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Japan BoP, Sweden CPI, Riksbank Minutes - RBS

FXStreet (Bali) - RBS FX Strategists break down the most relevant events for Tuesday, a relatively quiet day due to public holidays in varies international financial centers, including the US, which celebrates 'Veterans Day'.

Key Quotes

"With Veterans' Day in the US, it looks to be a relatively quiet next 24 hours in terms of major data releases and events. In Japan, the seasonally adjusted current account balance is expected to remain in surplus in September for the sixth straight month, albeit only just with a Bloomberg consensus of JPY 36.9bn versus JPY 130.8bn in August. The significant trade deficit is also expected to persist as higher import costs driven by recent rapid JPY depreciation offset the impact of lower oil prices. USD/JPY has moved to around 115, a major psychological level and pivot level from 2000 to 2007. At some point the medicine in Japan may be seen as working and this would play JPY positive, but we don’t think we’re there yet. We still target USD/JPY higher over coming months as monetary policy divergence remains a familiar, but compelling theme."

"Elsewhere much of the action is in Sweden, where October CPI and the Minutes from the October policy meeting are released. Inflation remains the must watch series in Sweden, with the Riksbank taking rates to the floor last week as it seeks to prevent very low inflation from becoming entrenched. Consensus beating prints in Norway and Denmark today point to possible upside risks for tomorrow’s release. We look for a lower EUR/SEK in the coming weeks, anticipating a broadly weaker EUR and on a view that unconventional policy measures in Sweden could first require SEK appreciation. The Minutes will be watched closely for any insights into the size of the hurdle to further easing, as well as whether the merits of different policy tools, from asset purchases to FX intervention, have been discussed."

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