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23 May 2014
Key events on Friday - Westpac
FXStreet (Bali) - Sean Callow, FX Strategist at Westpac, walks us through the main events for the day ahead.
Key Quotes
"The Australian and NZ calendars are quiet today and also early next week. In Asia, there should be no broad impact from Apr Singapore CPI, Taiwan April IP or final Taiwan Q1 GDP. Thailand will be the main focus, with equities likely to fall after military leaders reversed their previous assurances that martial law was not a coup, confirming the coup by assuming control over political offices. All non-military TV channels have been taken from the air, a curfew announced from 10pm to 5am daily and political gatherings banned. This is a clear deterioration in Thailand’s economic outlook. The Bank of Thailand has large FX reserves so should be able to limit the decline in the baht from capital outflows but THB should be a clear underperformer in the region until further notice."
"In Germany we will see the final reading on Q1 GDP, expected to remain at 0.8% q/q but with a much weaker reading expected in Q2. The key release is the IFO survey of German business sentiment for May. The overall index is seen easing to 110.9 from 111.2, still a historically strong reading. But given the slide in the expectations component of the ZEW survey, there seem to be downside risks."
"On Sunday Ukraine votes in its presidential election and voting concludes in EU parliamentary elections, with results likely early Monday Aust/NZ. Europe-friendly businessman Poroshenko is the frontrunner in Ukraine, though he will need >50% of the vote to avoid a runoff on 15 June. Voting will of course be very difficult in the east but observers still expect turnout above 70%. Anti-EU parties are likely to enjoy substantial gains in the European Parliament, including the UK Independence Party, Holland’s Party for Freedom and the National Front in France. No major impact on EUR is likely but it isn’t helpful in the background."
"The US data calendar is limited to Apr new home sales. Mar saw a startling -14.5 m/m slide, so consensus is for a rebound of about 11%. Canada releases Apr CPI, seen 2.0% y/y headline.1.4% y/y core. This would see the headline rate hit the midpoint of the Bank of Canada target band for the first time since early 2012, but it is likely to be short-lived. The core rate is key, with the BoC likely to be on hold until deep into 2015."
Key Quotes
"The Australian and NZ calendars are quiet today and also early next week. In Asia, there should be no broad impact from Apr Singapore CPI, Taiwan April IP or final Taiwan Q1 GDP. Thailand will be the main focus, with equities likely to fall after military leaders reversed their previous assurances that martial law was not a coup, confirming the coup by assuming control over political offices. All non-military TV channels have been taken from the air, a curfew announced from 10pm to 5am daily and political gatherings banned. This is a clear deterioration in Thailand’s economic outlook. The Bank of Thailand has large FX reserves so should be able to limit the decline in the baht from capital outflows but THB should be a clear underperformer in the region until further notice."
"In Germany we will see the final reading on Q1 GDP, expected to remain at 0.8% q/q but with a much weaker reading expected in Q2. The key release is the IFO survey of German business sentiment for May. The overall index is seen easing to 110.9 from 111.2, still a historically strong reading. But given the slide in the expectations component of the ZEW survey, there seem to be downside risks."
"On Sunday Ukraine votes in its presidential election and voting concludes in EU parliamentary elections, with results likely early Monday Aust/NZ. Europe-friendly businessman Poroshenko is the frontrunner in Ukraine, though he will need >50% of the vote to avoid a runoff on 15 June. Voting will of course be very difficult in the east but observers still expect turnout above 70%. Anti-EU parties are likely to enjoy substantial gains in the European Parliament, including the UK Independence Party, Holland’s Party for Freedom and the National Front in France. No major impact on EUR is likely but it isn’t helpful in the background."
"The US data calendar is limited to Apr new home sales. Mar saw a startling -14.5 m/m slide, so consensus is for a rebound of about 11%. Canada releases Apr CPI, seen 2.0% y/y headline.1.4% y/y core. This would see the headline rate hit the midpoint of the Bank of Canada target band for the first time since early 2012, but it is likely to be short-lived. The core rate is key, with the BoC likely to be on hold until deep into 2015."