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13 Mar 2015
What's next: Quiet European calendar, Canadian jobs main focus
FXStreet (Bali) - Find below a comprehensive wrap-up of the latest headlines from Friday in Asia, the main themes dominating FX trading during the Far-East session, and what to expect for the next European and US sessions.
Main headlines in Asia
BNZ-BusinessNZ PMI: 29th straight month of expansion
Japan's FinMin Aso: Weak yen a plus for Japan's economy
Dominating themes in Asia - centered on JPY, AUD, NZD
The US Dollar regained some of its allure in a low key affair, with focus almost completely shifted to next week's FOMC risk event. The AUD/USD found a solid wall of offers ahead of 0.7750, unable to be penetrated, leading to a breach of intraday support at 0.7680, with the rate printing session lows at 0.7669.
USD/JPY firmed up in the tune of 25/30 pips from an opening of 121.25 up towards 121.50, where exporters supply stalled the progress. The Nikkei 225 saw a solid climb, heading into the close up by 1.47%. The pair gained +0.19% in Asia.
NZD/USD failed to rotate higher past 0.74 handle, with some profit-taking ahead of the weekend combined with timid demand for the USD resulted in the rate returning to Thursday's key low pivot point at 0.7360/65, an area that buyers should hold to maintain a constructive outlook for the day, otherwise, sellers may gain the upper hand for a potential acceleration towards the 0.73 vicinity.
Heading into Friday Europe - centered on EUR, GBP
In today's European session, the calendar is quite uneventful, with Italian CPI and Wholesale price index in Germany the only data releases. In the US, the data flow will pick up, as we have the University of Michigan consumer sentiment. According to Westpac, "this is expected to fall with higher oil prices and market interest rates weighing." In Canada, the employment report is due as well.
With regards to the US Dollar outlook for this Friday, the aggressive profit-taking action seen yesterday may have further to run, Westpac notes. However, the bank sees this "as a short term correction in a longer term trend, with the FOMC set to move a step closer to policy normalisation next week."
One key theme around trading desks this week is the fact that 40% of eurozone debt of all maturity trades at or below zero yield, Westpac notes, which represents a 23% increase from 6 months ago. "We are set to remain in a super low global yield environment for some time to come, with capital flights from the Eurozone being a key driver for this weaker EUR trend", the bank adds.
Yujiro Goto, FX Strategist at Nomura, expects fixed income outflows from the euro area to accelerate further owing to fundamental factors, noting "fundamental factors such as negative yields and a lower home bias."
With regards to the British Pound, the currency was the notable laggard on Thursday, with a decisive break under 1.4900 seen, which may prompt further selling interest based on techhnicals. Comments from BOE Governor Carney in a regional newspaper saying there is no rush to raise rates added sell pressure.
Main headlines in Asia
BNZ-BusinessNZ PMI: 29th straight month of expansion
Japan's FinMin Aso: Weak yen a plus for Japan's economy
Dominating themes in Asia - centered on JPY, AUD, NZD
The US Dollar regained some of its allure in a low key affair, with focus almost completely shifted to next week's FOMC risk event. The AUD/USD found a solid wall of offers ahead of 0.7750, unable to be penetrated, leading to a breach of intraday support at 0.7680, with the rate printing session lows at 0.7669.
USD/JPY firmed up in the tune of 25/30 pips from an opening of 121.25 up towards 121.50, where exporters supply stalled the progress. The Nikkei 225 saw a solid climb, heading into the close up by 1.47%. The pair gained +0.19% in Asia.
NZD/USD failed to rotate higher past 0.74 handle, with some profit-taking ahead of the weekend combined with timid demand for the USD resulted in the rate returning to Thursday's key low pivot point at 0.7360/65, an area that buyers should hold to maintain a constructive outlook for the day, otherwise, sellers may gain the upper hand for a potential acceleration towards the 0.73 vicinity.
Heading into Friday Europe - centered on EUR, GBP
In today's European session, the calendar is quite uneventful, with Italian CPI and Wholesale price index in Germany the only data releases. In the US, the data flow will pick up, as we have the University of Michigan consumer sentiment. According to Westpac, "this is expected to fall with higher oil prices and market interest rates weighing." In Canada, the employment report is due as well.
With regards to the US Dollar outlook for this Friday, the aggressive profit-taking action seen yesterday may have further to run, Westpac notes. However, the bank sees this "as a short term correction in a longer term trend, with the FOMC set to move a step closer to policy normalisation next week."
One key theme around trading desks this week is the fact that 40% of eurozone debt of all maturity trades at or below zero yield, Westpac notes, which represents a 23% increase from 6 months ago. "We are set to remain in a super low global yield environment for some time to come, with capital flights from the Eurozone being a key driver for this weaker EUR trend", the bank adds.
Yujiro Goto, FX Strategist at Nomura, expects fixed income outflows from the euro area to accelerate further owing to fundamental factors, noting "fundamental factors such as negative yields and a lower home bias."
With regards to the British Pound, the currency was the notable laggard on Thursday, with a decisive break under 1.4900 seen, which may prompt further selling interest based on techhnicals. Comments from BOE Governor Carney in a regional newspaper saying there is no rush to raise rates added sell pressure.