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Talking Points:

  • German CPI Revision Unlikely to Drive Significant Euro Volatility
  • US Dollar Looking for Renewed Strength in PPI, UofM Releases
  • New Zealand Dollar Corrects Lower After RBNZ-Inspired Advance

The final revision of May’s German CPI data set headlines a relatively quiet European economic calendar. The headline year-on-year inflation rate is expected to be confirmed at 0.9 percent, in line with flash estimates. While that puts price growth at the lowest pace in over four years, the release’s market-moving potential may be limited absent a meaningful deviation from forecasts considering deflation threats have already produced an expansion of ECB stimulus at last week’s policy meeting. It is worth noting that German inflation data has tended to disappoint relative to expectations in the last 11 months however, opening the door for a Euro-negative result.

Later in the day, the spotlight turns to US economic data, with May’s PPI data and the preliminary estimate of June’s University of Michigan Consumer Confidence reading on tap. Improvements are expected on both fronts, which may help scatter doubts about the continuity of Fed policy normalization and boost the US Dollar. News-flow from the world’s largest economy has broadly improved relative to consensus forecasts since early April but a string of disappointing releases over the past three weeks have weighed on the greenback, putting its multi-year uptrend in jeopardy.

The New Zealand Dollar underperformed in overnight trade, sliding as much as 0.3 percent on average against its leading counterparts. The move appears to be corrective as markets digest yesterday’s dramatic rally in the aftermath of a hawkish RBNZ policy announcement.

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Asia Session

GMT

CCY

EVENT

ACT

EXP

PREV

22:30

NZD

BusinesNZ Perf. of Manuf. Index (MAY)

52.7

-

54.4

22:45

NZD

Food Prices (MoM) (MAY)

0.6%

-

0.6%

2:41

JPY

BOJ 2014 Monetary Base Target

¥270T

¥270T

¥270T

3:00

NZD

Non Resident Bond Holdings (MAY)

64.6%

-

63.3%

4:30

JPY

Industrial Production (MoM) (APR F)

-2.8%

-

-2.5%

4:30

JPY

Industrial Production (YoY) (APR F)

3.8%

-

4.1%

4:30

JPY

Capacity Utilization (MoM) (APR)

-2.2%

-

0.4%

5:30

CNY

Fixed Assets Ex Rural YTD (YoY) (MAY)

17.1%

17.3%

5:30

CNY

Retail Sales YTD (YoY) (MAY)

12.0%

12.0%

5:30

CNY

Retail Sales (YoY) (MAY)

12.2%

11.9%

5:30

CNY

Industrial Production YTD (YoY) (MAY)

8.7%

8.7%

5:30

CNY

Industrial Production (YoY) (MAY)

8.8%

8.7%

European Session

GMT

CCY

EVENT

EXP

PREV

IMPACT

6:00

EUR

German CPI (MoM) (MAY F)

-0.1%

-0.1%

Medium

6:00

EUR

German CPI (YoY) (MAY F)

0.9%

0.9%

Medium

6:00

EUR

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

-0.3%

-0.3%

Medium

6:00

EUR

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

0.6%

0.6%

Medium

7:00

CHF

KOF Institute Summer Economic Forecast

-

-

Low

8:00

EUR

Italian CPI - EU Harmonized (YoY) (MAY F)

0.4%

0.4%

Low

8:30

GBP

Construction Output SA (MoM) (APR)

1.5%

-1.0%

Low

8:30

GBP

Construction Output SA (YoY) (APR)

2.9%

6.4%

Low

9:00

EUR

Euro-Zone Trade Balance s.a. (€) (APR)

-

15.2B

Low

9:00

EUR

Euro-Zone Trade Balance (€) (APR)

16.3B

17.1B

Low

9:00

EUR

Euro-Zone Employment (QoQ) (1Q)

-

0.1%

Low

9:00

EUR

Euro-Zone Employment (YoY) (1Q)

-

-0.5%

Low

Critical Levels

CCY

Supp 3

Supp 2

Supp 1

Pivot Point

Res 1

Res 2

Res 3

EUR/USD

1.3425

1.3485

1.3519

1.3545

1.3579

1.3605

1.3665

GBP/USD

1.6592

1.6737

1.6833

1.6882

1.6978

1.7027

1.7172

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