UK Employment data, US and Canadian CPI – Next in Focus

FXStreet (Mumbai) - USD/JPY continues to trade around a flat line near 119 barrier in a rather calmer Asian trading, while the Australian dollar was the weakest followed by its Oz neighbor as jobs data led optimism faded and markets now turn to US CPI figures for fresh cues.

Key headlines in Asia

AUD/USD snaps 3-day rally, back in red below 0.78

NZD/USD: Further gains may be on the cards - FXCharts

USD/JPY remains a buy for 119.40/50 – AceTrader

Dominating themes in Asia - centered on JPY, AUD, NZD

A low key affair in Asia, with Asian equities mostly in the negative territory following weak cues on Wall Street overnight. While the US dollar continues to trade muted across the board awaiting fresh incentives from the US macro data to be released later today.

The entire Antipodean complex trades in red, with the Australian dollar underperforming its OZ counterpart as both the currencies head for a soft close to the week after the recent Australian labor data backed strength. USD/JPY trades dead flat around 119 handle, consolidating previous losses after US housing and jobs data disappointed markets.

Heading into Europe - centered on EUR, GBP

In the Europe session ahead, UK labour market report and wage growth data are expected to be the major drivers amid other 2-tier economic releases including Euro zone current account and final CPI print.

UK jobless rate is expected to have dropped further to 5.6% in the quarter to February, which would be down from 5.7% measured a month before. Jobless claims, a narrower and less distant gauge tracking labor market activity, is expected to have declined by 29,500 in March, bringing the claimant-count rate to 2.3%, down from 2.4% in February.

While, average weekly earnings excluding bonuses are expected to have risen 1.7% in February, up one percentage point from January, while the total earnings growth, including bonuses, is estimated to have slowed to 1.7%, down from 1.8%. The UK is due to be published at 8.30GMT.

Further, today’s EZ final CPI estimate for March is expected to bring more encouragement on the margins, with year-over-year headline consumer prices to show a dip of -0.1% confirming prelim estimates. EZ data is due to be published at 9GMT.

We have a busy North American session, with US and Canadian CPI print on the cards to be published at 12.30GMT. US consumer sentiment data release is expected to follow and will be released at 14GMT.

According to Westpac Global Strategy Group, “Headline US Mar CPI is expected print at 0.3%m/m, and at 0%y/y again. Core (ex food and energy) pressures are modest, and are forecast at 0.2%m/m and 1.7%y/y. We also have the preliminary Apr University of Michigan consumer sentiment.”

“Canada Mar CPI will be released, though the Bank of Canada policy was set earlier in the week. There will be a press conference following the G20 finance ministers and central bank governors meeting.”

Meanwhile, analysts at RBS believe, “The moderation in the winter data and the disappointing rebounds in both housing starts and retail sales in March puts a dent in the FOMC’s quest to gain reasonable confidence that inflation is rising over time, but stability in core inflation readings will likely be seen as a positive by the FOMC.”

For the Canadian data, RBS notes, “We see the risks to CAD data broadly as on the downside, but February retail sales tomorrow is likely due to bounce-back after significant weakness in January and February."

"Both the headline and core measures released on Bloomberg include fuel sales, and relative stability in oil prices in February may provide a significant boost to outlays on gasoline. The key variable to watch within what may be a strong bounce in retail sales is sales in volume terms, which have fallen over 1% in each of the past two months.”