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FX Today: Antipodeans rescued by strong China data; focus on UK/ Eurozone CPI

Dhwani Mehta FXStreet

Forex today witnessed a volatile Asian session this Wednesday, with key macro news from across the Asia-pac regions offering fresh trading incentives. A miss on New Zealand’s Q1 CPI figures dumped the Kiwi to 0.6670 region but the bulls were rescued by a huge beat on the Chinese industrial production numbers and steady GDP data, taking the rates back towards 0.6740 levels. The Aussie also caught a fresh bid-wave following upbeat Chinese data dump and jumped to fresh eight-week highs ahead of the 0.72 handle. But the Antipodeans lacked upside follow-through, in the wake of the recent dovish tilt by the RBA and RBNZ.

Meanwhile, the USD/JPY pair spiked to fresh 2019 highs at 112.17 and from there quickly reversed below the 112 handle, as mixed sentiment on the Asian equity markets and broad-based US dollar weakness kept the bulls unmotivated. The EUR/USD pair regained the 1.13 handle, partly tracking the bounce in gold prices while the Cable jumped back on the 1.3050 barrier, despite slightly positive Treasury yields and US equity futures.

The Canadian dollar recovered some ground after the USD/CAD pair jumped to 1.3372 highs, possibly due to the United Conservatives projected to win in the Canadian Alberta province and higher oil prices.

Main Topics in Asia

Japanese Ecomin Motegi: A good start to trade discussions with the U.S

Spain’s Socialists seen winning April 28 election with 31.3% of vote, falling short of majority – GAD3 Poll

NZ CPI: Arrives as a miss at 0.1% Q/Q and a miss Y/Y at 1.5%

Statement From USTR on U.S./Japan trade agreement

BoJ’s Amamiya speaking in Parliament – RTRS

USD/IDR: Flat lined below 14,100, voting begins in Indonesia Presidential Elections

China’s GDP steadies at +6.4% y/y in Q1, industrial output jumps 8.5% y/y (Aussie bounces)

New Zealand PM Arden rules out a tax on capital gains

Canadian Alberta Province Election: United Conservative party projected to win - CTV

BHP cuts iron ore production outlook, will it help boost iron-ore prices, Aussie?

RBNZ inflation data steadies at 1.7% y/y in Q1 2019

Fitch: New Zealand’s high household debt a key risk, but its stable

WTI targets $64.80 on China data, EIA report in the spotlight

Key Focus Ahead

There are plenty of event risks in the European session ahead, with the UK and Eurozone inflation the main highlights. The UK CPI report is due on the cards at 0830 GMT and the headline CPI rate is expected to accelerate 2.0% y/y in March vs. 1.9% previous. The upbeat data could trigger a fresh bullish run in the GBP/USD pair. Ahead of the UK data, the Eurozone current account data is due at 0800 GMT. Next of relevance is the Eurozone final CPI and trade figures slated for release parallelly at 0900 GMT. The core figures are likely to drop sharply in the reported month.

The NA session is also likely to be an eventful one, with the US and Canadian trade figures lined up for release at 1230 GMT. At the same time, the Canadian CPI figures will also be reported. Also, of note remains the US EIA weekly crude supply report due at 1430 GMT.

Apart from the macro news, the speeches from the following central bankers will hog the limelight.

1300 GMT: BOE Governor Carney.

1430 GMT: ECB’s Lautenschlaeger.

1645 GMT: Fed’s Bullard.

EUR/USD back above 1.13, focus on Eurozone inflation and trade numbers

EUR/USD jumped to 1.13, possibly on the back of upbeat China macro data and could rise further toward the 100-day moving average (MA) resistance at 1.1342 if the Eurozone inflation and trade numbers, due later today, beat estimates.

GBP/USD: Recovery towards 1.3100 on its way ahead of UK CPI

GBP/USD recovers from a nine-week-old ascending trend-line as it trades near 1.3055 ahead of the London open on Wednesday. Absence of negative Brexit news reports and support from data front seemed to have played their roles while traders await the UK CPI numbers.

UK inflation preview: Can a second positive piece of data lift GBP/USD?

The UK publishes its inflation report on Wednesday, April 17th, at 8:30 GMT. The headline Consumer Price Index (CPI) stood at 1.9% YoY in February, just below the Bank of England's 2% target.

Gold off 3.5-month lows, but bias remains bearish

The bounce from 3.5-month lows may be extended further to $1,281 (April 4 low), as the 4-hour chart relative strength index (RSI) is reporting oversold conditions with a below-30 reading at press time.

GMT	Event	Consensus	Previous
Wednesday, Apr 17
04:30	JPY Industrial Production (MoM)	1.4%	1.4%
04:30	JPY Industrial Production (YoY)	-1%	-1%
04:30	JPY Capacity Utilization	-0.4%	-4.7%
08:00	EUR Current Account n.s.a	€17.2B	€9.3B
08:00	EUR Current Account s.a	€30.3B	€37.0B
08:30	GBP Retail Price Index (MoM)	0.2%	0.7%
08:30	GBP Retail Price Index (YoY)	2.1%	2.5%
08:30	GBP PPI Core Output (YoY) n.s.a	2.2%	2.2%
08:30	GBP Producer Price Index - Input (MoM) n.s.a	0.3%	0.6%
08:30	GBP Producer Price Index - Input (YoY) n.s.a	3.9%	3.7%
08:30	GBP Producer Price Index - Output (MoM) n.s.a	0.2%	0.1%
08:30	GBP Producer Price Index - Output (YoY) n.s.a	2.1%	2.2%
08:30	GBP PPI Core Output (MoM) n.s.a	0.1%	0.1%
08:30	GBP Consumer Price Index (YoY)	2.0%	1.9%
08:30	GBP Core Consumer Price Index (YoY)	1.9%	1.8%
08:30	GBP Consumer Price Index (MoM)	0.3%	0.5%
09:00	EUR Trade Balance n.s.a.	€12.3B	€1.5B
09:00	EUR Trade Balance s.a.	€14.7B	€17.0B
09:00	EUR Consumer Price Index - Core (YoY)	0.8%	0.8%
09:00	EUR Consumer Price Index (MoM)	1.0%	0.3%
09:00	EUR Consumer Price Index - Core (MoM)	0.3%	1.3% Revised from 0.3%
09:00	EUR Consumer Price Index (YoY)	1.4%	1.4%
09:40	EUR 30-y Bond Auction		0.74%
11:00	USD MBA Mortgage Applications		-5.6%
12:30	USD Trade Balance	$-53.7B	$-51.1B

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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