Themes for the week and potential opportunities
Not much to say regarding the G7 meeting thus far. A tad of debate between Lew and Aso on the BoJ’s activity but other policymakers have been quite diplomatic.
Articles of interest:
http://www.reuters.com/article/us-g7-japan-idUSKCN0YC03O
http://www.reuters.com/article/us-g7-japan-summary-idUSKCN0YC04Y?mod=related&channelName=ousivMolt
US: less exciting week for the greenback. Fedspeak will likely be the main focus with Janet Yellen speaking at Harvard at 10.30ET Friday, and plenty of Fed speakers during the week. Q1 GDP (Fri) is likely to be revised up to 0.9% from 0.5%, but all the attention is already on the expected pick-up in Q2. Sentiment seems to be neutral from an expectations perspective, with a positive backdrop from last week.
EU: Busy week ahead. PMIs (Mon) expected to edge higher. The Ger ZEW survey (Tue) should also show improvements. The IFO (Wed) is also expected to improve. So there is a definite positive bias on the Euro going into the week. It may be better played on the crosses rather than vs. USD.
GBP: Bremain made Sterling the star of last week; Bremain/Brexit continues to be the main driver. BoE’s Carney will testify before the TSC (Tue) and could also steer public opinion. Then it’s the second estimate of Q1 GDP (Thur) expected to be revised lower.
Comm-Dolls: AUD still poised for losses while RBA keeps the market on edge. Main focus this week will be Capex (Thur) which is expected to fall, alongside speeches by RBA Governor Glenn Stevens and Assistant Governor Debelle. CAD might continue to suffer from the Alberta wild fire fall out.
Going into the week I’ll be looking for Cad and Aud shorts vs Usd, Gbp and – depending on data – Euro. I’ll be watching Gbp polls for clues on Gpb strength/weakness. Risk assets unclear thus far. Better to wait for more information.
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