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Talking Points:
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Euro Unlikely to Find Lasing Catalyst in German Factory Orders Report
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Canadian, NZ Dollars May Follow Aussie Higher on Firm Risk Appetite
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Currency markets saw a quiet open to the trading week. The Japanese Yen edged higher in a move that seemed mostly corrective after Friday’s post-NFP selloff rather than owing to a specific concurrent catalyst. The Australian Dollar likewise advanced, moving alongside Asian shares in a move that probably reflected the currency’s sensitivity to risk sentiment trends. Gains were modest at best in both cases, with Yen and Aussie adding as much as 0.2 percent each on average against the majors.
Looking ahead, a relatively quiet economic calendar in European and US trading hours is likely to keep price action muted for the time being. S&P 500 futures are pointing firmly higher, hinting a “risk on” mood may see risk-geared currencies may prove best-supported in the coming session. That bodes well for the Aussie as well as similarly risk-geared currencies including the New Zealand and Canadian Dollars.
German Factory Orders report is expected to show a 2.5% percent drop in September compared with the prior month. Eurozone news-flow has deteriorated relative to consensus forecasts over recent weeks, opening the door for a downside surprise. Such an outcome may apply selling pressure to the Euro, through follow-through is unlikely to be meaningful considering the print’s limited implications for the probability of near-term ECB stimulus expansion.
Separately, the Fed’sEsther George is scheduled to comment on the state of the US economy. The President of the central bank’s Kansas City branch typically leans on the hawkish side of the policy spectrum, suggesting her remarks are likely to prove supportive for the US Dollar. It seems unlikely that the greenback will find enough novel content there to materially extend its advance however.
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Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
| 23:00 | NZD | QV House Prices (YoY) (SEP) | 6.4% | - | 6.9% |
| 23:30 | AUD | TD Securities Inflation (YoY) (SEP) | 2.2% | - | 2.4% |
| 23:30 | AUD | TD Securities Inflation (MoM) (SEP) | 0.1% | - | 0.0% |
| 00:30 | AUD | ANZ Job Advertisements (MoM) (SEP) | 0.9% | - | 1.5% |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
| 6:00 | EUR | German Factory Orders s.a. (MoM) (AUG) | -2.5% | 4.6% | Medium |
| 6:00 | EUR | German Factory Orders n.s.a. (YoY) (AUG) | 2.6% | 4.9% | Medium |
| 7:30 | EUR | Markit Germany Construction PMI (SEP) | - | 47.7 | Low |
| 8:00 | GBP | New Car Registrations (YoY) (SEP) | - | 9.4% | Low |
| 8:10 | EUR | Markit Eurozone Retail PMI (SEP) | - | 45.8 | Medium |
| 8:10 | EUR | Markit Italy Retail PMI (SEP) | - | 40.8 | Low |
| 8:10 | EUR | Markit Germany Retail PMI (SEP) | - | 49.4 | Medium |
| 8:10 | EUR | Markit France Retail PMI (SEP) | - | 45.5 | Low |
| 8:30 | EUR | Eurozone Sentix Investor Confidence (OCT) | -11 | -9.8 | Low |
Critical Levels