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EUR/JPY Fundamental Forecast – May 31, 2016

By:
Barry Norman
Published: May 30, 2016, 04:28 UTC

The EUR/JPY gained 60 points in the morning session with the US and UK on holiday and traders looking at a rate increase in the US. This week the ECB will

EUR/JPY Fundamental Forecast – May 31, 2016

The EUR/JPY gained 60 points in the morning session with the US and UK on holiday and traders looking at a rate increase in the US. This week the ECB will meet on Thursday but no changes are expected.  The yen fell after Prime Minister Abe announced a delay in the sales tax increase.  While a delay in the sales tax hike could shield the floundering economy from a tax shock, it means less income for the cash-strapped government, possibly prompting credit rating agencies to downgrade Japan’s sovereign rating.

“A potential credit downgrade will also hurt the yen, so the recent developments would be negative for the yen overall,” Yamamoto said.

Japan is also seen compiling a supplementary budget to boost the sputtering economy, a move which is widely expected to be followed by further monetary easing by the Bank of Japan.

Japan’s government will probably hold off raising the tax because it needs to give priority to economic growth, Abe aide Hakubun Shimomura said on Fuji television on Sunday. Data on Monday showed retail sales growth stalled in April from the previous month, backing the case for a delay.

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:

Tuesday, May 31, 2016

Cur. Event Actual Forecast Previous
  NZD ANZ Business Confidence (May)     6.2  
  AUD Building Approvals (MoM) (Apr)   -3.0% 3.7%  
  AUD Current Account (Q1)   -19.5B -21.1B  
  AUD Private Sector Credit (MoM) (Apr)   0.5% 0.4%  
  EUR CPI (YoY) (May)   -0.1% -0.2%  
  EUR Unemployment Rate (Apr)   10.2% 10.2%  
  USD Core PCE Price Index (MoM) (Apr)   0.2% 0.1%  
  USD Core PCE Price Index (YoY) (Apr)     1.6%  
  USD Personal Spending (MoM) (Apr)   0.6% 0.1%  
  CAD GDP (MoM) (Mar)   -0.1% -0.1%  
  CAD GDP (QoQ) (Q1)     0.2%  
  CAD GDP Annualized (QoQ) (Q1)   2.9% 0.8%  
  USD S&P/CS HPI Composite – 20 n.s.a. (YoY)   5.1% 5.4%  
  USD Chicago PMI (May)   50.6 50.4  
  USD CB Consumer Confidence (May)   96.0 94.2  

Government Bond Auctions

Date Time       Country           Auction

May 30 11:10 Italy Holds bond auction

Jun 01 10:30 Denmark Holds bond auction

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

Jun 01 11:30 UK 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 11:03 Sweden Holds I/L bond auction

Jun 02 11:50 France Holds bond auction

 

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