Swiss CPI Set To Fall Again
Subdued trading in Asia meant EURUSD was confined to a 25-pip range. The price action in USDJPY and AUDUSD was somewhat more lively but flows were light across the board in pre-holiday trade. Newswires would have been mostly silent were it not for Japan’s Finance Minister Azumi defending his intervention policy. He said that even if there were differences of opinion with the US on yen intervention, this would not affect Japan’s stance. Meanwhile the shift in FOMC opinion continues. San Francisco Fed President Williams – traditionally a notable dove – conceded that the argument for a new dose of monetary stimulus is not that strong now. Having said that, he still thinks it is “essential that we keep strong monetary stimulus in place” but was also keen to emphasise that “our unusually stimulative monetary policy won’t last forever”. Asian equity markets were mixed, and did not seemly overly perturbed by yesterday’s sell-off in Europe. Today’s Swiss CPI number has the potential to make headlines – our Switzerland economist expects the lowest annualized reading since Bloomberg records began in 1971. German and the UK industrial output figures are due too. The BoE also delivers its latest policy verdict – our UK economist is in line with consensus opinion and expects no change to policy settings despite two dovish dissenters emerging at the March meeting. In the US, the focus will remain on the labour market. Wednesday’s in-line ADP release on bodes well for Friday’s payrolls number, while markets are expecting a slight rise today in initial jobless claims. Canada’s employment report will be out too, and a strong performance in full-time hiring would help CAD continue its advance on the crosses.
Click here to read the full report: UBS Morning Adviser Europe
UBS Investment Bank