Yen to Extend Gains if US Consumer Confidence Disappoints

DailyFX

The Japanese Yen is likely to rise amid returning risk aversion if April’s US Consumer Confidence data falls short of economists’ expectations.

Talking Points

  • Euro Sold as Disappointing German, EZ Data Boosts ECB Rate Cut Bets
  • Yen May Rise if US Consumer Confidence Reports Falls Short of Forecasts

The Euro is narrowly underperforming in otherwise quietearly European trading hours as disappointing economic data bolsters interest rate cut expectations ahead of the ECB monetary policy announcement later in the week. April’s German Unemployment report showed the economy shed 4,000 jobs compared with a 2,000 increase expected by forecasters. Meanwhile, Eurozone CPI data unexpectedly put the year-on-year inflation rate at 1.2 percent, the lowest since February 2010.

Looking ahead, the spotlight is on US Consumer Confidence figures. Expectations call for a narrow increase to 61.0 in April compared with 59.7 in the prior month. US economic news-flow has increasingly underperformed relative to expectations since late March however, hinting analysts continue to underestimate the degree of slowdown playing out in the world’s top economy and opening the door for a downside surprise. Such an outcome may weigh on risk appetite, punishing cycle-sensitive currencies including the Australian, Canadian and New Zealand Dollars while boosting the Japanese Yen.

Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

22:45

NZD

Building Permits (MoM) (MAR)

-9.1%

2.0%

4.4%

23:01

GBP

GfK Consumer Confidence Survey (APR)

-27

-26

-26

23:15

JPY

Markit/JMMA Manufacturing PMI (APR)

51.1

-

50.4

23:30

JPY

Household Spending (YoY) (MAR)

5.2%

1.6%

0.8%

23:30

JPY

Jobless Rate (MAR)

4.1%

4.2%

4.3%

23:50

JPY

Retail Trade (YoY) (MAR)

-0.3%

0.4%

-2.2%

23:50

JPY

Retail Trade s.a. (MoM) (MAR)

-1.4%

-0.8%

1.7%

23:50

JPY

Industrial Production (MoM) (MAR P)

0.2%

0.4%

0.6%

23:50

JPY

Industrial Production (YoY) (MAR P)

-7.3%

-7.2%

-10.5%

23:50

JPY

Large Retailers' Sales (MAR)

2.4%

1.8%

-3.7%

1:00

NZD

NBNZ Business Confidence (APR)

32.3

-

34.6

1:00

NZD

ANZ Activity Outlook (APR)

30.3

-

32.4

1:30

AUD

Private Sector Credit (YoY) (MAR)

3.2%

3.2%

3.4%

1:30

AUD

Private Sector Credit (MoM) (MAR)

0.2%

0.3%

0.2%

3:00

NZD

Money Supply M3 (YoY) (MAR)

7.0%

-

6.6%

4:00

JPY

Vehicle Production (YoY) (MAR)

-16.4%

-

-15.1%

5:00

JPY

Housing Starts (YoY) (MAR)

7.3%

6.0%

3.0%

5:00

JPY

Annualized Housing Starts (MAR)

0.904M

0.890M

0.944M

5:00

JPY

Construction Orders (YoY) (MAR)

-3.4%

-

16.3%

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

6:00

EUR

German Retail Sales (MoM) (MAR)

-0.3% (A)

-0.6%

Medium

6:00

EUR

German Retail Sales (YoY) (MAR)

-2.8% (A)

-2.6%

Medium

6:00

EUR

German GfK Consumer Confidence Survey (MAY)

6.2 (A)

6.0

Low

7:00

CHF

SNB Releases Q1 Currency Holdings

-

-

Low

7:55

EUR

German Unemployment Change (APR)

4K (A)

12K

High

7:55

EUR

German Unemployment Rate s.a. (APR)

6.9% (A)

6.9%

High

8:00

EUR

Italian Unemployment Rate sa (MAR P)

11.5% (A)

11.5%

Low

8:30

GBP

Net Consumer Credit (MAR)

0.5B (A)

0.5B

Low

8:30

GBP

Net Lending Sec. on Dwellings (MAR)

0.4B (A)

0.8B

Low

8:30

GBP

Mortgage Approvals (MAR)

53.5K (A)

51.9K

Medium

8:30

GBP

M4 Money Supply (MoM) (MAR)

-0.9% (A)

-0.5%

Low

8:30

GBP

M4 Money Supply (YoY) (MAR)

0.3% (A)

0.6%

Low

8:30

GBP

M4 Ex IOFCs 3M Annualised (MAR)

4.6% (A)

3.2%

Low

9:00

EUR

Euro-Zone CPI Estimate (YoY) (APR)

1.2% (A)

1.6%

High

9:00

EUR

Euro-Zone Unemployment Rate (MAR)

12.1% (A)

12.0%

Medium

Critical Levels:

CCY

SUPPORT

RESISTANCE

EURUSD

1.2984

1.3136

GBPUSD

1.5467

1.5540

--- 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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