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16 Jul 2015
Kiwi heavily offered in Asia on CPI, ECB, Yellen eyed
FXStreet (Mumbai) - Asia remained largely subdued despite the Greek leaders voting in favor of bailout reforms overnight as broad based US dollar strength backed by Yellen’s comments remained the underlying theme weighing on most G10 currencies. While weak inflation print from New Zealand knocked-off NZD/USD to fresh six-year lows near 0.65 handle.
Key headlines in Asia
Greek parliament Yes votes tally 151 to pass package
New Zealand Q2 CPI subdued, RBNZ rate cuts expected
Australia Consumer Inflation Expectation up to 3.4% in July from previous 3%
Dominating themes in Asia - centered on JPY, AUD, NZD
A low-key affair in Asia as markets continue to digest the latest Greece Parliament ‘Yes’ vote on the bailout deal and Fed Yellen’s hawkish comments in her testimony at the Capitol Hill last New York session.
The USD bulls extended their control in Asia which kept EUR/USD pressured despite renewed optimism seen around Greece after a vast majority of Greek parliamentarians decided early on Thursday to accept bailout terms. While USD/JPY faced rejection at 124 barrier, although remains supported ahead of the second round of Yellen’s testimony before the Senate Banking Committee later tonight.
The Aussie recovered from fresh six-year lows reached at 0.7355 as ground as the traders cheer rising MI inflation expectations data. The expected inflation rate reported in the Melbourne Institute Survey of Consumer Inflationary Expectations rose by 0.4 percentage points to 3.4 percent in July from 3.0 percent in June. The NZD/USD pair remains relentlessly sold-off after another soft inflation reading made next week's RBNZ rate decision almost a done deal. Moreover, Bank of Canada’s (BOC) rate cut on Wednesday made the case for RBNZ easing even firmer.
Asian markets are trading broadly higher, with China leading its Asian counterparts. The Shanghai composite index now trades nearly +1% at 3845. The Nikkei 225 in Tokyo advances 0.47%, while Australian benchmark the ASX 200 trades 0.38% higher. While South Korea’s Kospi is up 0.30%.
Heading into Europe - centered on EUR, GBP
A busy European session ahead, with European Central Bank (ECB) monetary policy meeting followed by ECB Chief Draghi’s press conference expected to be the main highlight. ECB meeting is unlikely to deliver any news concerning monetary policy. Instead of monetary policy, Greece is set to take center stage. Most interesting will be to see what Draghi speaks on ELA and how to handle bridge financing for Greece.
On the data space, Consumer prices in the euro zone will be reported, which are seen as halting their slow upward trend in June, with flat inflation growth on a monthly basis, compared to a 0.2% gain in the previous month, and with a 0.2% result expected y/y after the 0.3 gain reported a month ago. Also, Euro zone trade balance data will be published later in the session.
Meanwhile, Bank of England (BOE) Governor Mark Carney will speak in Lincoln, England, as part of the Magna Carta Lecture Series.
In the NA session, more of Fed Chair Yellen will be seen as she testifies before the Senate Banking Committee, in Washington tonight. Moreover, a batch of key US data releases will be reported including the weekly jobless claims, Philly Fed manufacturing index and NAHB Housing data.
Key headlines in Asia
Greek parliament Yes votes tally 151 to pass package
New Zealand Q2 CPI subdued, RBNZ rate cuts expected
Australia Consumer Inflation Expectation up to 3.4% in July from previous 3%
Dominating themes in Asia - centered on JPY, AUD, NZD
A low-key affair in Asia as markets continue to digest the latest Greece Parliament ‘Yes’ vote on the bailout deal and Fed Yellen’s hawkish comments in her testimony at the Capitol Hill last New York session.
The USD bulls extended their control in Asia which kept EUR/USD pressured despite renewed optimism seen around Greece after a vast majority of Greek parliamentarians decided early on Thursday to accept bailout terms. While USD/JPY faced rejection at 124 barrier, although remains supported ahead of the second round of Yellen’s testimony before the Senate Banking Committee later tonight.
The Aussie recovered from fresh six-year lows reached at 0.7355 as ground as the traders cheer rising MI inflation expectations data. The expected inflation rate reported in the Melbourne Institute Survey of Consumer Inflationary Expectations rose by 0.4 percentage points to 3.4 percent in July from 3.0 percent in June. The NZD/USD pair remains relentlessly sold-off after another soft inflation reading made next week's RBNZ rate decision almost a done deal. Moreover, Bank of Canada’s (BOC) rate cut on Wednesday made the case for RBNZ easing even firmer.
Asian markets are trading broadly higher, with China leading its Asian counterparts. The Shanghai composite index now trades nearly +1% at 3845. The Nikkei 225 in Tokyo advances 0.47%, while Australian benchmark the ASX 200 trades 0.38% higher. While South Korea’s Kospi is up 0.30%.
Heading into Europe - centered on EUR, GBP
A busy European session ahead, with European Central Bank (ECB) monetary policy meeting followed by ECB Chief Draghi’s press conference expected to be the main highlight. ECB meeting is unlikely to deliver any news concerning monetary policy. Instead of monetary policy, Greece is set to take center stage. Most interesting will be to see what Draghi speaks on ELA and how to handle bridge financing for Greece.
On the data space, Consumer prices in the euro zone will be reported, which are seen as halting their slow upward trend in June, with flat inflation growth on a monthly basis, compared to a 0.2% gain in the previous month, and with a 0.2% result expected y/y after the 0.3 gain reported a month ago. Also, Euro zone trade balance data will be published later in the session.
Meanwhile, Bank of England (BOE) Governor Mark Carney will speak in Lincoln, England, as part of the Magna Carta Lecture Series.
In the NA session, more of Fed Chair Yellen will be seen as she testifies before the Senate Banking Committee, in Washington tonight. Moreover, a batch of key US data releases will be reported including the weekly jobless claims, Philly Fed manufacturing index and NAHB Housing data.