Markets

Pound May Ignore UK CPI Data as Euro Falls on German ZEW Miss

DailyFX.com -

Talking Points:

  • British Pound may ignore UK CPI gain on limited BOE impact
  • Euro may fall if German ZEW survey falls short of expectations
  • Aussie, NZ Dollars fall as S&P 500 futures hint at risk aversion

UK CPI data headlines the economic calendar in European trading hours. The headline year-on-year inflation rate is expected to rise to 0.7 percent, the highest in almost two years. The Bank of England has unambiguously stated that it expects and intends to look through a sharp rise in price growth after the post-Brexit vote slide in the British Pound .

With that in mind, the pickup due to be reported today ought to mean relatively little for the near-term trajectory of monetary policy. By extension, significant follow-through from Sterling following the release seems unlikely.

Elsewhere on the docket, German ZEW survey of analyst sentiment will cross the wires. Confidence is expected to improve for a second consecutive month having plunged in the wake of the UK EU membership referendum. German economic news-flow has increasingly deteriorated relative to consensus forecasts over the past month however, opening the door for a downside surprise that may weigh on the Euro .

The Australian and New Zealand Dollar s underperformed in overnight trade, tracking lower alongside S&P 500 futures. Asian bourses played catch-up to yesterday's rebound on Wall Street in the wake of dovish comments from Fed Governor Brainard . Contracts tracking the US benchmark index appeared to be looking ahead however, with a degree of risk aversion seeming to resurface and pulling the sentiment-linked commodity currencies lower in the process.

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Asia Session

GMT CCY EVENT ACT EXP PREV
22:30 AUD RBA's Kent Speech at Bloomberg Sydney - - -
22:45 NZD Food Prices (MoM) (AUG) 1.3% - -0.2%
23:30 AUD Weekly Consumer Confidence Index (SEP 11) 118.1 - 114.3
23:50 JPY BSI Large All Industry (QoQ) (3Q) 1.9 - -7.9
23:50 JPY BSI Large Manufacturing (QoQ) (3Q) 2.9 - -11.1
01:30 AUD NAB Business Conditions (AUG) 7 - 9
01:30 AUD NAB Business Confidence (AUG) 6 - 4
02:00 CNY Industrial Production (YoY) (AUG) 6.3% 6.2% 6.0%
02:00 CNY Industrial Production YTD (YoY) (AUG) 6.0% 6.0% 6.0%
02:00 CNY Retail Sales (YoY) (AUG) 10.6% 10.2% 10.2%
02:00 CNY Retail Sales YTD (YoY) (AUG) 10.3% 10.3% 10.3%
02:00 CNY Fixed Assets Ex Rural YTD (YoY) (AUG) 8.1% 7.9% 8.1%

European Session

GMT CCY EVENT EXP PREV IMPACT
06:00 EUR German CPI (MoM) (AUG F) 0.0% 0.0% Medium
06:00 EUR German CPI (YoY) (AUG F) 0.4% 0.4% Medium
06:00 EUR German WPI (MoM) (AUG) - 0.2% Low
06:00 EUR German WPI (YoY) (AUG) - -1.4% Low
07:15 CHF Producer & Import Prices (MoM) (AUG) -0.2% -0.1% Medium
07:15 CHF Producer & Import Prices (YoY) (AUG) -0.3% -0.8% Medium
08:30 GBP CPI (MoM) (AUG) 0.4% -0.1% High
08:30 GBP CPI (YoY) (AUG) 0.7% 0.6% High
08:30 GBP CPI Core (YoY) (AUG) 1.4% 1.3% High
08:30 GBP RPI (MoM) (AUG) 0.4% 0.1% Medium
08:30 GBP RPI (YoY) (AUG) 1.8% 1.9% Medium
08:30 GBP RPI Ex Mort Int. Payments (YoY) (AUG) 1.9% 1.9% Low
08:30 GBP PPI Input NSA (MoM) (AUG) 0.6% 3.3% Low
08:30 GBP PPI Input NSA (YoY) (AUG) 8.2% 4.3% Low
08:30 GBP PPI Output NSA (MoM) (AUG) 0.3% 0.3% Medium
08:30 GBP PPI Output NSA (YoY) (AUG) 1.0% 0.3% Medium
08:30 GBP PPI Output Core NSA (MoM) (AUG) 0.2% 0.4% Low
08:30 GBP PPI Output Core NSA (YoY) (AUG) 1.3% 1.0% Low
08:30 GBP House Price Index (YoY) (JUL) - 8.7% Low
09:00 EUR Eurozone Employment (QoQ) (2Q) - 0.3% Low
09:00 EUR Eurozone Employment (YoY) (2Q) - 1.4% Low
09:00 EUR German ZEW Survey Current Situation (SEP) 56.0 57.6 Medium
09:00 EUR German ZEW Survey Expectations (SEP) 2.5 0.5 Medium
09:00 EUR Eurozone ZEW Survey Expectations (SEP) - 4.6 Medium
09:40 GBP BOE ILTR Operation Results - - Low

Critical Levels

CCY Supp 3 Supp 2 Supp 1 Pivot Point Res 1 Res 2 Res 3
EUR/USD 1.1124 1.1181 1.1208 1.1238 1.1265 1.1295 1.1352
GBP/USD 1.3085 1.3196 1.3266 1.3307 1.3377 1.3418 1.3529

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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