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EUR/JPY Fundamental Forecast – June 1, 2016

By:
Barry Norman
Published: May 31, 2016, 03:02 UTC

The EUR/JPY gained 10 points to climb to 123.87 as the euro recovered a bit in the Asian session. There was no Japanese data and little headlines this

EUR/JPY Fundamental Forecast – June 1, 2016

The EUR/JPY gained 10 points to climb to 123.87 as the euro recovered a bit in the Asian session. There was no Japanese data and little headlines this morning as markets take a breather after the G7 summit.

After the summit the likelihood of a delay in the sales tax by Prime Minister Abe became more possible. A consumption tax rise from 8 per cent to 10 per cent was scheduled for April next year. Delaying it prevents a big fiscal squeeze on a stuttering economy, and comes ahead of upper house elections scheduled for July, although Mr Abe is no longer expected to call lower house elections on the same day.

As well as putting off the consumption tax rise, Mr Abe is preparing a fiscal stimulus that could amount to ¥5tn-¥6tn ($45bn-$54bn). Postponing the sales tax rise is something of a gamble for Mr Abe. The political upside is simple: voters dislike tax rises. The risk is subtler. Opponents are using the delay to argue that his Abenomics program has failed.(Financial Times)

Euro-area economic confidence rose for a second month in May as the European Central Bank prepares to present updated economic projections that could provide further clues about the impact of its stimulus program.

An index of executive and consumer sentiment increased to 104.7 from a revised 104.0 in April, the European Commission in Brussels said on Monday. That’s the highest level in four months and compares to a median estimate for an increase to 104.4 in a Bloomberg News survey of economists.

ECB officials meeting in Vienna on Thursday are expected to keep their ultra-loose policy unchanged again after they expanded quantitative easing by a third to 80 billion euros (S$122.57 billion) in March and cut the deposit rate further below zero. Vice President Viktor Constancio said last week that he’s optimistic the ECB will reach its inflation goal by 2018, reflecting the upgraded stimulus and rising oil prices.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

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Upcoming Economic Events that you should be monitoring:

Wednesday, June 1, 2016

Cur. Event Actual Forecast Previous
  CNY Manufacturing PMI (May)   50.0 50.1
  CNY Non-Manufacturing PMI (May)     53.5
  AUD GDP (QoQ) (Q1)   0.6% 0.6%
  AUD GDP (YoY) (Q1)   2.7% 3.0%
  CNY Caixin Manufacturing PMI (May)   49.3 49.4
  GBP Nationwide HPI (YoY) (May)   4.6% 4.9%
  GBP Nationwide HPI (MoM) (May)   0.2% 0.2%
  EUR Manufacturing PMI (May)   51.5 51.5
  GBP Manufacturing PMI (May)   49.6 49.2
  USD Manufacturing PMI (May)   50.5 50.5
  USD ISM Manufacturing Employment   49.8 49.2
  USD ISM Manufacturing PMI (May)   50.5 50.8
  NZD GlobalDairyTrade Price Index     2.6%
  USD Beige Book      

Government Bond Auctions

Date Time       Country           Auction

May 30 11:10 Italy Eur 2-2.5bn 0.45% Jun 2021 BTP

Jun 01 10:30 Denmark Holds bond auction

Jun 01 11:30 Germany Eur 4bn 0% Apr 2021 Bobl

Jun 01 11:30 UK Gbp 2.75bn 1.5% 2021 Gilt

Jun 01 17:20 Sweden Announces details of bond auction on Jun 08

Jun 02 10:30 Spain Holds bond auction

Jun 02 10:50 France Eur 8-9bn 2.25% May 2024, 0.5% May 2026 & 3.25%

Jun 02 11:03 Sweden Sek 0.5bn 0.125% 2019 I/L & Sek 0.5bn 0.125% 2026 I/L bonds

Jun 06 13:00 Norway Details of bond auction on Jun 08

Jun 07 11:00 Netherlands Eur 4-6bn Jan 2022 DSL

Jun 07 11:00 Austria Holds bond auction

Jun 07 11:30 Germany Holds I/L bond auction

Jun 07 11:30 UK 4.5% 2046 Gilt

Jun 08 11:03 Sweden Holds bond auction

Jun 08 11:05 Norway Holds bond auction

Jun 08 11:30 Germany Eur 5bn Jun 2018 Schatz

Jun 08 17:20 Italy Announces details of bond auction

Jun 09 11:30 UK 0.125% 2036 I/L Gilt

Jun 09 17:20 Sweden Announces details of I/L auction on Jun 16

 

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