Cyprus Bank Levy Vote to Overshadow German, UK Economic Data
Forex markets are likely to look past German ZEW and UK CPI data releases as all eyes turn to a Parliamentary vote on Cyprus’ EU bailout terms.
Talking Points
All Eyes on Cyprus as Parliament Votes on EU Bailout Terms
Euro, Risk-Linked Currencies to Fall if Bank Levy is Ratified
UK CPI, German ZEW Data Unlikely to Drive FX Volatility
The economic fills out with top-tier event risk in European trading hours but the fiasco in Cyprus is likely to remain central for financial markets. The island nation’s Parliament is due to vote on the terms of the controversial EU bailout deal that will impose a bank levy on deposits in Cypriot banks. Passage of the measure will set a precedent for debt crisis management that could spark bank runs in other Eurozone countries with sickly banks (notably Spain) as depositors look to safeguard their savings from potential future seizure. Fears of such an outcome stand to put the Euro under pressure. Overall risk appetite is likewise vulnerable in this scenario, threatening sentiment-geared currencies including the Canadian and Australian Dollars.
February’s UK CPI figures are expected to put the headline year-on-year inflation rate at 2.8 percent, marking an eight-month high. The result seems unlikely to offer a meaningful lift to the British Pound however given its limited implications for Bank of England monetary policy, where the dominant world-view continues to appear decidedly dovish. The March edition of the German ZEW Survey of investor confidence is expected to show a slight improvement in respondents’ assessment of the current economic landscape coupled with a narrow pullback in the forward-looking Expectations index. This too is likely to pass with little fanfare absent a wild deviation from consensus forecasts against a backdrop of more pressing Eurozone concerns.
Asia Session:
GMT | CCY | EVENT | ACT | EXP | PREV |
0:30 | AUD | RBA March Meeting Minutes | - | - | - |
2:00 | CNY | Actual FDI (YoY) (FEB) | 6.3% | -4.8% | -7.3% |
2:00 | CNY | Conference Board Leading Index (FEB) | 257.5 | - | 254.3 |
5:00 | JPY | Leading Index (JAN F) | 95.0 | - | 96.3 |
5:00 | JPY | Coincident Index (JAN F) | 91.6 | - | 92.0 |
5:30 | JPY | Nationwide Department Store Sales (YoY) (FEB) | 0.3% | - | 0.2% |
5:30 | JPY | Tokyo Department Store Sales (YoY) (FEB) | 2.5% | - | 0.5% |
Euro Session:
GMT | CCY | EVENT | EXP | PREV | IMPACT |
7:00 | EUR | EU 25 New Car Registrations (FEB) | - | -8.7% | Low |
9:30 | GBP | PPI Input n.s.a. (MoM) (FEB) | 1.5% | 1.3% | Low |
9:30 | GBP | PPI Input n.s.a. (YoY) (FEB) | 0.8% | 1.8% | Low |
9:30 | GBP | PPI Output n.s.a. (MoM) (FEB) | 0.4% | 0.2% | Low |
9:30 | GBP | PPI Output n.s.a. (YoY) (FEB) | 1.8% | 2.0% | Low |
9:30 | GBP | PPI Output Core n.s.a. (MoM) (FEB) | 0.3% | 0.2% | Medium |
9:30 | GBP | PPI Output Core n.s.a. (YoY) (FEB) | 1.1% | 1.4% | Medium |
9:30 | GBP | ONS House Prices (YoY) (JAN) | 2.4% | 3.3% | Low |
9:30 | GBP | CPI (MoM) (FEB) | 0.7% | -0.5% | High |
9:30 | GBP | CPI (YoY) (FEB) | 2.8% | 2.7% | High |
9:30 | GBP | CPI - Core (YoY) (FEB) | 2.2% | 2.3% | Medium |
9:30 | GBP | RPI (MoM) (FEB) | 0.8% | -0.4% | Low |
9:30 | GBP | RPI (YoY) (FEB) | 3.3% | 3.3% | Low |
9:30 | GBP | RPI Ex Mort Int. Payments (YoY) (FEB) | 3.2% | 3.3% | Low |
10:00 | EUR | Eurozone Construction Output (YoY) (JAN) | - | -4.8% | Low |
10:00 | EUR | Eurozone Construction Output (MoM) (JAN) | - | -1.7% | Low |
10:00 | EUR | Eurozone ZEW Survey (Econ. Sentiment) (MAR) | - | 42.4 | Medium |
10:00 | EUR | German ZEW Survey (Curr. Situation) (MAR) | 6.0 | 5.2 | High |
10:00 | EUR | German ZEW Survey (Econ. Sentiment) (MAR) | 48.1 | 48.2 | High |
16:00 | EUR | Cyprus Parliament to Vote on EU Bailout Plan | - | - | High |
Critical Levels:
CCY | SUPPORT | RESISTANCE |
EURUSD | 1.2894 | 1.3008 |
GBPUSD | 1.5058 | 1.5157 |
--- 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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