Yen Sold as Markets Digest Volatility, UK Jobless Claims on Tap

DailyFX

The Japanese Yen corrected lower as risk sentiment trends digested after yesterday’s blood-letting. S&P 500 index futures point to more of the same ahead.

Talking Points

  • Yen Sold, Aussie Recovers as Markets Digest Yesterday’s Volatility
  • S&P 500 Futures Hint Corrective Mood Likely to Carry Forward
  • UK Jobless Claims Data Unlikely to Dislodge BOE Outlook, Pound
  • Euro May Rise if Firm German CPI Weighs on ECB Stimulus Bets

Currency markets were in corrective mode in overnight trade. The Japanese Yen backtracked as traders digested the sharp 2.8 percent surge recorded over the previous 24 hours in the aftermath of a disappointing BOJ monetary policy announcement. The Australian and New Zealand Dollars outperformed having suffered most gravely amid yesterday’s risk aversion. S&P 500 futures are pointing higher in late Asian trade, hinting at more of the same ahead.

UK Jobless Claims data headlines the economic calendar in European trading hours, with expectations pointing to a 5,000 decline in May. A print in line with consensus forecasts would fall broadly in line with the 12-month trend average and is unlikely to dislodge the established Bank of England policy outlook. As such, the report’s implications for the British Pound will probably prove limited beyond near term knee-jerk volatility.

Separately, the final revision of May’s German CPI print is expected to confirm the year-on-year inflation rate at 1.5 percent, a three-month high. Correlation studies point to relative monetary policy studies as the primary driver of the Euro at this point, which means an upward revision may prove supportive for the single currency as bets on a near-term expansion of ECB stimulus efforts are scattered. Needless to say, a downside surprise stands to produce the opposite result.

Capitalize on Shifts in Market Mood with the DailyFX Speculative Sentiment Index

Asia Session:

GMT

CCY

EVENT

ACT

EXP

PREV

22:45

NZD

NZ Card Spending – Retail (MAY)

0.5%

0.5%

0.6%

22:45

NZD

NZ Card Spending (MoM) (MAY)

0.6%

-

1.1%

23:50

JPY

Loans & Discounts Corp (YoY) (APR)

1.41%

-

1.47%

23:50

JPY

Machine Orders (MoM) (APR)

-8.8%

-8.1%

14.2%

23:50

JPY

Machine Orders (YoY) (APR)

-1.1%

-4.3%

2.4%

23:50

JPY

Domestic CGPI (MoM) (MAY)

0.1%

0.2%

0.3%

23:50

JPY

Domestic CGPI (YoY) (MAY)

0.6%

0.6%

0.0%

0:30

AUD

Westpac Consumer Confidence Index (JUN)

102.2

-

97.6

0:30

AUD

Westpac Consumer Confidence (JUN)

4.7%

-

-7.0%

1:30

AUD

RBA Credit Card Balances (A$) (APR)

49.4B

-

49.7B

1:30

AUD

RBA Credit Card Purchases (A$) (APR)

21.6B

-

20.2B

5:00

JPY

BOJ Monthly Economic Report (JUN)

-

-

-

Euro Session:

GMT

CCY

EVENT

EXP/ACT

PREV

IMPACT

6:00

EUR

German CPI (YoY) (MAY F)

1.5%

1.5%

Medium

6:00

EUR

German CPI (MoM) (MAY F)

0.4%

0.4%

Medium

6:00

EUR

German CPI - EU Harmonised (MoM) (MAY F)

0.3%

0.3%

Low

6:00

EUR

German CPI - EU Harmonised (YoY) (MAY F)

1.7%

1.7%

Low

8:30

GBP

Claimant Count Rate (MAY)

4.5%

4.5%

Medium

8:30

GBP

Jobless Claims Change (MAY)

-5.0K

-7.3K

High

8:30

GBP

Average Weekly Earnings (3M/YoY) (APR)

0.2%

0.4%

Low

8:30

GBP

Weekly Earnings ex Bonus (3M/YoY) (APR)

0.8%

0.8%

Low

8:30

GBP

ILO Unemployment Rate (3M) (APR)

7.8%

7.8%

Medium

8:30

GBP

Employment Change (3M/3M) (APR)

-11K

-43K

Low

9:00

EUR

Euro-Zone Industrial Production (MoM) (APR)

0.0%

1.0%

Medium

9:00

EUR

Euro-Zone Industrial Production (YoY) (APR)

-1.2%

-1.7%

Medium

Critical Levels:

CCY

SUPPORT

RESISTANCE

EURUSD

1.3258

1.3344

GBPUSD

1.5560

1.5692

--- 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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