Major Currencies vs. US Dollar (% change)
Talking Points
- Markets to Focus on US Data, Eurozone Debt Crisis in the Background
- Signs of Improving US Outlook to Boost Risky Assets, Weigh on US Dollar
Tight correlations between most major currency pairs and the S&P 500
put broad-based market sentiment firmly in control of FX market price
action (USDJPY remains an exception, with intervention fears insulating
the pair from larger market themes). While the Eurozone debt crisis presents a lingering worry, the absence of scheduled event risk on this front until next week puts the spotlight on US economic data over the days ahead.
Economists’ consensus forecasts (as polled by
Bloomberg) suggest GDP growth in the United States will accelerate to
2.1 percent in 2012, separating it from the other two leading engines of
global output (the Eurozone and China) where performance is expected to
deteriorate. This it will be up largely up to the North American
behemoth to mitigate the severity of the worldwide slowdown now widely
expected this year. With that in mind, the data docket appears broadly
supportive: the ISM Manufacturing gauge is set to show factory-sector growth accelerated to the strongest in six months, Factory Orders are set to add the most since July, and the all-important Nonfarm Payrolls reading is forecast to reveal job creation continued to accelerate as the employment grew by 150,000.
On balance, this favors a cautious recovery in risk
appetite and appears to bode ill for the safe-haven US Dollar against
most of its counterparts. Needless to say, an unexpected headline
reminding investors of the danger still posed by Eurozone sovereign
solvency issues may upset this dynamic. Indeed, countries in the
currency bloc will need to refinance a whopping €157 billion in maturing
debt (likely at punitively high borrowing costs) just in the first
three months of the year.
EURO
Key Upcoming Events
DAY
|
GMT
|
EVENT
|
EXP
|
PREV
|
IMPACT
|
04 JAN
|
9:00
|
Euro Zone PMI Composite (DEC F)
|
47.9
|
47.9
|
Medium
|
04 JAN
|
10:00
|
Euro Zone CPI Estimate (YoY) (DEC)
|
2.8%
|
3.0%
|
High
|
06 JAN
|
11:00
|
German Factory Orders (MoM) (NOV)
|
-1.8%
|
5.2%
|
Medium
|
06 JAN
|
11:00
|
German Factory Orders (YoY) (NOV)
|
-1.2%
|
5.4%
|
Medium
|
BRITISH POUND
Key Upcoming Events
DAY
|
GMT
|
EVENT
|
EXP
|
PREV
|
IMPACT
|
04 JAN
|
09:30
|
Mortgage Approvals (NOV)
|
52.5K
|
52.7K
|
Medium
|
05 JAN
|
09:30
|
PMI Services (DEC)
|
51.5
|
52.1
|
Medium
|
JAPANESE YEN
Key Upcoming Events
DAY
|
GMT
|
EVENT
|
EXP
|
PREV
|
IMPACT
|
05 JAN
|
5:00
|
Vehicle Sales (YoY) (DEC)
|
-
|
24.1%
|
Medium
|
CANADIAN DOLLAR
Key Upcoming Events
DAY
|
GMT
|
EVENT
|
EXP
|
PREV
|
IMPACT
|
05 JAN
|
15:00
|
Ivey Purchasing Managers Index (DEC)
|
54.8
|
59.9
|
Medium
|
06 JAN
|
12:00
|
Net Employment Change (DEC)
|
17.5K
|
-18.6K
|
High
|
06 JAN
|
12:00
|
Unemployment Rate (DEC)
|
7.4%
|
7.4%
|
High
|
AUSTRALIAN DOLLAR
Key Upcoming Events
DAY
|
GMT
|
EVENT
|
EXP
|
PREV
|
IMPACT
|
04 JAN
|
22:30
|
AiG Performance of Service Index (DEC)
|
-
|
47.7
|
Medium
|
05 JAN
|
00:30
|
Trade Balance (A$) (NOV)
|
1650M
|
1595M
|
Medium
|
NEW ZEALAND DOLLAR
No comments:
Post a Comment