Euro, Top Currencies Focus On Spanish Bond Sale And Earnings Docket

By Ilya Spivak, Currency Strategist

Talking Points
  • All Eyes on Spanish Bond Auctions Amid Returning Eurozone Debt Fears
  • Traders Most Concerned with Guidance as Q1 Reporting Season Continues
  • Last Batch of US Data This Weeks Aims to Produce Risk-Supportive Cues

Eurozone debt crisis worries take center stagein European hours as traders look for the outcomes of a pair Spanish bondauctions for direction. Madrid is due to sell 2014 and2022 debt. Previous auctions of equivalent maturities drew averageyields of 2.069 and 5.403 percent for 2-year and 10-year notesrespectively. Readings north of these outcomes threaten to projectreturning funding stress in the currency bloc and stand to weigh onthe Euro and broad-based risk appetite.

The spread between yields on Spanish andbenchmark German 10-year bonds now stands at 410.2 basis points,which is 67.6bps or 2 standard deviations above its three-monthaverage. France is also on the issuance calendar, with Parisselling up to 3bn in 2018 inflation-linked bonds as well as atranche of 2014, 2015 and 2017 paper.

Later in the session, another helping of corporate earningsreports enters the spotlight, with names including Bankof America, Verizon and Microsoft on tap. Traders appear primarilyconcerned with guidance from major cycle-sensitive companies as theprimary question defining the macro environment remains the degreeto which a pickup in the US can offset a slowdown in China andrecession in the Eurozone this year.

On the US economicdata front, expectations call for a minor pullbackin the PhiladelphiaFed business confidence gauge in April while Existing HomeSales rise the most in five months while thecomposite LeadingIndicators metric gains 0.2 percent to reach the highestlevel since June 2008. Weekly joblessclaims numbers are expected to yield mixed results,with initial applications for benefits down while continuing onesadvance.

The US Dollar (ticker: USDollar ) continues to show a formidable inversecorrelation with the S&P 500, hinting a pick-up in riskappetite that sends share prices higher – whether courtesy ofearnings outcomes or the economic data set – is likely toweigh on the benchmark currency. Needless to say, the inversescenario stands to produce the opposite effect.

Asia Session : What Happened

GMT

CCY

EVENT

ACT

EXP

PREV

22:00

NZD

ANZ NZ Job Ads (MoM) (MAR)

-1.0%

-

4.6% (R-)

22:45

NZD

Consumer Prices Index (QoQ) (1Q)

0.5%

0.5%

-0.3%

22:45

NZD

Consumer Prices Index (YoY) (1Q)

1.6%

1.6%

1.8%

23:50

JPY

Merchandise Trade Balance Total (¥) (MAR)

-82.6B

-223.2B

29.4B

23:50

JPY

Adj. Merchandise Trade Balance (¥) (MAR)

-223.2B

-446.3B

-321.4B (R-)

23:50

JPY

Merchandise Trade Exports (YoY) (MAR)

5.9

0.2

-2.7

23:50

JPY

Merchandise Trade Imports (YoY) (MAR)

10.5

7.0

9.2

1:30

AUD

NAB Business Confidence (1Q)

-1

-

1

1:30

AUD

RBA FX Transaction (A$) (MAR)

944M

-

372M

E uro Session: What to Expect

GMT

CCY

EVENT

EXP

PREV

IMPACT

8:00

EUR

Italian Industrial Orders sa (MoM) (FEB)

-1.1%

-7.4%

Low

8:00

EUR

Italian Industrial Orders nsa (YoY) (FEB)

-6.2%

-5.6%

Low

8:00

EUR

Italian Industrial Sales sa (MoM) (FEB)

-

-4.9%

Low

8:00

EUR

Italian Industrial Sales nsa (YoY) (FEB)

-

-4.4%

Low

8:30

EUR

Spain to Sell 3.3% 2014 Bonds

-

-

High

8:30

EUR

Spain to Sell 5.85% 2022 Bonds

-

-

High

9:00

EUR

France to Sell €3bn I/L 2018 Bonds

-

-

Medium

9:00

EUR

France to Sell 2014-2017 bonds

-

-

Medium

Critical Levels

CCY

SUPPORT

RESISTANCE

EURUSD

1.3074

1.3157

GBPUSD

1.5931

1.6135

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya , e-mail ispivak@dailyfx.com . Follow me on Twitter at @IlyaSpivak

To be added to Ilya 's e-mail distribution list, send a note with subject line "Distribution List" to ispivak@dailyfx.com
DailyFX is the forex news and research arm of FXCM, Inc (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

Original Article: http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2012/04/19/Euro_Top_Currencies_Focus_on_Spanish_Bond_Sale_and_Earnings_Docket.html

DailyFX is the forex news and research arm of FXCM (NYSE: FXCM), which provides currency trading and brokerage services and is an advertiser on TheStreet websites. Any opinions, news, research, analyses, prices, or other information is provided as general market commentary, and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Currency trading involves significant risk of loss. Individual authors may hold positions in the currencies discussed in the article.

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