FX Markets Turn to US CPI & Retail Sales, Kiwi GDP, SNB Rate Decision

Talking Points:

– The US Dollar slipped after a Feb NFP report, sketch into doubt how heated acceleration pressures indeed are; a Feb CPI news will gleam light onto this subject on Tuesday.

– Now that a Bank of Japan has signaled a intensity timeline to finish a unusual easing measures, will a Swiss National Bank take a layer of a world’s many dovish executive bank?

Retail merchant positioning stays churned as measures of attraction continue to stay elevated.

Join me on Mondays during 7:30 EST/12:30 GMT for a FX Week Ahead webinar, where we plead tip eventuality risk over a entrance days and strategies for trade FX markets around a events listed below.

03/13 Tuesday | 13:30 GMT | USD Consumer Price Index (FEB)

According to a Bloomberg News survey, US consumer prices continued to stand in February, albeit during a slower gait than before months. The title is due in during +0.1% from +0.5% (m/m) and +2.2% from +2.1% (y/y). The core readings should be similar, during +0.2% from +0.3% (m/m), and during +1.8% unch (y/y). These total aggregately have started to solid nearby a Fed’s medium-term target, adding justification to an already-convinced marketplace that a Fed will travel rates in March (100% pragmatic luck per overnight index swaps). Considering a attraction a greenback has had to salary expansion total – implicitly, cost pressures – the US CPI news on Wednesday could be a many critical information recover of a week for a US Dollar. Expect a US Dollar to follow US Treasury yields around a data.

Pairs to Watch: EUR/USD, USD/JPY, DXY Index, Gold

03/13 Tuesday | 14:30 GMT | CAD BOC Governor Poloz Speech

Bank of Canada Governor Stephen Poloz’s debate is in concentration given all a play surrounding a Canadian Dollar. At their assembly in a initial full week of March, a BOC done transparent a perplexity to lift rates again in a initial half of 2018 interjection to a ongoing doubt surrounding a NAFTA renegotiations. That said, Canadian information has strike a soothing patch in new weeks, with a Citi Economic Surprise Index down to -36.4. So while a doubt around NAFTA competence be a accessible cover for a BOC to palliate off of a hawkish disposition (May rate travel contingency have depressed from nearby 80% during a start of Feb to 55% on Mar 9), other factors competence now be entrance into play.

Pairs to Watch: CAD/JPY, USD/CAD, Crude Oil

03/14 Wednesday | 13:30 GMT | USD Advance Retail Sales (FEB)

Consumption is a many critical partial of a US economy, generating scarcely 70% of a title GDP figure. The best monthly discernment we have into expenditure trends in a US competence arguably be a Advance Retail Sales report. In February, according to a Bloomberg News survey, expenditure rebounded with a title Advance Retail Sales due in during +0.4% from -0.3% (m/m). The Retail Sales Control Group, a submit used to calculate GDP, is due in during +0.2% from +0.0% (m/m).

FX Markets Turn to US CPI amp; Retail Sales, Kiwi GDP, SNB Rate Decision

Based on a information perceived so distant about Q1’18, a Atlanta Fed GDPNow predict is looking for expansion nearby +4%. The subsequent refurbish to a Q1’18 predict will be expelled after Wednesday’s US mercantile data.

Pairs to Watch: EUR/USD, USD/JPY, DXY Index, Gold

03/14 Wednesday | 21:45 GMT | NZD Gross Domestic Product (Q4’17)

New Zealand expansion information comes into concentration this week, imprinting one of a few information releases from New Zealand that truly pull seductiveness from over internal marketplace participants (the others being a quarterly CPI news and a Reserve Bank of New Zealand rate decisions). Given that a Citi Economic Surprise Index for New Zealand sealed out Q4’17 during +29.1, it stands to reason that a Q4 expansion total will come in above a before rate seen in Q3. The accord predict gathered by Bloomberg News sees expansion due in during +3.1%, adult from +2.7% previously. In an sourroundings where risk currencies have recovered a bit of belligerent in line with tellurian equity markets rallying, a clever expansion reading should yield serve service to a recently beleaguered New Zealand Dollar.

Pairs to Watch: AUD/NZD, NZD/JPY, NZD/USD

03/15 Thursday | 13:30 GMT | CHF Swiss National Bank Rate Decision

In any other week, a Swiss National Bank rate preference would go neglected interjection to a jam-packed mercantile docket. But as time moves by a ides of March, a tellurian mercantile calendar is surprisingly sparse, boring brazen a SNB preference into a pantheon of tip events over a entrance days. It stands to reason that a SNB is now a many dovish executive bank in a grown world, now that a Bank of Japan has signaled a intensity finish to a unusual easing measures around mercantile year 2019 (April subsequent year).

Accordingly, while a expectations for this rate preference are singular – indeed, a Bloomberg News accord predict doesn’t predict any change in their pivotal rates – we’ll be keenly looking for any pointed change in position now that a European Central Bank has forsaken their oath to boost QE in a destiny (the SNB has mirrored a ECB given a Global Financial Crisis).

Pairs to Watch: EUR/CHF, GBP/CHF, USD/CHF

Read more: The Impact of Tariffs and Trade Wars on a US Economy and a Dollar


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— Written by Christopher Vecchio, CFA, Senior Currency Strategist

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