Yen Soft After GDP, UK Events Watched

Published 08/13/2014, 02:06 AM
Updated 03/09/2019, 08:30 AM
EUR/USD
-
USD/CHF
-
DX
-
ESH25
-

The forex markets are rather steady as traders await a rather eventful day. Yen stays soft after Q2 GDP report. The US Dollar struggled to extend overnight's gain and retreated ahead of near term resistance against the euro and swiss franc. Elsewhere, Asian equities are fluctuating between loss and gain and markets struggle to have a clear direction. US indices were mildly pressured yesterday but DJIA and S&P 500 both ended the day mildly lower only, paring much of earlier losses. UK will be a key focus today with job data and BoE inflation report featured. US will release retails sales.

Japan GDP contracted -1.7% qoq in Q2 versus expectation of -1.8% qoq. GDP deflator rose 2.0% yoy versus expectation of 1.6% yoy. The contraction was mainly due to weakened demand across most of the economy after the April tax hike. Looking at some details, private consumption contracted -5.0% while private residential construction contracted -10.3%. Imports of goods and services contracted -5.6%. These were among the worst performed items. The overall outlook is unchanged though as economists generally expect a rebound in Q3. Economics minister Amari said in a statement that sales of electronics goods and department store sales picked up after falling sharply in April. Also, he noted that job market was also improving steadily. He's optimistic that "Japan's economy continues to recover moderately as a trend and the effect of the sales tax hike is subsiding." The performance of Q3 then would be important for prime minister Abe to decide the timing of the next sales tax hike.

Australia Westpac consumer sentiment rose 3.8% in August wile wage cost index rose 0.6% qoq in Q2. China will release industrial production, fixed assets investments and retail sales.

BoE's quarterly inflation report for August would contain little change to the growth forecasts while the path of unemployment might be revised downwards. Another focus is on the estimates of economic slack. In May, the BoE suggested that this was between 1% and 1.5% of GDP, mainly concentrated in the labor market. We expect the estimate would be lowered as the unemployment rate has dropped steadily since then (to 6.5% from 6.9%). UK will also release employment data today. Claimant count is expected to drop -30k in July while unemployment rate is expected to drop to 6.4% in June. Also to be featured in European session are German CPI, Eurozone industrial production and Swiss ZEW.

From US, retail sales is expected to rose 0.3% in July with ex-auto sales up 0.4%. Business inventories are expected to rise 0.4% in June.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.