The Euro may fall as borrowing costs rise at an Italian bond auction while the British Pound is under pressure before the release of revised fourth-quarter GDP data.
Talking Points
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Euro to Fall on Strong Pickup in Italian Borrowing Costs at Bond Auction
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British Pound Under Pressure Before Revised Fourth-Quarter GDP Data
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Japanese Yen Resumes Rebound as Nikkei Sinks, Boosting Haven Demand
Italy remains in focus as Rome prepares to sell €6.5 billion in 5- and 10-year bonds. Traders will keep a close eye on average yield and bid-to-cover readings, with a marked pickup in borrowing costs and/or a drop in demand likely to be seen as signs of rising sovereign risk amid political uncertainty in the wake of the weekend’s election. Needless to say, such an outcome bodes ill for the Euro.
The British Pound underperformed overnight – losing as much as 0.4 percent – as markets awaited revised fourth-quarter UK GDP figures. Expectations call for confirmation of the initially estimated 0.3 contraction. A downgrade may amplify selling pressure as traders build bets on further expansion of BOE stimulus. We continue to hold short GBPUSD.
Meanwhile, the Japanese Yen edged higher, adding as much as 0.5 percent on average against its leading counterparts. The move appeared to reflect regional safe-haven demand as the Nikkei benchmark stock index sank for a second day, sliding 1.3 percent.
Asia Session:
| GMT | CCY | EVENT | ACT | EXP | PREV |
| 21:45 | NZD | Net Migration s.a. (JAN) | 350 | - | -80 (R-) |
| 21:45 | NZD | Trade Balance (NZ$) (JAN) | - | 125M | 486M |
| 21:45 | NZD | Exports (NZ$) (JAN) | 3.35B | 3.60B | 4.10B |
| 21:45 | NZD | Imports (NZ$) (JAN) | 3.65B | 3.50B | 3.57B |
| 21:45 | NZD | Trade Balance YTD (NZ$) (JAN) | -1299M | -897M | -1156M |
| 23:50 | JPY | Retail Trade (MoM) (JAN) | 2.3% | 0.9% | 0.0% |
| 23:50 | JPY | Retail Trade (YoY) (JAN) | -1.1% | -1.5% | 0.3% |
| 23:50 | JPY | Large Retailers' Sales (JAN) | -3.5% | -0.8% | 0.1% |
| 0:30 | AUD | Construction Work Done (4Q) | -0.1% | 1.5% | 1.9% |
Euro Session:
| GMT | CCY | EVENT | EXP | PREV | IMPACT |
| 7:00 | EUR | German Import Price Index (MoM) (JAN) | 0.5% | -0.5% | Low |
| 7:00 | EUR | German Import Price Index (YoY) (JAN) | -0.4% | 0.3% | Low |
| 7:00 | CHF | UBS Consumption Indicator (JNA) | - | 1.34 | Medium |
| 7:00 | EUR | German GfK Consumer Confidence Survey (MAR) | 5.9 | 5.8 | Medium |
| 8:00 | CHF | KOF Swiss Leading Indicator (FEB) | 1.00 | 1.05 | Medium |
| 9:00 | EUR | Euro-Zone M3 s.a. (YoY) (JAN) | 3.2% | 3.3% | Low |
| 9:30 | GBP | Gross Domestic Product (QoQ) (4Q P) | -0.3% | -0.3% | High |
| 9:30 | GBP | Gross Domestic Product (YoY) (4Q P) | 0.0% | 0.0% | High |
| 9:30 | GBP | Private Consumption (4Q P) | -0.1% | 0.4% | Low |
| 9:30 | GBP | Government Spending (4Q P) | 0.1% | 0.8% | Low |
| 9:30 | GBP | Gross Fixed Capital Formation (4Q P) | 0.2% | -0.2% | Low |
| 9:30 | GBP | Exports (4Q P) | -0.8% | 1.2% | Low |
| 9:30 | GBP | Imports (4Q P) | 0.0% | -0.4% | Low |
| 9:30 | GBP | Total Business Investment (QoQ) (4Q P) | - | 3.8% | Low |
| 9:30 | GBP | Total Business Investment (YoY) (4Q P) | - | 5.1% | Low |
| 9:30 | GBP | Index of Services (MoM) (DEC) | 0.0% | 0.0% | Low |
| 9:30 | GBP | Index of Services (3M/3M) (DEC) | 0.1% | 0.6% | Low |
| 10:00 | EUR | Italy to Sell €6.5B in 5yr and 10yr Bonds | - | - | High |
| 10:00 | EUR | Euro-Zone Economic Confidence (FEB) | 89.9 | 89.2 | Low |
| 10:00 | EUR | Euro-Zone Business Climate Indicator (FEB) | -1.02 | -1.09 | Low |
| 10:00 | EUR | Euro-Zone Industrial Confidence (FEB) | -13.1 | -13.9 | Low |
| 10:00 | EUR | Euro-Zone Consumer Confidence (FEB F) | -23.6 | -23.6 | Medium |
| 10:00 | EUR | Euro-Zone Services Confidence (FEB) | -8.8 | -8.8 | Low |
Critical Levels: