Summary:

• ECB minutes could offer some clues for single currency traders
• US PPI should be eyed as the omen before CPI data scheduled for tomorrow
• NZ building permits in the limelight as the kiwi sits on the fence

Over the course of the past hours the China-related story on stopping or even halting purchases of the US bonds was by far in the spotlight. However, having this story almost denied by the Chinese government (we wrote about it more in the first post) markets’ attention ought to be paid to the macroeconomic data anew. Therefore, the EURUSD could have an important session as two crucial releases are scheduled for today. Apart from it, the NZ dollar might be more volatile after the US close when the domestic data is released.

12:30 pm BST – ECB minutes: Let us recall the the ECB’s December meeting brought new staff macroeconomic projections illustrating that the Governing Council could be short of the inflation target until 2020. That said each nuance regarding potential disputes might draw more attention of market participants and therefore impact the common currency. On the other hand one needs to be aware that the ECB is unlikely to adjust its forward guidance in a more spectacular manner in the nearest future hence details included in the minutes might deserve more attention.

1:30 pm BST – US PPI: The US dollar made a U-turn over the several past hours due to the Chinese story. After breaking a 1.20 handle on the EURUSD we came back to below 1.1950 and now it seems that the macroeconomic data could become a major driver for the greenback as traders impatiently await consumer inflation planned for Friday. Before we are offered a CPI release we will get PPI numbers which could point a direction for the tomorrow’s release. The consensus expects 3% yoy and 2.5% yoy in terms of the headline and the core gauge respectively. Once the data comes in above forecasts it could yet more prop up the US dollar possibly pushing the EURUSD below 1.19.

9:45 pm BST – NZ building permits: The NZ dollar has had a prosperous period of time recently as it’s taken advantage of the weak US dollar. As a result the NZDUSD increased ca. 4 big figures during the past month albeit the pair is already at a crossroads given a technical view. As it’s been depicted at the chart below the kiwi has already run into a critical resistance placed at 0.72 and a continued rally appears to be questionable. The upcoming hours could be conclusive for the pair as we will get inflation readings from the US. However, there will be a building permits prints in the meantime which might bring about heightened volatility on the pair given quite thin liquidity.

Central bank speakers scheduled for today:

• 8:30 pm BST – FED’s Dudley

The NZDUSD seems to be on the verge of a continued increase but a pivotal resistance line needs to be broken before bulls resume a rally. Source: xStation5