Pound Eyes BOE Minutes, Fed Beige Book May Hurt Risk Trends

DailyFX

The British Pound looks to minutes from April’s BOE meeting for direction while the Fed’s Beige Book survey threatens to rekindle broad-based risk aversion.

Talking Points

  • Pound Looks to BOE Minutes to Guide Monetary Policy Expectations
  • Fed Beige Book May Rekindle Risk Aversion Around Financial Markets
  • Japanese Yen Underperforms as Asian Stock Markets Launch Rebound

UK economic news-flow is in focus European trading hours. Minutes from April’s Bank of England policy meeting headline the docket, with traders eager to see if the three doves on the rate-setting MPC committee were able to sway colleague to call for an expansion of asset purchases. This would put them within one vote of pushing through added stimulus on the 9-member policy board, an outcome that would likely weigh on the British Pound.

Against this backdrop, UK Jobless Claims are expected to remain unchanged in March. The report is unlikely to be market-moving in its own right absent a major deviation from consensus forecasts but may amplify volatility if the headline figure complements cues the BOE release.

Later in the day, the spotlight turns to the Federal Reserve Beige Book survey of regional economic conditions. Investors will look at the release in the context of growing fears about the health of the global economy that erupted into large-scale risk aversion at the start of the week. Signs of a slowdown mirroring recently disappointing US economic news-flow may reapply downward pressure on sentiment, punishing cycle-linked counterparts like the Australian, New Zealand and Canadian Dollars.

The Japanese Yen underperformed in overnight trade, down as much as 0.9 percent on average against its major counterparts, as a recovery on Asian stock exchanges put pressure on the go-to funding currency. The MSCI Asia Pacific regional benchmark equity index added 0.7 percent.

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Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

22:45

NZD

Consumer Prices Index (YoY) (1Q)

0.9%

0.9%

0.9%

22:45

NZD

Consumer Prices Index (QoQ) (1Q)

0.4%

0.5%

-0.2%

0:30

AUD

Westpac Leading Index (MoM) (FEB)

0.6%

0.4% (R+)

5:00

JPY

Consumer Confidence (MAR)

44.8

46.0

44.2 (R-)

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

6:00

EUR

EU 27 New Car Registrations (MAR)

-10.2% (A)

-10.5%

Low

8:30

GBP

Bank of England Minutes

-

-

High

8:30

GBP

Average Weekly Earnings 3M/YoY (FEB)

1.3%

1.2%

Low

8:30

GBP

Weekly Earnings ex Bonus 3M/YoY (FEB)

1.2%

1.2%

Low

8:30

GBP

Claimant Count Rate (MAR)

4.7%

4.7%

Medium

8:30

GBP

Jobless Claims Change (MAR)

0.0K

-1.5K

High

8:30

GBP

ILO Unemployment Rate (3M) (FEB)

7.8%

7.8%

Medium

8:30

GBP

Employment Change (3M/3M) (FEB)

60K

131K

Low

9:00

CHF

ZEW Survey (Expectations) (APR)

-

2.3

Medium

9:00

EUR

Euro-Zone Construction Output (MoM) (FEB)

-

-1.4%

Low

9:00

EUR

Euro-Zone Construction Output (YoY) (FEB)

-

-9.1%

Low

Critical Levels:

CCY

SUPPORT

RESISTANCE

EURUSD

1.3070

1.3244

GBPUSD

1.5232

1.5403

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

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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