By Alfonso Esparza
The Japanese yen continues to make inroads against the US dollar, as the pair trades in the mid–101 range in Friday trading. There is growing tension in the markets over the crisis in the Ukraine, with a referendum over Crimea scheduled for Sunday. The turmoil has triggered a flight to safety in most asset classes and the FX market is no exception. The yen is appreciating against the US dollar creating a headache for the BoJ and an Abe government still struggling to create sustainable growth.
On the release front, US Unemployment Claims looked sharp, while Retail Sales met expectations. In the US, key events are PPI and Preliminary UoM Consumer Sentiment both disappointed. Producers reported a lower index, which does not bode well for US CPI numbers as the figures are highly correlated. Over in Japan, the BOJ released minutes of its last policy meeting, with policymakers saying the country’s economy is on track. The sole Japanese release on Friday, Revised Industrial Production, came within market expectations.
Next week central banks around the world will hold center court. Bank of Japan governor will speak on Wednesday ahead of Thursday’s FOMC. There is little expectation of direct actions but the market has been warned about the Fed modifying its forward guidance significantly in the coming meetings to reduce the focus on Non-farm payrolls and the unemployment rate headline number.
* EUR German ZEW Economic Sentiment
* EUR eurozone Consumer Price Index
* USD Consumer Price Index
* CAD BOC Governor Poloz Speaks
* GBP BOE Governor Carney Speaks
* JPY BOJ Governor Kuroda Speaks
* USD Consumer Price Index Ex Food & Energy
* USD Federal Open Market Committee Rate Decision
* USD Fed's Yellen Holds Speaks
* NZD Gross Domestic Product
* CHF Swiss National Bank Rate Decision
* CAD Consumer Price Index