A busy economic calendar is likely to fuel a pickup in financial market action next week after markets emerge from the Easter holiday lull in activity.
Talking Points:
NZ Dollar Corrects Higher in Otherwise Quiet Overnight Trading Session
Thin Liquidity May Amplify Volatility on Any Unforeseen Headline Risk
Market Activity Set for a Swift Pickup on Busy Event Calendar Next Week
The New Zealand Dollar outperformed in otherwise quiet Asian trade, rising as much as 0.2 percent on average against its leading counterparts. The move did not appear to reflect the influence of a particular single catalyst. Rather, the advance likely amounted to a correction after the Kiwi trailed its major currency counterparts against the US Dollar in yesterday’s session, losing a hefty 0.6 percent and slipping below chart support.
Looking ahead, most major financial markets will remain closed for the Good Friday holiday. In fact, key exchanges in Europe as well as Hong Kong and Australia will stay shuttered through Monday. That suggests that lackluster participation may make for a quiet end to the trading week. Ebbing pre-holiday liquidity may amplify any unforeseen headline-driven volatility however, warning those traders still holding open exposure to tread cautiously in the near term.
The coming week will bring ample top-tier event risk to reignite activity. The Reserve Bank of New Zealand (RBNZ) rate decision is on tap, with traders pricing in a 97 percent probability of another 25 basis point interest rate hike. Australian CPI data is expected to put headline year-on-year inflation rate at the highest in over two years, which may boost the RBA policy outlook and drive the Aussie upward. April’s preliminary set of Eurozone PMIs are forecast to show a further slowdown in manufacturing- and service-sector activity growth, which may further stoke speculation about a forthcoming expansion of ECB stimulus.
Finally, a busy docket of US activity data will help inform bets on the continuity of the Fed’s effort to “taper” QE asset purchases. Home Sales, Durable Goods Orders and Consumer Confidence figures are in the spotlight. Economic data outcomes from the world’s largest economy showed a notable improvement relative to expectations over the past two weeks (according to data compiled by Citigroup). If that trend continues, ebbing doubt about the continued withdrawal of Fed stimulus may offer yield-based support for the US Dollar.
Critical Levels
FXCM, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials. FXCM, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FXCM, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.