Talking Points:
11/13 Tuesday | 23:50 GMT | JPY Gross Domestic Product Annualized (3Q P)
If there was any sense that the Bank of Japan may try to unwind its QE program, that Q3’18 Japanese GDP release should squash those hopes entirely. Due in at -0.9% annualized, Japanese GDP is due to turn negative for the first time since Q4’15. Likewise, with the GDP deflator due in at -0.1% from +0.1%, there will be some concern that inflation pressures may be fading again (Japanese National CPI was +1.2% (y/y) in September, still off the yearly high set in February at +1.5%). While weak growth readings will be bad for the Japanese Yen, they may prove positive for risk appetite as the prospect for ongoing easing by the BOJ rises.
Pairs to Watch: AUD/JPY, EUR/JPY, GBP/JPY, USD/JPY
11/14 Wednesday | 09:30 GMT | GBP Consumer Price Index (OCT)
Inflation in the UK is due to remain depressed from its earlier yearly highs, even if a slight rebound in price pressures are due. Headline inflation is due in at +2.5% from +2.4% (y/y), and the monthly reading is due in at +0.2% from +0.1% (m/m). Core CPI is expected to have stayed on hold at +1.9%. At the policy meeting at the start of November, the Bank of England’s Monetary Policy Committee continued to suggest that policy would not changeuntil after the Brexit deadline had passed (March 2019), meaning the weight of policy-sensitive data has less of an impact in the near-term; Brexit developments are far more important. That said, signs that inflation is moderating should be neither a positive or negative catalyst for the British Pound, especially as both core and headline inflation remain between +2-3%.
