20 Jun 2014
Key events on Friday - Westpac
FXStreet (Bali) - Westpac Strategy Group reviews the day ahead, noting that today should be a fairly quiet day within Asian FX.
Key Quotes
There is minimal data out in Asia today, with just May export orders for Taiwan. We expect +7.5%yy, with lower orders from China dragging exports. The Australian calendar today and next week is empty. The next big event will be on July 1, with the RBA meeting. Retail sales on July 3 will also be interesting - warm weather has hurt winter sales, and this has been very visible in a number of earnings downgrades in the retailer sector recently.
In Europe, we have the current account and consumer confidence. Current account data is an important update on overall flows into Europe. While April data predates Draghi's recent moves, it will nonetheless give us an important update on the forces that continue to support the EUR at levels well above those which the ECB would be happy with.
With the FOMC meeting out the way and next week being light on in terms of data and event risk, today should be a fairly quiet day within Asian FX. Two themes should continue to be present however. The US$ is weaker across the board following the FOMC's downward revision of its long term 'neutral' Fed Funds projection. The other, of course, is oil prices which continue to climb as the situation in Iraq deteriorates. Brent hit a 9 month high as Obama confirmed he will send military advisers.
Our CNY forecast model suggests another modest lower fix. driven by overall weakness in the US$. The current backdrop of improving data and a weak US$ should see the market happy to sell USD/CNH on rallies. However, a cooling property market does pose a risk to this outlook. This makes next week's Markit flash China PMI Monday and the Westpac MNI China Consumer Sentiment Index on Wednesday important updates for CNY/CNH.
Key Quotes
There is minimal data out in Asia today, with just May export orders for Taiwan. We expect +7.5%yy, with lower orders from China dragging exports. The Australian calendar today and next week is empty. The next big event will be on July 1, with the RBA meeting. Retail sales on July 3 will also be interesting - warm weather has hurt winter sales, and this has been very visible in a number of earnings downgrades in the retailer sector recently.
In Europe, we have the current account and consumer confidence. Current account data is an important update on overall flows into Europe. While April data predates Draghi's recent moves, it will nonetheless give us an important update on the forces that continue to support the EUR at levels well above those which the ECB would be happy with.
With the FOMC meeting out the way and next week being light on in terms of data and event risk, today should be a fairly quiet day within Asian FX. Two themes should continue to be present however. The US$ is weaker across the board following the FOMC's downward revision of its long term 'neutral' Fed Funds projection. The other, of course, is oil prices which continue to climb as the situation in Iraq deteriorates. Brent hit a 9 month high as Obama confirmed he will send military advisers.
Our CNY forecast model suggests another modest lower fix. driven by overall weakness in the US$. The current backdrop of improving data and a weak US$ should see the market happy to sell USD/CNH on rallies. However, a cooling property market does pose a risk to this outlook. This makes next week's Markit flash China PMI Monday and the Westpac MNI China Consumer Sentiment Index on Wednesday important updates for CNY/CNH.