China data led the way for markets overnight, with lower than expect GDP and Industrial Production numbers sparking new speculation that the Peoples Bank of China may increase its stimulus package, which resulted in Asian shares finishing up in the session despite the worse than expect numbers.
The kiwi sees the GDT Price Index being released later today (previously -1.6%), which is the change in the price of dairy products being sold at auction. Traders will watch this number as New Zealand is a net exporter of dairy and any fluctuations in the price will lead to a change in the trade balance and subsequently the exchange rate. We also see the CPI q/q, expected at -0.2%, being released.
BOE`s Vlieghe spoke yesterday, stating that the BOE is still some way from hiking rates as he cited sticky wages and unstable growth as the main factors for delay. The dovish comments where not enough for the GBP to print new multi-year lows but instead saw the GBP gain across the board as investors positioned themselves for today’s all important inflation data.
Today’s UK data is as follows:
- CPI y/y expected at 0.1%
- PPI Input m/m expected at -1.4%
- RPI y/y expected at 1%
The figures will be scrutinized, with better than expect numbers expected to see the GBP gain as it retraces its recent losses. Worse than expected numbers will see stops being triggered to the down side as the Pound is sold aggressively.
The EUR was rather stagnant yesterday as there was no news to fuel any significant move in the single unite currency. Today sees the EU releasing some important figures which markets will be looking at as they try to predict any actions the ECB will be announcing at the ECB conference on Thursday.
Today’s data out of the EU is as follows:
- German ZEW Economic Sentiment expected at 8.2
- Final CPI y/y expected at 0.2%
- ZEW Economic Sentiment expected at 27.9
- Final Core CPI y/y expected at 0.9%
Better than expected figures will see the EUR gain strength across the board and bulls will look to see if they can recapture the 1.0900 handle, else bears will be sure to reach for the 1.0800 handle.