone CPI Core (YoY) (JUL A) | 0.8% | 0.8% | Medium |
Critical Levels
CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
EURUSD | 1.0746 | 1.0842 | 1.0887 | 1.0938 | 1.0983 | 1.1034 | 1.1130 |
GBPUSD | 1.5443 | 1.5523 | 1.5562 | 1.5603 | 1.5642 | 1.5683 | 1.5763 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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