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Daily Market Outlook by Kate Curtis from Trader's Way

Discussion in 'Market Predictions and Reports' started by katetrades, Feb 11, 2013.

  1. TradersWay

    TradersWay TradersWay Representative

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    Forex Major Currencies Outlook (Jan 7 – Jan 11)

    USD

    The final Manufacturing PMI for the month of December came in at 53.8 vs 53.9 as expected. This is the lowest reading since September of 2017. Employment category fell to 52.7 vs 55.3 the previous month which is the lowest reading since June of 2017. New orders also showed decline to 54.3 vs 56.7 the previous month. This level is lowest since September 2017. ISM Manufacturing Index came in at 54.1 vs 57.5 as expected with prior reading showing 59.3. This is the biggest drop since 2008. All major categories showed declines with New Orders leading the way with 51.1 vs 62.1 the prior month. Employment figure came in at 56.2 vs 58.4 the previous month. Since PMI is a leading indicator this brings a bit of worry and raises questions regarding the strength of the labour market.

    ADP employment report showed that 271k new jobs were added in the US economy for the month of December vs 179k as expected. ADP report once again showed a high correlation with NFP as headline NFP came in at 312k completely smashing expectations of 170k. Unemployment ticked up to 3.9% due to the rise in participation rate to 63.1% which is highest since 2014. Average hourly earnings came in at 0.4% m/m vs 0.3% m/m as expected and at 3.2% y/y vs 3% y/y as expected.

    This week we will have inflation data (CPI), FOMC minutes from December’s meeting, trade balance data and non-manufacturing PMI data.

    Important news for USD:

    Monday:

    • -- Factory Orders
    • -- ISM Non-Manufacturing PMI
    Tuesday:
    • -- Trade Balance
    • -- Export
    • -- Import
    Wednesday:
    • -- FOMC Minutes
    Friday:
    • -- CPI
    • -- Federal Budget Balance
    EUR

    The final Manufacturing PMI for the month of December for the Eurozone came in at 51.4 as expected. Contractions were seen in France, probably due to “gilet jaunes” Yellow vest movement and in Italy where the number shows contraction for the third consecutive month. Overall the manufacturing PMI of the Eurozone shows steady decline since the beginning of 2018. Services PMI came in at 51.2 and Composite PMI came in at 51.1. Both numbers came below preliminary readings with Italy and Spain beating the preliminary reading while Germany and France missed.

    Preliminary CPI data for the month of December came in at 1.6% y/y vs 1.7% y/y as expected. Drop in the headline figure is a worrisome but it can be attributed to the falling oil prices. Core CPI came in at 1% y/y as expected. The fact that core CPI is not dropping is encouraging but it has stayed at 1% for several months and it is a long way from targeted level of 2%.

    This week we will have data on consumption and employment as well as sentiment and climate indicators for the Euro area. Additionally, we will have data on industrial production, consumption and trade balance from Germany.

    Important news for EUR:

    Monday:

    • -- Factory Orders (Germany)
    • -- Retail Sales (Germany)
    • -- Retail Sales
    Tuesday:
    • -- Industrial Production (Germany)
    • -- Economic Sentiment Indicator
    • -- Business Climate Indicator
    Wednesday:
    • -- Trade Balance (Germany)
    • -- Export (Germany)
    • -- Import (Germany)
    • -- Unemployment Rate
    GBP

    UK December Manufacturing PMI came in at 54.2 vs 52.5 as expected for a healthy beat. New orders sub-index rose to its highest level since February. This number is helped by stockpiling ahead of the potential no deal Brexit. Services PMI came in at 51.2 vs 50.7 as expected and 50.4 the previous month and Composite PMI came in at 51.4 vs 50.8 the previous month. Decent beat on the data but business expectations category fell to 60.2 from 60.6 the previous month again showing impact that Brexit is having on business conditions in the UK.

    This week British Parliament will start working and Brexit deal will be on the agenda. Additionally, we will get data on industrial and manufacturing production as well as trade balance data.

    Important news for GBP:

    Friday:

    • -- Industrial Production
    • -- Manufacturing Production
    • -- Trade Balance
    AUD

    China Manufacturing PMI for the month of December came in at 49.4 vs 50 as expected. This puts it into contraction for the first time since July 2016. Non-manufacturing PMI came in at 53.8 vs 53.2 as expected for the composite number of 52.6. New export orders contracted for a seventh straight month. They came in at 46.6 vs 47.0 the previous month. Manufacturing PMI shows signs of deleveraging and less robust growth of the World Economy. Also, it shows that the trade war has had impact on Chinese economy. Caixin PMI, which shows the data for smaller more export-oriented firms, also showed contraction as it came in at 49.7. Slowing of manufacturing process in China could mean less need for import of raw materials which will offset Australia’s exports and weigh negatively on AUD. Final Manufacturing PMI for the month of December for Australia comes in at 54 showing continued expansion in new orders, elevated business conditions and signs of easing inflationary pressures due to lower oil prices. Services PMI data came in at 52.7 vs 53.7 the previous month for a composite number of 52.9. Caixin Services PMI from China came in at 53.9 vs 53 as expected. Positive data from China boosted AUD in the early trading on Friday and AUD was additionally boosted by the announcement of PBOC to cut bank’s RRR rate by 100 bps. The first 50 bps cut will take effect on January 15 and second 50bps cut will be applied from January 25.

    This week we will have housing data, data on consumption and trade balance data. Chinese inflation data will also be closely monitored.

    Important news for AUD:

    Tuesday:

    • -- Trade Balance
    • -- Export
    • -- Import
    Wednesday:
    • -- Building Approvals
    Thursday:
    • -- CPI (China)
    Friday:
    • -- Retail Sales
    NZD

    GDT Price Index came in at 2.8%. This is the third straight month of rising dairy prices which will surely boost New Zealand’s exports. NZD reacted positively on this news and strengthened against USD but prevailing risk off sentiment will weigh heavily against NZD.

    This week we will get housing data from New Zealand.

    Important news for NZD:
    Thursday:

    • -- Building Consents
    CAD

    Manufacturing PMI for the month of December came in at 53.6 vs 54.9 as expected. Lowest level since January 2017. Employment category fell to its lowest since May 2018.

    Canada employment change came in at 9.3k vs 6.9k estimate. Unemployment and participation rates stayed the same with former coming in at 5.6% and latter coming in at 64.4%. Hourly wage rates remained for permanent employees stayed at the same level of 1.5%. Increases were recorded in manufacturing, transportation and warehousing, as well as in health care and social assistance while declines were in wholesale and retail trade as well as in public administration. Also, part time employment change was 28.3k while full time employment change was -18.9k which will put a dent in this report.

    This week centre stage will belong to BOC and their rate decision followed by press conference. It is expected that the rate will stay at 1.75% so the interpretation by BOC members of mixed data, falling oil prices, USMCA deal and effects of US-China trade war will be closely monitored. During the week we will also get Ivey PMI data as well as housing and trade balance data.

    Important news for CAD:

    Monday:

    • -- Ivey PMI
    Tuesday:
    • -- Trade Balance
    • -- Export
    • -- Import
    Wednesday:
    • -- BOC Interest Rate Decision
    • -- BOC Rate Statement
    • -- BOC Monetary Policy Report Press Conference
    • -- EIA Crude Oil Stocks Change
    Thursday:
    • -- Building Permits
    Important news for JPY:
    Monday:

    • -- Nikkei Services PMI
    Wednesday:
    • -- Labour Cash Earnings
    Thursday:
    • -- BOJ Kuroda Speech
    Friday:
    • -- Household Spending
    • -- Current Account
    • -- Goods Trade Balance
    Important news for CHF:
    Tuesday:

    • -- Unemployment Rate
    • -- Retail Sales
    Wednesday:
    • -- CPI
     
  2. katetrades

    katetrades TradersWay.com representative

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    Forex Major Currencies Outlook (Jan 14 – Jan 18)

    USD

    December non-manufacturing PMI came in at 57.6 vs 59.0 as expected with prior reading being 60.7. Reading is a five-month low and the only bright point is that new orders ticked up higher.

    FED members Bostic and Evans (Evans is a voting member in 2019) have been bit more dovish than expected. Evans stated that “FED has the capacity to wait and take stock of incoming data” and added that H1 of 2019 would be the key for deciding on future rake hikes. Dollar bulls didn’t like the sound of that and dollar was trading lower across the markets. FOMC minutes showed that officials felt that timing and extent of rate hikes is less clear. FED should assess the impact of risks that have become more pronounced in recent months. Chairman Powell said that there is no specified amount of rate hikes. Vice Chair Clarida stated that the economy can tolerate inflation above 2%, effectively saying that there is no need to rush with rate hikes.

    Trade balance data from US have been delayed due to the government shutdown. In 2013 when the government shutdown lasted 16 days GDP was slashed 0.6%. We are currently at the day 20. CPI for the month of December came in at 1.9% y/y as expected with core CPI at 2.2% y/y as expected and 0.2% m/m. Average weekly earnings came in at 1.2% y/y as expected. All numbers came in line with expectations.

    This week we will have data on consumption, housing and industrial production as well as FED Beige Book. Please note that the US government is still partially closed so in the case that it opens fully during this week we will have plethora of data that were delayed, for example trade balance data, durable goods orders, new home sales, etc.

    Important news for USD:

    Wednesday:

    • -- Retail Sales
    • -- FED Beige Book
    Thursday:
    • -- Building Permits
    • -- Housing Starts
    Friday:
    • -- FED Industrial Production
    EUR

    Eurozone Retail Sales for the month of November came in at 0.6% m/m vs 0.2% m/m as expected and same as the previous month. This puts yearly figure at 1.1% y/y vs 0.4% y/y as expected. This is one positive reading coming from Eurozone showing that spending and consumption can remain elevated in Q4.

    The unemployment rate in the Eurozone dropped to 7.9% from 8.1%. This is a 10-year low for unemployment showing that the labour market continues to tighten. Now, if these numbers can translate to wage growth, inflation picture for Eurozone will be much brighter.

    This week we will have data on trade balance and current account, industrial production as well as inflation from both Germany and Eurozone. Full year GDP data for 2018 for Germany will be published on Tuesday.

    Important news for EUR:

    Monday:

    • -- Industrial Production
    Tuesday:
    • -- Trade Balance
    • -- GDP (Germany)
    Wednesday:
    • -- CPI (Germany)
    Thursday
    • -- CPI
    Friday:
    • -- Current Account
    GBP

    Vote on the Brexit deal in Parliament is set for Tuesday January 15. Prime Minister May has indicated yesterday that if Parliament rejects the deal, she is prepared to lead the UK out of the EU on March 29 in any event. MPs voted in favour of demanding that the government comes up with an alternative plan to Brexit within three working days if it loses the meaningful vote next week.

    November GDP came in at 0.2% m/m vs 0.1% m/m as expected. Index of services came in at 0.3% m/m vs 0.1% m/m as expected and that pushed the GDP figure higher since factory data was disappointing with industrial production coming in at -1.5% y/y vs -0.7% y/y as expected and manufacturing production coming in at -1.1%. y/y vs -0.7% y/y as expected. Goods trade balance came in at -£12.0bn vs -£11.4 as expected with the prior reading showing -£11.9bn while the total trade balance deficit declined to -£2.904bn. Total exports rose by 0.4% while the imports increased by 0.1%.

    This week the Brexit Parliament Vote will take the centre stage. Pound will be heavily influenced by the outcome. It is expected that the deal will not pass so the government will have to provide plan B within three working days which puts the deadline at January 21. We will have data on consumption and inflation later in the week.

    Important news for GBP:

    Tuesday:

    • -- Brexit Parliament Vote
    Wednesday:
    • -- CPI
    Friday:
    • -- Retail Sales
    AUD

    Manufacturing PMI for the month of December fell to 49.5 vs 51.3 the previous month. This is the first time in 26 months that the reading shows contraction. October’s PMI was above 58, thus this reading shows sharp decline and generally weaker conditions in the Australian economy. Six out of seven activity indexes fell, most notably production, employment and exports. New orders index rose but it is still in contraction territory, below 50.

    The November Trade Balance number came in at 1.925bn AUD vs 2.175bn AUD as expected. Slightly weaker than expected reading but encouraging fact is that exports rose 1% m/m. Building permits dropped 9.1% in November for the largest monthly decline since 1980 thus enhancing Australia’s housing problem. Retail Sales came in at 0.4% m/m vs 0.3% m/m as expected.

    This week we will have Chinese trade balance data.

    Important news for AUD:

    Monday:

    • -- Trade Balance (China)
    NZD

    Building permits for the month of November came in at -2% m/m vs 1.5% m/m the previous month. Overall trend is still to the upside. NZD has been very strong this week profiting from the rise in risk appetite and USD weakness.

    Important news for NZD:

    Monday:

    • -- Food Price Index
    Tuesday:
    • -- GDT Price Index
    • -- Electronic Card Retail Sales
    Thursday:
    • -- Business NZ Manufacturing Index
    CAD

    Canadian Ivey PMI data for the month of December came in at 59.7 vs 57.2 the previous month and 58.1 as expected. Although the overall number is higher, the employment index decreased for the second consecutive month.

    Trade balance data for the month of November came in at -2.06bn CAD vs -2.15bn CAD as expected with the prior reading showing -1.17bn CAD. Better than expected numbers but the deficit widens. Exports have fallen more than expected at -1.8% while imports fell only -0.3%. This is the fourth consecutive month of falling exports with 8 of 11 sectors reporting decline. The energy sector led the way with decrease of 9.2%, mostly due to the lower prices.

    BOC has left the overnight rate unchanged at 1.75% as widely expected. They stated that pace of rate hikes will depend on oil and housing and added that housing activity and consumption are weaker than expected. They acknowledged slowdown in global economic growth and see the signs that US – China trade war is weighing in on global demand and commodity prices. The drop in global oil prices has a material impact on the Canadian outlook, resulting in lower terms of trade and national income. Forecast for 2018 GDP has been lowered to 2% vs 2.1% prior and it is expected that inflation will be below for the most of 2019 due to lower gas prices. The inflation will return to 2% by late 2019 as transitory effects unwind. As stated in statement “there is no pre-set course” for future rate decisions and “it’s all about the data”.

    This week we will get inflation data from Canada and OPEC report on oil.

    Important news for CAD:

    Wednesday:

    • -- EIA Cushing Crude Oil Stocks Change
    Thursday:
    • -- OPEC Monthly Oil Market Report
    Friday:
    • -- CPI
    JPY

    Labour cash earnings came in at 2% y/y vs 1.2% y/y as expected with real cash earnings coming in at 1.1% y/y vs 0.4% y/y as expected. Nice beat on the data and perhaps higher wages will feed into inflation to bring it back closer to the BOJ target of 2%.

    BOJ governor Kuroda stated in his speech that Japan’s economy is expanding moderately and that overseas risks are heightening. He assessed Japan’s financial system as stable and added that BOJ will maintain QQE with yield curve control for as long as needed to achieve targeted 2% inflation in stable manner.

    Household spending for the month of November came in at -0.6% y/y vs -0.1% y/y as expected. This number is down for the third consecutive month while wages are rising and consumer confidence is positive. Trade balance data came in at 1348.7bn JPY vs – 612.6bn JPY as expected.

    This week we will have national inflation data and data on industrial production.

    Important news for JPY:

    Friday:

    • -- CPI
    • -- Industrial Production
    CHF

    November retail sales data came in at -0.5% y/y vs -0.6% y/y as expected and the unemployment rate came in at 2.4% as expected. CPI data came in at -0.3% m/m vs -0.2% m/m as expected and 0.7% y/y vs 0.8% y/y as expected. Core CPI came in at 0.3% y/y vs 0.2% y/y as expected. Although the core inflation measure ticked higher, it is still too close to 0% level. If headline inflation continues its downtrend, things can get messy for the economy.
     
  3. katetrades

    katetrades TradersWay.com representative

    Joined:
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    Forex Major Currencies Outlook (Jan 21 – Jan 25)

    On Monday most banks and financial institutions will be closed in the US due to Martin Luther King’s day so liquidity in the markets will be thinner than usual, causing higher spreads and more volatile movements.

    USD

    FED’s George, who is the most hawkish member of the FED, also acknowledged that FED can be patient and wait with rate hikes. He added that a pause in the normalisation process would provide time to exercise the economy. This supports the general view they may pause until June. FED’s Williams stated the need for “prudence, patience and good judgement”. He added that FED doesn’t see worrying signs of inflation pressures and that FED will reassess the balance sheet policy if conditions change. US GDP growth will be about 2.0-2.5% in 2019 vs 3% in 2018.

    This week we expect to get data on housing, preliminary PMIs and Durable Goods, however due to the ongoing government shutdown some data may be delayed. The shutdown has already cost $3.5 bn according to S&P Global ratings. This is the longest government shutdown in US history, lasting almost a month now.

    Important news for USD:

    Tuesday:
    • -- Existing Home Sales
    Thursday:
    • -- Markit Manufacturing PMI
    • -- Markit Services PMI
    • -- Markit Composite PMI
    Friday:
    • -- Durable Goods
    • -- New Home Sales

    EUR

    Industrial production for the month of November for entire Eurozone came in at -1.7% m/m vs -1.5% m/m as expected. Worse than expected reading reflecting previously published German and French industrial production data signalling further slowdown of economic activity in the Q4. The first release of German GDP data came in at 1.5% y/y as expected for the 2018. Both exports and imports came in lower in 2018 than in 2017 reflecting a slowdown for German products, resulting from slowing economic growth and lower domestic demand.

    Eurozone trade balance for the month of November showed a surplus of €15.1 bn vs €12.6bn as expected. However slight inspection under the hood of these numbers shows that higher surplus was achieved by both falling exports and falling imports. Exports fell 1% m/m and imports fell 1.9% m/m. As for trade with the US, the year-to-date November 2018 trade surplus stands at €129.0 bn and that is far greater than the year-to-date November 2017 trade surplus of €107.4 bn. Final CPI reading was in line with the expectations with headline CPI showing 1.6% y/y and core CPI showing 1% y/y.

    ECB president Draghi came in as dovish with his remarks that further substantial stimulus is needed. This warning comes as a response to the slew of weak data from EU that were acknowledged by Draghi as weaker than expected. He added that there is no room for complacency which could lead to a dovish statement at next week’s ECB meeting.

    This week centre stage will be taken by ECB interest rate decision and monetary policy conference headed by the president Draghi. Changes in the rate are not expected, however due to weaker economic data coming from the EU it is possible that Draghi will be more dovish in his statement shifting the assessment of risks from “broadly balanced” to “tilted to the downside”. Additionally, we will have data on business conditions in EU and Germany as well as preliminary PMIs.

    Important news for EUR:

    Tuesday:
    • -- ZEW Economic Sentiment Indicator (EU and Germany)
    Thursday:
    • -- Markit Manufacturing PMI (France, Germany and EU)
    • -- Markit Services PMI (France, Germany and EU)
    • -- Markit Composite PMI (France, Germany and EU)
    • -- ECB Interest Rate Decision
    • -- ECB Monetary Policy Press Conference
    Friday:
    • -- Ifo Business Expectations (Germany)
    • -- Ifo Business Climate (Germany)

    GBP

    The Brexit deal was voted down with 230 votes difference (202-432). This is the biggest loss for UK Government in history. Leader of the Labour Party Jeremy Corbyn immediately seized the opportunity and called for a no-confidence vote. PM May survived the no-confidence vote with a narrow margin of 19 votes (325-306). The vote can be repeated in the near future, and if PM May does anything that DUP party doesn’t like they will likely abandon support for her. PM May stated that she will get together with all parties to prepare a way forward. A motion on government’s next steps regarding Brexit will be brought before Parliament on January 21 and debate on the motion will be held on January 29.

    December CPI came in at 0.2% m/m as expected and 2.1% y/y as expected with the prior reading showing 2.3%. Fall in the headline inflation is contributed to falling fuel, lubricant and petrol prices. Core CPI came in at 1.9% y/y vs 1.8% y/y as expected. Rise in core inflation shows that real inflationary pressures are holding steady. Retail sales came in at -0.9% m/m vs -0.8% m/m as expected. Retail Sales are 3% y/y. Consumers shaken by the Brexit uncertainties and the fact that most of the Christmas shopping was done on Black Friday in November caused a very weak reading showing the worst December performance in a decade.

    This week we will have a Plan B regarding the Brexit from PM May. There are several possibilities: a second referendum, a Norway-style partnership, or a permanent customs union. From a strictly economic prospective we will have data on wages and employment.

    Important news for GBP:

    Monday:
    • -- Plan B regarding the Brexit
    Tuesday:
    • -- Average Weekly Earnings
    • -- Unemployment Rate

    AUD

    Chinese trade balance for the month of December came in at CNY 395bn vs CNY 345bn as expected. Exports came in at 0.2% y/y vs 6.6% y/y as expected with the prior reading showing 10.2% y/y. Imports came in at -3.1% y/y vs 12.0% y/y as expected with the prior reading showing 7.8% y/y. In USD terms exports fell 4.4% y/y while imports plunged 7.6% y/y. Both export figures and import figures were huge misses showing that the trade war is taking its toll, along with global slowdown (exports) and demand in China is slowing (imports). The Chinese government announced a new stimulus, tax cuts and lowering of the RRR rate, so the country can continue with high paced economic growth.

    This week we will have GDP, consumption and industrial production data from China and employment data from Australia.

    Important news from AUD:

    Monday:
    • -- GDP (China)
    • -- Retail Sales (China)
    • -- Industrial Production (China)
    Thursday:
    • -- Employment Change
    • -- Unemployment Rate
    • -- Participation Rate

    NZD

    Food prices for the month of December came in at -0.2% m/m vs -0.6% m/m the previous month. Lesser fall of prices than in the previous month can be positive for inflation and NZD in general. GDT Price Index came in at 4.2% for a fourth consecutive positive auction. NZD was unchanged on this news possibly because of the overwhelming market themes (Brexit). Electronic card spending for the month of December came in at -2.3% m/m vs -0.4% m/m as expected for a huge miss. This data accounts for about 70% of NZD retail sales data so we can expect a weak number coming in next week. House sales dropped 12.9% y/y. Business NZ manufacturing PMI for the month of December came in at 55.1 vs 53.5 the previous month.

    This week we will have inflation data from New Zealand.

    Important news for NZD:

    Tuesday:
    • -- CPI

    CAD

    CPI for the month of December came in at 2% y/y vs 1.7% y/y as expected. Positive beating immediately reflected in CAD strength across the markets." A month-over-month increase in the air transportation index (+21.7%) reflected higher prices for travel during the holiday season," Statistics Canada reported. Core common and Core trimmed numbers came in at 1.9% y/y, the same as the prior reading while Core median ticked down to 1.8% y/y from 1.9% y/y the previous month. BOC just got new ammunition to continue with its hawkish rhetoric.

    This week we will have data on wholesale trade as well as manufacturing and retail sales.

    Important news for CAD:

    Tuesday:
    • -- Manufacturing Sales
    • -- Wholesale Trade
    Wednesday:
    • -- Retail Sales

    JPY

    Deputy governor Amamiya said in his speech at G20 symposium that ageing population of Japan can negatively affect future economic activity and that it is an important risk factor for the economy. He stated that “given the appropriate policy response, it can also have a positive impact on the economy” and added that ageing is a common policy challenge for all G20 members. National CPI for the month of December came in at 0.3% y/y as expected. CPI excluding fresh food and energy also came in at 0.3% y/y as expected. Far cry from the targeted 2%. Governor Kuroda stated that he expects US-China trade war to be resolved this year.

    This week we will have the BOJ interest rate decision, followed by the outlook report, monetary policy statement and press conference will take the centre stage. Changes in the rate are not expected, however revision down of inflation forecasts in outlook report is possible, especially after national CPI data, which means that loose policy will remain for a longer period of time and that is negative for JPY. Additionally, we will see data on trade balance as well as preliminary manufacturing PMI and inflation data for the Tokyo area.

    Important news for JPY:

    Wednesday:
    • -- Trade Balance
    • -- Exports
    • -- Imports
    • -- BOJ Interest Rate Decision
    • -- BOJ Outlook Report
    • -- BOJ Monetary Policy Statement
    • -- BOJ Press Conference
    Thursday:
    • -- Nikkei Manufacturing PMI
    Friday:
    • -- Tokyo CPI

    CHF

    SNB governor Jordan acknowledged that economic uncertainties have increased in recent months. He stated that negative interest rates make life difficult for pension funds and affect the property markets but increasing rates would negatively affect the economy and that would also have a negative impact on pensions. According to him there is no risk of Swiss inflation rising in the near future.
     
  4. katetrades

    katetrades TradersWay.com representative

    Joined:
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    Forex Major Currencies Outlook (Jan 28 – Feb 1)

    USD

    IMF cut the global growth forecast to 3.5% for 2019 which is the lowest in 3 years; they see growth in 2020 to be at 3.6%. They maintain USD growth forecast at 2.5% for 2019 and 1.8% for 2020. Risk to global growth are tilted to the downside according to them and further escalation of trade tensions remains the key risk factor.

    The Government shutdown has been suspended for three weeks until February 15th, by which time President Trump expects Congress to come to an agreement on the budget, otherwise he has stated that he will let the shutdown begin once again.

    The overall consensus is that there will be no damage to the US economy in the long run since the state will reimburse workers for their lost salaries. All back-pay during the one-month shutdown is scheduled to be paid during this week. If the government shuts down again, the longer it lasts, the more of a chance the growth of Q1 2019 will be affected. For every week that the government is closed, a little more than 0.1% of GDP is slashed. So far conservative estimates are that the shutdown has cost at least 0.7% of GDP.

    This week we will have data on consumer confidence, housing and final PMI numbers. An interest rate decision is expected to stay unchanged. Big event will be Nonfarm payrolls. It is expected that the number will be around 170k, which is a big drop from the December figure. Again, more eyes will be drawn to the average hourly earnings numbers, although the kneejerk reaction will be on the headline NFP number.

    Important news for USD:

    Tuesday:

    • -- Consumer Confidence Index

    Wednesday:

    • -- ADP Nonfarm Employment Change
    • -- Pending Home Sales
    • -- FED Interest Rate Decision
    • -- FOMC Statement

    Friday:

    • -- Nonfarm Payrolls
    • -- Unemployment Rate
    • -- Average Hourly Earnings
    • -- Markit Manufacturing PMI
    • -- ISM Manufacturing PMI


    EUR

    IMF cut the Eurozone growth forecast for 2019 to 1.6% from 1.9% projected in October. Bank of Italy cut its GDP growth forecast to 0.6% for 2019 from 1% in December and to 0.9% for 2020 from 1.1% previously. ZEW survey of current situation in Germany plunged to 27.6 vs 45.3 as expected. With Germany being the leading economy in the EU survey shows bleak situation.

    Preliminary European PMIs came weaker than expected across the boards. They are still in expansionary territory however manufacturing PMI that came in at 50.5 is weakest since November 2014, services PMI that came in at 50.8 is weakest since August 2013 and composite PMI that came in at 50.7 is weakest since July 2013. Everything points to a stall in EU growth. French composite and services PMI slumped deeper into contraction while a dropdown in German manufacturing PMI, showing contraction due to issues with auto industry and slowing China demand, was offset with a rise in services PMI which lead to expansionary composite PMI reading. According to the PMI data, EU Q1 GDP is 0.1%.

    ECB Draghi delivered a message that represents fine balance between risks and confidence during the press conference. Incoming data have continued to be weaker than expected and slowdown is due to fall in external demand as well as some country specific reasons. According to him: "The risks surrounding the euro area growth outlook have moved to the downside on account of the persistence of uncertainties related to geopolitical factors and the threat of protectionism, vulnerabilities in emerging markets and financial market volatility." Confidence in the outlook is based on continued growth and strong employment and financial conditions are favorable with very low likelihood of recession. The only assessment of the current situation was done in this meeting while new forecasts will be done in March.

    This week we will have data on sentiment in the EU as well as preliminary inflation and unemployment from both Germany and EU, preliminary Q4 GDP and final PMI numbers.

    Important news for EUR:

    Wednesday:

    • -- Business Climate Indicator
    • -- Economic Sentiment Indicator
    • -- CPI (Germany)

    Thursday:

    • -- Unemployment Rate (Germany)
    • -- GDP
    • -- Unemployment Rate

    Friday:

    • -- Markit Manufacturing PMI (Eurozone, Germany, France)
    • -- CPI


    GBP

    Average hourly earnings came in at 3.4% 3m/y vs 3.3% 3m/y as expected. This is the highest reading since July 2008 and if it can turn into consumption it will be great boost for the UK economy. Unemployment ticked down to 4% vs 4.1% as expected.

    PM May's Plan B seems to rest on convincing the European Commission to make some concession on the Irish backstop, which keeps the UK in the customs union until a new agreement is struck. Cross-party alliance is emerging for the House of Commons to take control over Brexit if there is no deal by the end of February 26. Additionally, around 40 members of the government threaten to resign next week if the Tory MPs are banned from voting on a plan to prevent a no-deal exit. Hints that Brexit will be delayed from the end of March are pushing GBP higher across the markets.

    This week we will have Parliament voting on PM May’s plan B for Brexit, speech from governor Carney and final PMI number.

    Important news for GBP:

    Tuesday:

    • -- Voting on plan B in the Parliament

    Wednesday:

    • -- BOE Governor Carney Speech

    Friday:

    • -- Manufacturing PMI


    AUD

    Chinese Q4 GDP data came in at 6.4% y/y as expected ticking down a notch from 6.5% y/y the previous month. GDP for the full year is 6.6% as expected, readings were in line with expectations, however GDP is the lowest in 28 years and Q4 GDP was the lowest in a decade. Industrial production came in at 5.7% y/y vs 5.3% y/y as expected for a very nice beat and retail sales followed the suit coming in at 8.2% y/y vs 8.2% y/y as expected. IMF cut China’s growth forecast for 2019 and 2020 to 6.2% and warned that economic activity may fall short of the expectations if trade tensions persist.

    The employment report for the month of December showed that employment change came in at 21.6k vs 18k as expected. The Unemployment rate fell to 5.0% and participation rate ticked down to 65.6%. All employment change came through part time employment which is concerning, however it shows that labour market conditions are tight. Preliminary PMIs for the month of January came in mixed. Manufacturing ticked higher to 54.3 while services went lower a lot to 51.0 thus dragging the composite lower to 51.5. Weak start for the Australian economy in 2019. Turns in Manufacturing can lead to turns in the Services by two months.

    This week we will have inflation data from Australia as well as PMI data from China.

    Important news for AUD:

    Wednesday:

    • -- CPI

    Thursday:

    • -- Manufacturing PMI (China)
    • -- Non-Manufacturing PMI (China)
    • -- Caixin Manufacturing PMI (China)

    Sunday:

    • -- Caixin Services PMI (China)


    NZD

    Services PMI for the month of December came in at 53.0 vs 53.5 the previous month. New orders sub index improved from November to 59.2 but activity/sales continued to drop and posted 52.2. Growth in the service sector has been slower over the past six months but this reading shows that growth is slowly stabilising and not deteriorating further.

    Inflation in Q4 surprised to the upside coming in at 1.9% y/y vs 1.8% y/y as expected. Uptick is more surprising given the weak credit card spending data from New Zealand from the last week. NZD reacted very favourably to the number and strengthened across the markets against various currencies.

    This week we will have trade balance data.

    Important news for NZD:

    Monday:

    • -- Trade Balance
    • -- Exports
    • -- Imports


    CAD

    Manufacturing sales for the month of November came in at -1.4% vs -1% as expected. Wholesale trade data came in at -1% vs -0.3% as expected. Misses on both fronts signalling a slowdown in the Canadian economy due to the slump in country’s oil sector and generally weaker economic growth. Retail Sales for the month of November disappointed coming in at -0.9% m/m vs -0.6% m/m as expected. Ex autos category came in at -0.6% m/m vs -0.4% m/m as expected. Consumer spending has slowed down in Canada noticeably.

    BOC Governor Poloz said in Davos that oil prices will contribute to a drop in GDP of 0.4bp. He emphasized the dangers of the trade war and concluded that it would be a disaster if it escalated. The Canadian economy is in good shape and the pace of future rate hikes will be data dependant. After this week’s retail sales data a rate hike will be pushed further in the future for sure.

    This week we will have GDP data as well as final PMI number.

    Important news for CAD:

    Thursday:

    • -- GDP

    Friday:

    • -- Markit Manufacturing PMI


    JPY

    Trade balance data for December came in at -JPY55.3 bn vs – JPY42.3bn as expected. Exports fell -3.8% y/y vs -1.8% y/y as expected for the sharpest fall in 2 years while imports rose 1.9% y/y vs 4% y/y as expected. Misses on all fronts showing that the trade war and global slowdown have impacted Japan’s exporters and that domestic demand is not as strong as expected. Exports to China came in at -7% y/y and they were the biggest contributor to export declines.

    BOJ left the interest rate unchanged and monetary policy unchanged as expected. The Median Core CPI forecast for the FY 2019/20 has been slashed down to 0.9% vs 1.4% projected in October. Median Real GDP forecast for fiscal 2019/20 is at 0.9% vs 0.8% as projected in October. Governor Kuroda stated that the drop in oil prices is the key reason for downgrades in the price outlook. He added that it is appropriate to continue with current easing policies and that he doesn’t see a big change in economic fundamentals.

    Tokyo area CPI came in at 0.4% y/y vs 0.2% as expected and CPI excluding food, energy came in at 0.7% y/y vs 0.6% y/y as expected. Positive beats for a much-needed rise in inflation to make BOJ encouraged.

    This week we will get minutes from the latest meeting of the monetary policy comity, consumption data, industrial production data and employment numbers.

    Important events for JPY:

    Monday:

    • -- BOJ Monetary Policy Meeting Minutes

    Wednesday:

    • -- Retail Sales

    Thursday:

    • -- Industrial Production

    Friday:

    • -- Unemployment Rate
    • -- Jobs to Applicants Ratio


    CHF

    SNB Zurbruegg assessed the outlook for the Swiss economy as favourable. He added that the situation on Forex market remains fragile and that heightened uncertainty, highly valued Frank, low inflation pressure and global low rates warrant expansive policy. SNB Machlear added that negative rates and market interventions are needed to prevent a rise in CHF. SNB Governor Jordan stated that they still have room to maneuver on interest rates and added that there is no need for any change to SNB monetary policy.

    This week we will have data on trade and consumption.

    Important news for CHF:

    Tuesday:

    • -- Trade Balance
    • -- Exports
    • -- Imports

    Friday:

    • -- Retail Sales
     
  5. katetrades

    katetrades TradersWay.com representative

    Joined:
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    Messages:
    36
    Likes Received:
    7
    Forex Major Currencies Outlook (Feb 4 – Feb 8)

    USD

    The US Congressional Budget Office lowered its estimates of the US fiscal deficit for the 2019 fiscal year. They now see the deficit at $897 billion compared to the $981 billion deficit in the April estimate. That's 4.2% of GDP instead of 4.6%. The cost of government shutdown has been projected at $11bn.

    FED has left rates unchanged at 2.25-2.50% as expected. Vote on keeping the rates on hold was unanimous. They stated they will be “patient” on future moves and that they are prepared to adjust any details for completing balance sheet normalization in light of economic and financial developments. Economic activity rising at “solid” rate (previously it was “strong” rate, downgrade from previous statement). Dovish statement sent USD quickly 50 pips down against the majors. FED moved from hawkish to neutral stance effectively halting any talks of raising rates.

    FED Chairman Powell stated in press conference that growth has slowed in foreign economies and noted the effects of the shutdown. He explained that FED has seen crosscurrents and conflicting signals so they decided for the “patient, wait and see approach”. He is satisfied with progress in balance sheet discussions but no exact number was stated since according to him FED is not at that point yet. FED thinks that the outlook is favourable in general. Continuation of the dovish statement sent stocks to the new highs.

    ADP employment change came in at 213k vs 175k as expected with 145k in services and 68k in the goods-producing sector. Job growth was seen in almost every industry with manufacturing adding the most jobs in more than four years. NFP headline number came in at 304k vs 165k as expected for a 100th consecutive month of job gains. Average hourly earnings came in at 3.2% y/y as expected and this is where the good news end since they came 0.1% m/m vs 0.3% m/m as expected. Previous NFP number was revised to the downside from 312k to 220k for a full 90k jobs.The unemployment rate rose to 4% due to the increase in participation rate to 63.2% vs 63% as expected. Underemployment rate rose to 8.1% vs 7.6% the previous month. Overall it is a mixed report that will send USD lower in the first few hours after its announcement.

    This week we will have PMI numbers and due to shutdown delayed factory orders data as well as trade balance data.

    Important news for USD:

    Monday:

    • -- Factory Orders
    Tuesday:
    • -- Trade Balance
    • -- Exports
    • -- Imports
    • -- Markit Services PMI
    • -- Markit Composite PMI
    • -- ISM Non-Manufacturing PMI
    EUR

    Consumer confidence for the month of January came in at -7.9 as expected while Economic, Industrial and Service confidence data have all decreased showing the declining confidence in Eurozone economy as a whole. German economy ministry has cut German 2019 growth forecast to 1% from 1.8% citing external risks, Brexit, trade conflicts and external tax environment, as main reasons for lower number. German retail sales for the month of December were abysmal coming in at -4.3% m/m vs 0.6% m/m as expected.

    Eurozone preliminary Q4 GDP came in at 0.2% q/q and 1.2% y/y as expected with the unemployment rate coming at 7.9% also as expected. Troubling sign is that preliminary Q4 GDP from Italy came in at -0.2% q/q vs -0.1% q/q thus showing negative GDP for the second consecutive quarter indicating that Italy slips into recession. Italy’s DiMaio has said that this contraction shows failure of previous governments. PM Conte said that recession is only temporary due to US-China trade war and that economy will recover in 2019.

    Final manufacturing PMI for the Eurozone came in at 50.5 as expected. Italy’s PMI came in at 47.8 vs 48.8 preliminary showing deeper plunge of Italian economy. Preliminary CPI for the month of January came in at 1.4% as expected with prior reading of 1.6% y/y. Core CPI came in at 1.1% vs 1% as expected. Rise in the core reading is encouraging, showing that inflationary pressures are still present.

    This week we will have final PMI data as well as consumption data from the EU along with industrial and trade balance data from Germany.

    Important news for EUR:

    Tuesday:

    • -- Markit Services PMI (Germany, France, EU)
    • -- Markit Composite PMI (German, France, EU)
    • -- Retail Sales
    Wednesday:
    • -- Factory Orders (Germany)
    Thursday:
    • -- Industrial Production (Germany)
    Friday:
    • -- Trade Balance (Germany)
    • -- Exports (Germany)
    • -- Imports (Germany)
    GBP

    Voting in Parliament ended with a mandate for PM May to return to Brussels to renegotiate the so-called “backstop” that aims to prevent a hard border between Northern Ireland and the independent Irish Republic. The EU was strict that it will not change the deal currently on the table. Manufacturing PMI came in at 52.8 vs 53.5 as expected. Purchase of stock volumes has reached record high of 56.3 signalling stockpiling ahead of Brexit number and without it the PMI number would be even weaker.

    This week we will have BOE interest rate decision followed by minutes from the MPC meeting and speech by governor Carney. It is expected that rate will stay unchanged so greater importance will be given to minutes and speech, that is where markets will look for more guidance. Additionally, every news regarding Brexit will be closely monitored.

    Important news for GBP:

    Monday:

    • -- Markit/CIPS Construction PMI
    Tuesday:
    • -- Markit/CIPS Services PMI
    Thursday:
    • -- BOE Interest Rate Decision
    • -- BOE MPC Meeting Minutes
    • -- BOE Governor Carney Speech
    AUD

    China’s industrial profits for the month of December came in at -1.9% y/y vs -1.8% y/y the previous month. Another data pointing to the slowdown in Chinese economy that will impact broader markets. Non-manufacturing PMI for the month of January came in at 54.7 vs 53.8 as expected. Composite PMI came in at 53.2 vs 52.6 as expected. Manufacturing PMI came in at 49.5 vs 49.3 as expected for the second consecutive month in contraction. Caixin Manufacturing PMI came in at 48.3 vs 49.6 as expected. Falling deeper into contraction territory with dropping output subindex signalling softer demand. New orders fell for the second consecutive month at a faster pace.

    Headline inflation numbers came in at 0.5% q/q vs 0.4% q/q as expected and 1.8% y/y vs 1.7% y/y as expected with prior reading showing 1.9% y/y. Trimmed mean, which is a core measure came in at 0.4% q/q and 1.8% y/y in line with the expectations. AUD was sent higher immediately on better than expected headline number and rise in iron ore prices.

    This week centre stage will be taken by RBA and their interest rate decision followed by rate statement. Rate is expected to stay the same so all eyes will be on the accompanying statement. Additionally, we will have data on housing, trade balance and consumption. We will also get monetary policy statement.

    Important news for AUD:

    Monday:

    • -- Building Approvals
    Tuesday:
    • -- RBA Interest Rate Decision
    • -- RBA Rate Statement
    • -- Trade Balance
    • -- Exports
    • -- Imports
    • -- Retail Sales
    Wednesday:
    • -- RBA Governor Lowe Speech
    Friday:
    • -- RBA Monetary Policy Statement
    NZD

    Trade balance data for the month of December came in at NZD264m vs NZD150m as expected with previous month showing deficit of NZD861m. Exports rose NZD5.4bn for a beat vs NZD5bn as expected. Imports came in lower than expected at NZD5.22bn. Exports have been growing for 5 consecutive months and this is the strongest reading since December 2017. However, although markets have embraced these numbers and pushed NZD higher annual trade deficit for 2018 is deficit of NZD5.9bn. S&P leaves NZ rating unchanged at AA but raises outlook to positive.

    This week we will have GDT auction as well as employment data.

    Important news for NZD:

    Wednesday:

    • -- GDT Price Index
    • -- Employment Change
    • -- Unemployment Rate
    • -- Participation Rate
    CAD

    November GDP figures came in at -0.1% m/m as expected and 1.7% y/y vs 1.6% y/y as expected. Raw materials price index came in at 3.8% m/m. Construction activity was down for the sixth consecutive month and came in at -0.3%. Along with the weaker retail sales it represents the biggest concern for Canadian economy. Manufacturing PMI came in at 53.0 vs 53.6 as expected. Wrong direction for the manufacturing but at least it is in the positives unlike with some European countries.

    This week we will have data on trade balance and employment as well as Ivey PMI.

    Important news for CAD:

    Tuesday:

    • -- Trade Balance
    • -- Exports
    • -- Imports
    Wednesday:
    • -- Ivey PMI
    Friday:
    • -- Employment Change
    • -- Unemployment Rate
    • -- Participation Rate
    JPY

    Meeting minutes for the December BOJ meeting saw members stating that it is appropriate to continue easing persistently and that CPI will likely gradually increase toward the target of 2%. Overall assessment was that "The Japanese economy is recovering at a moderate pace." Japan’s Cabinet Office has cut its evaluation of exports for the month of January citing the trade war between US and China as a main culprit.

    Retail sales for the month of December came in at 0.9% m/m vs 0.4% m/m as expected and 1.3% y/y vs 1% y/y as expected. Much needed beats on retail sales data. If the effects spill over to the inflation it can push it up in the right direction, towards the magical 2% level. Preliminary Industrial production reading for the month of January came in at -0.1% m/m vs -0.5% m/m as expected. Outlook is for it to rise to 2.6% m/m in February. Unemployment rate came in at 2.4% vs 2.5% as expected with Job-to-applicant ratio coming in at 1.63 as expected.

    This week we will have data on household spending, earnings as well as goods trade balance.

    Important news for JPY:

    Tuesday:

    • -- Nikkei Services PMI
    Friday:
    • -- Household Spending
    • -- Goods Trade Balance
    • -- Labour Cash Earnings

    CHF

    Trade balance data for the month of December came in at CHF1.9bn vs CHF4.74bn the prior month. Large drop in the main figure was caused by exports which fell 5% m/m. Imports rose 3.7% m/m. Drop in exports is worrying and indicates far fetching reach of global slowdown. Rise of imports is a positive thing indicating that domestic demand holds steadily.

    This week we will have employment data.

    Important news for CHF:

    Friday:

    • -- Unemployment Rate
     
  6. katetrades

    katetrades TradersWay.com representative

    Joined:
    Feb 11, 2013
    Messages:
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    Forex Major Currencies Outlook (Feb 11 – Feb 15)

    USD

    ISM Non-Manufacturing PMI came in at 56.7 vs 57.1 as expected. New export orders had a tumble from 59.5 to 50.5 showing that a slowdown abroad is taking place. This is the worst new export orders reading in two years. Although data came in worse than expected, the domestic situation is stable and the reading is much higher than across the globe (Europe, Australia, Japan, China, etc.). Trade balance data for the month of November came in at -$49.3bn vs -$54bn as expected.

    US Treasury secretary, Steven Mnuchin will visit China next week with US Trade Representative Lightihizer to continue trade talks. March 1 deadline is slowly creeping in on us and fear of US-China trade war escalations are mounting. Reports are coming that the Trump-Xi meeting will unlikely be held before the March 1 deadline. The Government could shut down again on February 15 if an agreement is not reached.

    This week we will have continuation of trade talks and possible renewal of government shutdown on Friday. We will get data regarding inflation, consumption, federal budget and inventories.

    Important news for USD:

    Wednesday:

    • -- CPI
    • -- Federal Budget Balance
    Thursday:
    • -- Retail Sales
    • -- Business Inventories
    Friday:
    • -- Possible Government Shutdown
    EUR

    Final Services PMI for the Eurozone for the month of January came in at 51.2 vs 50.8 preliminary. The number was pushed higher primarily by Spain’s number of 54.7. Spain remains the only bright spot. Italy dropped into contraction with reading of 49.7. Composite reading came in at 51 while new business index slid into contraction territory at 49.5 vs 50.7 the previous month. Retail sales for the month of December came in at -1.6% m/m as expected and 0.6% y/y vs 0.5% y/y as expected. Abysmal German number of -4.3% m/m has dragged down the retail sales.

    The European Commission cut economic projections for Eurozone. GDP growth in 2019 is seen at 1.3% vs 1.9% previously and 2020 GDP is seen at 1.6% vs 1.7% previously. Inflation for 2019 has also been slashed to 1.4% vs 1.8% previously. Germany, France and Italy are the main drags on the GDP growth domestically while global slowdown and trade tensions weigh in from the outside.

    This week we will have data on industrial production, employment change, trade balance and second estimate of Q4 GDP.

    Important news for EUR:

    Wednesday:

    • -- Industrial Production
    Thursday:
    • -- Employment Change
    • -- GDP
    Friday:
    • -- Trade Balance
    GBP

    Construction PMI for the month of January came in at 50.6 vs 52.5 as expected with prior reading being 52.8. This is a ten-month low reading as worries around Brexit mount on the construction activity. Services PMI came in at 50.1 vs 51 as expected and Composite PMI came in at 50.3 vs 51.4 as expected. Services reading is weakest since July 2016 and shows that uncertainty around Brexit causes a lot of disturbances in economic activity.

    BOE has left the bank rate unchanged at 0.75% as expected with a unanimous vote. They have cut GDP growth forecasts to 1.2% for 2019 and 1.5% for 2020; they were both previously projected at 1.7%. CPI is expected to fall below 2% in the following months but they expect it to be at 2.35% in one year’s time. They acknowledge that Brexit damage has increased causing volatility in the data hitting both the housing markets and consumers. A No-deal Brexit could mean substantial economic contraction.

    The UK PM May set herself a deadline of February 13 to re-negotiate the Brexit deal before the UK parliament will take over. They will most likely ask for a postponing of Brexit. UK government spokeswoman stated that the government intends to hold a parliament vote on February 14. Labour leader Corbyn sent a letter to PM May with five legally binding commitments that it would require to get support from his party. Tusk endorsed the letter which puts May in peculiar position. If she accepts, it may alienate her own party and if she brushes it off, it will show that the way was presented to her but she passed on it.

    This week we will have data on industrial production, investments, trade balance, first reading of Q4 GDP, inflation and consumption.

    Important news for GBP:

    Monday:

    • -- Industrial Production
    • -- Manufacturing Production
    • -- Business Investment
    • -- Trade Balance
    • -- GDP
    Wednesday:
    • -- CPI
    Friday:
    • -- Retail Sales
    AUD

    China Caixing Services PMI for the month of January came in at 53.6 vs 53.4 as expected. Composite number came in at 50.9 vs 52.2 the previous month showing that services activity continues to grow steadily while manufacturing sector struggles.

    Building approvals for the month of December came in at -8.4% m/m vs 2% as expected. This data is very volatile from month to month taking into consideration that number is -22.5% y/y -- this paints a very nasty picture for housing in Australia. Trade balance for the month of December shows a healthy surplus of AUD3681m vs AUD2225m. Unfortunately for the economy this larger than expected surplus was achieved with a fall in exports of 2% m/m and fall in imports of 6% m/m. Retail sales for the month of December came in at -0.4% m/m vs 0% m/m as expected. Another in the line of weak data coming from Australia.

    RBA has left cash rate unchanged stating that low rates support economy. Inflation remains low and stable and it is expected to pick up gradually, however no reasons were given as to why RBA expects an increase in the inflation. Household consumption remains a source of uncertainty. The labour market remains strong. Further falls in the unemployment rate to 4.75% are expected and wage growth is expected to pick up gradually over time. The global economy has slowed down and downside risks have increased. GDP and inflation projections have been cut. The lower inflation forecast was attributed to oil and core inflation will stay near 2%.

    RBA Governor Lowe stated that probabilities of next rate move “appear to be more evenly balanced”, meaning that there are scenarios where the next move is up and scenarios where the next move is down. If jobs and wages are rising it will be appropriate to raise rates, however if unemployment rises and inflation stalls, lower rates might be appropriate. Lower rates = lower AUD. A change in the tone from RBA in characterizing the next rate move as evenly balanced has sent AUD lower. Monetary policy has changed from a tightening bias to a more neutral stance. Markets are now pricing in a rate cut by the end of the year.

    This week China returns after Lunar New Year celebration so we will have data on trade balance and inflation. We will also have speech from assistant governor Kent.

    Important news for AUD:

    Thursday:

    • -- Trade Balance (China)
    • -- Export (China)
    • -- Import (China)
    • -- RBA Assistant Governor Kent Speech
    Friday:
    • -- CPI (China)
    NZD

    Building permits for the month of December came in at 5.1% m/m vs -2% m/m in the previous month. Number for the year is 9.8%.

    The employment report for Q4 showed rise in the unemployment rate to 4.3% vs 4.1% as expected. Employment change came in at 0.1% q/q vs 0.3% q/q as expected and 2.3% y/y vs 2.6% y/y as expected. The participation rate fell to 70.9% which is still high compared to other countries, however rise in unemployment and a drop in the participation rate are worrisome. A bright spot are wages with average hourly earnings coming in at 1% vs 0.8% as expected. An overall negative report since most data came in worse than expected and sent NZD tumbling down.

    This week we will have the RBNZ interest rate decision as a central event. Employment data will add to a more cautious tone from the RBNZ … softer outlook for activity, global growth risks. Hints of rate cuts may be on the table. We will also have data on electronic card retail sales, food inflation and manufacturing index.

    Important news for NZD:

    Monday:

    • -- Electronic Card Retail Sales
    Tuesday:
    • -- RBNZ Interest Rate Decision
    • -- RBNZ Rate Statement
    • -- RBNZ Monetary Policy Statement
    • -- RBNZ Press Conference
    Wednesday:
    • -- Food Price Index
    Thursday:
    • -- BusinessNZ Manufacturing Index
    CAD

    Employment change heavily beat expectations coming in at 66.8k vs 5k as expected. The jump in employment was mostly among the youth aged 15-24 and in the services-producing industry. Wholesale and retail trade were the main contributors. Unemployment rose to 5.8% vs 5.7% the previous month due to a rise in the participation rate to 65.6%. Both full-time and part-time jobs saw an increase with the former rising 30.9k and latter 36k. Monthly change came in at 0.4% for a very strong report showing tight labour conditions in Canadian economy. Building permits for the month of December came in at 6% m/m vs -1% as expected. Ivey PMI came in at 54.7 vs 59.7 the previous month.

    This week we will have trade balance data, monthly report from OPEC regarding oil and manufacturing sales.

    Important news for CAD:

    Monday:

    • -- Trade Balance
    • -- Exports
    • -- Imports
    Tuesday:
    • -- OPEC Monthly Oil Market Report
    Thursday:
    • -- Manufacturing Sales
    JPY

    Nikkei Services PMI for the month of January came in at 51.6 vs 51 the previous month due to a rise in domestic demand. Composite PMI fell to 50.9 vs 52 the previous month due to the fall in manufacturing activity. Household spending missed expectations coming in at 0.1% y/y vs 0.8% y/y as expected with prior reading showing -0.6% y/y. Labour cash earnings came in at 1.8% y/y vs 1.7% y/y as expected. Beat on the headline reading, however real cash earnings came in at 1.4% y/y vs 1.7% y/y as expected.

    This week we will have preliminary Q4 GDP data as well as data on industrial production.

    Important news for JPY:

    Thursday:

    • -- GDP
    Friday:
    • -- Industrial Production
    CHF

    The unemployment rate ticked up to 2.8% vs 2.7% the previous month, however the seasonally adjusted unemployment rate holds steady at 2.4% which is the lowest since 2002.

    This week we will have data on inflation.

    Important news for CHF:

    Monday:

    • -- CPI
     
  7. katetrades

    katetrades TradersWay.com representative

    Joined:
    Feb 11, 2013
    Messages:
    36
    Likes Received:
    7
    Forex Major Currencies Outlook (Feb 18 – Feb 23)

    Please note that President’s day is on Monday Feb 18, financial institutions will not be working therefore liquidity in the markets will be lower which can lead to volatile movements.

    USD

    CPI for the month of January came in at 1.6% y/y vs 1.5% y/y as expected with prior reading being 1.9% y/y and 0% m/m vs 0.1% m/m as expected. CPI excluding food and energy came in at 2.2% y/y vs 2.1% y/y as expected and 0.2% m/m as expected. Average weekly and hourly earnings have beaten the expectations coming at 1.9% y/y vs 1.4% y/y as expected and 1.7% y/y vs 1.3% y/y as expected respectively. Rise in wages is very encouraging for the US economy, however it is not sufficient enough to cause FED to consider immediate rate hikes. CPI has ticked a bit higher but monthly figure stayed unchanged due to the energy prices.

    US budget or the month of December shows higher than expected deficit of -$13.5bn vs -$11bn as expected. US fiscal 2019 year-to-date deficit is -$319bn versus comparable fiscal 2018 deficit of -$225bn. For the fiscal year to date, corporate income tax receipts are down -17.3%, individual tax receipts are down -3.5%. On the other hand Social Security receipts are up 6.1% while customs duties are up staggering 88.7%. Overall tax cuts introduced last year are dragging receipts lower and are not offset fully by receipts from the higher growth or cuts in spending. US national debt has risen to the record of $22 trillion.

    Retail sales for the month of December came in at -1.2% m/m vs 0.1% m/m as expected for the worst monthly reading since 2009. Control group reading came in at -1.7% vs 0.4% as expected which is the worst reading sine 2000. The reading was delayed due to the shutdown and it shows that holiday shopping has been done during Black Friday. The numbers are very bad and USD felt the pressure immediately losing its ground against all the majors. GDP projections for Q4 have been lowered due to the abysmal retail sales numbers. Atlanta FED sees it now at 1.5% vs 2.7% estimate on February 6. Industrial production came in at -0.6% m/m vs 0.1% m/m as expected. Bad releases keep on piling up. After few more bad releases questions about health of US economy will be raised.

    Compromise seems to have been reached to avoid another government shutdown. President Trump stated that he will sign the funding bill to keep the government open and then he would use executive action to declare a national emergency which will get him $8bn for a border wall. Chinese president Xi confirmed that trade negotiations will continue in Washington this coming week.

    This week we will have FOMC minutes from the latest FOMC meeting where FED opted for patience, durable goods orders for the month of December, due to shutdown that data was delayed, preliminary PMIs for the month of February and housing data.

    Important news for USD:

    Wednesday:

    • -- FOMC Minutes
    Thursday:
    • -- Durable Goods Orders
    • -- Markit Manufacturing PMI
    • -- Markit Services PMI
    • -- Markit Composite PMI
    • -- Existing Home Sales
    EUR

    Industrial production in EU continues to weaken coming in at -0.9% m/m vs -0.4% m/m as expected and -4.2% y/y vs -3% as expected. Year on year reading us the worst since 2009 bringing Eurozone back to the dark times.

    Germany’s preliminary Q4 GDP came in at 0% q/q vs 0.1% q/q as expected. Technical recession of two consecutive quarters with negative GDP has been barely avoided with Q4 GDP staying flat but the growth remain very weak and it is not encouraging for the EUR. Eurozone second reading of Q4 GDP came in at 0.2% q/q and 1.2% y/y as expected.

    This week we will have surveys on economic sentiment, consumer confidence and business climate as well as preliminary PMIs for the month of February along with final Q4 GDP data for Germany.

    Important news for EUR:

    Tuesday:

    • -- ZEW Economic Sentiment Indicator (Germany and EU)
    Wednesday:
    • -- Consumer Confidence Index
    Thursday:
    • -- Markit Manufacturing PMI (France, Germany and EU)
    • -- Markit Services PMI (France, Germany and EU)
    • -- Markit Composite PMI (France, Germany and EU)
    • -- Monetary Policy Meeting Accounts
    Friday:
    • -- GDP (Germany)
    • -- Ifo Business Climate (Germany)
    • -- CPI
    GBP

    Preliminary Q4 GDP figures came in at 0.2% q/q vs 0.3% q/q as expected. Main drag on the number was total business investment category which came in at -1.4% q/q vs -1% q/q as expected showing the reluctance of UK business to invest while uncertainties around Brexit hover in the air. This is the fourth straight quarter of falling business investments. Car production was another drag on GDP as it fell 4.9% q/q which is the worse result since Q1 2009. Industrial and manufacturing production as well as construction output all came in worse than expected and in the negatives adding more to the mounting Brexit pressures. Exports in the last quarter have risen 0.9% q/q vs 1/% q/q as expected and imports rose to 1.3% q/q vs 1% q/q as expected showing that domestic demand is still robust. Household spending kept the economy on the right path.

    CPI for the month of January came in at -0.8% m/m vs -0.7% m/m as expected and 1.8% y/y vs 1.9% y/y as expected. This figure is the lowest for two years and the Office for National Statistics attributed the drop to cheaper gas, electricity and petrol prices, partly offset by cheaper ferry tickets and air fares. Core CPI held steadily at 1.9% y/y. Retail sales came in at 1% m/m vs 0.2% m/m as expected and 4.2% y/y vs 3.4% y/y as expected. Positive beating was spurred by strong clothing store sales.

    Britain and Switzerland have signed trade continuity agreement which allows them to trade freely without any new tariffs. Meaningful vote on Brexit in the Parliament has been postponed by PM May and it is expected that it will be held on February 27.

    This week we will have data on employment and wages as well as continuation of Brexit negotiations.

    Important news for GBP:

    Tuesday:

    • -- Average Hourly Earnings
    • -- Unemployment Rate
    AUD

    Australian housing sector continues to worsen. Data on home loan approvals came in at -6.1% m/m vs -2% m/m as expected. This represents fourth straight month of falling home loan approvals and adds fuel to the speculations of rate cut toward the end of the year.

    Chinese trade balance data for the month of January came in at $39.16bn vs $34.3bn as expected. Exports rose 9.1% y/y vs -3.3% y/y as expected for a huge beat while imports came in at -1.5% y/y vs -10.2% y/y as expected. Due to lunar new year holidays there is some distortion in the figures so when the data for the February come out we will have a better picture. That being sad, exports coming in from China are very encouraging while imports although better than expected pose a bit of concern. Trade surplus with USA has dropped to $27.3bn vs $29.87bn the previous month with exports falling -2.4% y/y and imports collapsing staggering -41.2% y/y. Chinese CPI came in at 1.7% y/y vs 1.9% y/y as expected. Slowdown in food inflation was the main drag on inflation.

    This week we will have RBA meeting minutes from the last RBA meeting along with wage and employment data.

    Important news for AUD:

    Tuesday:

    • -- RBA Meeting Minutes
    Wednesday:
    • -- Wage Price Index
    Thursday:
    • -- Employment Change
    • -- Participation Rate
    • -- Unemployment Rate
    NZD

    RBNZ has left OCR unchanged at 1.75% as widely expected. With their new projections they see rate rising to 1.84% in December of 2020 and 2.36% in March of 2022. Annual CPI will be at 1.7% by March of 2020. Core CPI is expected to gradually rise to 2%. Continued supportive monetary policy is needed to raise CPI to 2% level. Next cash rate move could be up or down. Markets were prepared for dovish RBNZ and when they acknowledged that next rate move could be also up NZD was sent upwards. Manufacturing PMI for the month of January came in at 53.1 vs 55.1 the previous month. New orders sub index came in at 52.2 for a third consecutive falling month and lowest reading in past 13 months.

    This week we will have GDT auction and data on consumption at the end of the week.

    Important news for NZD:

    Tuesday:

    • -- GDT Price Index
    Sunday:
    • -- Retail Sales
    CAD

    Manufacturing sales for the month of December came in at -1.3% m/m vs 0.4% m/m. Unexpected drop in factory sales for the last month of 2018. This is second month in a row of negative reading and it sent CAD falling against majors including USD who had bad retail sales data published at the same time. Housing price index came in at 0% m/m as expected for another lacklustre data from Canada. Five consecutive months of flat readings for the index. Existing home sales came in at 3.6% m/m vs -0.6% m/m as expected.

    This week we will have data on wholesale, speech by governor Poloz and data on consumption.

    Important news for CAD:

    Thursday:

    • -- Wholesale Trade
    • -- BOC Governor Poloz Speech
    Friday:
    • -- Retail Sales
    JPY

    GDP data for the Q4 came in at 0.3% q/q vs 0.4% q/q as expected and 1.4% y/y as expected. GDP deflator which is an inflation measure came in at -0.3% y/y vs -0.4% y/y. Consumer spending was 0.6% q/q vs 0.7% q/q as expected and business spending was 2.4% q/q vs 1.8% q/q. Headline number is weaker than expected but it shows that Japan’s economy managed to recover after GDP being negative in Q3 due to natural disasters. Business spending was the main input in the GDP figure with a healthy beat of the expectations. Exports didn’t show expected recovery, mainly due to lower imports from China.

    This week we will have trade balance data, preliminary PMI for the month of February and national inflation data.

    Important news for JPY:

    Wednesday:

    • -- Trade Balance
    • -- Exports
    • -- Imports
    Thursday:
    • -- Nikkei Manufacturing PMI
    Friday:
    • -- CPI
    CHF

    January CPI came in at -0.3% m/m vs – 0.2% m/m as expected, however the core CPI jumped to 0.5% y/y vs 0.3% as expected which is a five-month high and it shows that core inflationary pressures are rising. However with global slowdown it is interesting to see how long will those pressures maintain.

    This week we will have data on trade balance as well as on industrial production.

    Important news for CHF:

    Tuesday:

    • -- Trade Balance
    • -- Exports
    • -- Imports
    Friday:
    • -- Industrial Production
     
  8. katetrades

    katetrades TradersWay.com representative

    Joined:
    Feb 11, 2013
    Messages:
    36
    Likes Received:
    7
    Forex Major Currencies Outlook (Feb 25 – Mar 1)

    USD

    FED’s Williams stated that rates are already at neutral level. It is a sign that the FED will be in no rush to hike. Policymakers are increasingly pointing to risks abroad as a justification to wait. That means that even months of positive US economic data may not be enough to put the Fed back on a hiking path. FOMC minutes showed that almost all FED officials were in favour of ending the balance sheet reduction before the year ends. Positive domestic outlook was emphasized along with concerns regarding soft European and Chinese growth.

    Durable goods for the month of December came in at 1.2% vs 1.7% as expected. Main drag was the non-defence ex-air component which came in at -0.7% vs 0.2% as expected. Philadelphia FED business index came in at -4.1 vs 14 as expected with new orders index and shipments plummeting to -2.4 vs 21.3 the previous month and -5.3 vs 12.3 the previous month respectively.

    This week’s main data will be the first reading of Q4 GDP. Atlanta FED lowered forecast from 1.5% to 1.4% due to weak durable goods and retail sales data. If the number surprises to the downside it could lead to USD weakness. Additionally, we will get data on housing, trade balance, PCE and final manufacturing PMI.

    Important news for USD:

    Tuesday:

    • -- Housing Starts
    • -- Building Permits
    • -- Consumer Confidence Index
    Wednesday:
    • -- Goods Trade Balance
    • -- Factory Orders
    • -- Pending Home Sales
    Thursday:
    • -- GDP
    Friday:
    • -- Final day of US – China trade war treat
    • -- PCE
    • -- Personal Spending
    • -- Personal Income
    • -- Markit Manufacturing PMI
    • -- ISM Manufacturing PMI

    EUR

    ZEW current situation survey for Germany came in at 15 vs 20 as expected with prior reading showing 27.6. This is the lowest reading since December of 2014 and it shows continued deterioration of the German economy. ZEW does not see chances for “rapid recovery” of slumping German economy. Economic sentiment showing expectations about the future of the economy improved slightly to -13.4 vs -15 the previous month for Germany and -16.6 vs -20.9 for the entire Eurozone, however those numbers are still in the negatives.

    Preliminary PMI reading for the Eurozone showed manufacturing PMI at 49.2 vs 50.3 as expected. Manufacturing dropped into contraction pushed by huge drop in German manufacturing PMI that came in at 47.6 with export orders component falling to lowest levels in over six years. Brexit, China slowdown and potential tariffs from US on German car makers all pushed the number down. Services PMI and composite PMI beat expectations coming in at 52.3 and 51.4 respectively. ECB minutes showed that EU growth could be below potential for several quarters and that although possibility of recession is low, levels of uncertainties are high. Market pricing for rate hike is accurate meaning that ECB is still on the path to raise rates this year.

    This week we will have data on sentiment and climate in EU, inflation, unemployment and final reading of manufacturing PMI.

    Important news for EUR:

    Wednesday:

    • -- Business Climate Indicator
    • -- Economic Sentiment Indicator
    • -- Consumer Confidence Index
    Thursday:
    • -- CPI (Germany and France)
    Friday:
    • -- Markit Manufacturing PMI (Germany, France, Spain, Italy and EU)
    • -- CPI
    • -- Unemployment Rate

    GBP

    Average weekly earnings for the month of December came in at 3.4% 3m/y vs 3.5% 3m/y as expected. The unemployment rate stayed at 4% as expected and employment change came in at 167k vs 151k as expected. An additional strong labour report coming from UK shows tight labour market conditions. Wage growth ticked a bit to the downside but it is not of a great concern. Due to the current circumstances this report falls second to the ongoing Brexit situation.

    Deadline for PM May to convince parliament members of her plan is February 26. Brexit debate continues on February 27. Reuters reported, citing EU diplomats, that Brexit formal text may be agreed in mid-March.

    This week we will have continuation of Brexit debate in the Parliament as well as manufacturing PMI data.

    Important news for GBP:

    Tuesday:

    • -- PM May presents her plan in the Parliament
    Wednesday:
    • -- Brexit debate continues
    Friday:
    • -- Markit Manufacturing PMI

    AUD

    RBA meeting minutes showed that significant uncertainties were seen by the board members and that the next rate move can be either up or down. There is no need for a near-term move in rates as current policy should allow for progress on unemployment and inflation. Outlook for consumption was characterized as “key uncertainty” for policy. Labour market data are stronger than other economic data and they noted that downside risks to global economy had increased with China growth slowing more than GDP figures show. With this statement RBA is taking more of “data dependent” approach, waiting for further clear signs before taking a firmer stance.

    Employment change for the month of January came in at 39.1k vs 15k as expected for a huge beat. Full time employment change came in at 65.4k which is a massive result. The unemployment rate stayed the same at 5% and participation rate ticked higher to 65.7%. Wage price index for Q4 2018 came in at 0.5% q/q vs 0.6% q/q as expected. RBA stated consumption as “key uncertainty” and this reading will not help. They want to see faster wage growth than this and see it spilling into consumption so it can spur economic growth. AUD was sent higher on the great jobs report and then Westpac came out with changes to its forecasts regarding the Australian economy and stated that they see two rate cuts in 2019. This immediately put a lot of pressure on AUD which was then pressured even more when Chinese port Dailan limited import of Australian coal as a response to Australia’s ban on Huawei.

    This week we will have PMIs from both China and Australia.

    Important news for AUD:

    Thursday:

    • -- Manufacturing PMI (China)
    • -- Non-Manufacturing PMI (China)
    • -- AIG Manufacturing Index
    Friday:
    • -- Caixin Manufacturing PMI (China)

    NZD

    Services PMI for the month of January comes in at 56.3 vs 53.2 the previous month. A healthy jump in the reading was provided by new orders and activity as well as drop in inventory. GDT price index rose 0.9% at the latest auction. This is the sixth consecutive auction with rising prices but rise was weaker than on any previous rising auctions.

    This week we will have trade balance data along with housing and business confidence data.

    Important news for NZD:

    Tuesday:

    • -- Trade Balance
    • -- Export
    • -- Import
    Thursday:
    • -- Business Confidence
    • -- Building Permits

    CAD

    Canadian retail sales for the month of December came in at -0.1% m/m vs -0.3% m/m as expected. Ex autos category came in at -0.5% m/m vs -0.3% m/m as expected. Better than expected reading but still in the negative. Lower oil prices are responsible for a large part of the decrease. Weaker sales at gasoline stations were largely to blame. Holiday season in Canada was weak and didn’t manage to propel retail sales into positive territory, thus confirming weakening contribution to GDP from households. Wholesale sales came in at 0.3% m/m vs -0.2% m/m as expected.

    This week we will have data on inflation and GDP along with manufacturing PMI.

    Important news for CAD:

    Wednesday:

    • -- CPI
    Friday:
    • -- GDP
    • -- Markit Manufacturing PMI

    JPY

    Governor Kuroda stated in his speech that they will react if JPY appreciation hurts the economy. They can react by buying more assets or lowering the rates. This more dovish approach pushed JPY lower across the markets.

    Trade balance for the month of January came in at -JPY1415.2bn vs -JPY1029.1 bn as expected. Exports plummeted -8.4% y/y vs -5.7% y/y as expected. Exports to China and Asia contributed most to the decline. Exports to China fell -17.4% y/y and will continue to decline in February due to the holiday period. Imports came in at -0.6% y/y vs -3.5% y/y as expected. Preliminary manufacturing PMI for the month of February came in at 48.5 vs 50.3 the prior month. This is the first time that data fell into contraction since August 2016. Output expectations turned negative for the first time in over six years. Slowdown in China presents itself as a main drag on the Japanese economy with both new orders and new export orders continuing to decrease.

    National CPI data for the month of January came in line with the expectation. Headline figure came in at 0.2% y/y and ex food, energy came in at 0.4% y/y. Inflation ex food, which is how Japan measures its core rate came in at 0.8% y/y vs 0.7% the previous month. Still a long way from targeted 2% and with recent global slowdown it doesn’t look like it will pick up any time soon.

    This week we will have data on consumption, industrial production, inflation from Tokyo area and unemployment.

    Important news for JPY:

    Thursday:

    • -- Retail Sales
    • -- Industrial Production
    Friday:
    • -- Tokyo CPI
    • -- Unemployment Rate
    • -- Jobs to Applicants Ratio
    • -- Nikkei Manufacturing PMI
    • -- Consumer Confidence

    CHF

    January trade balance figures came in at CHF3.04bn vs CHF1.9bn the prior month. Exports rose 0.6% m/m showing demand for Swiss goods outside Switzerland. Imports rose 4.8% m/m showing that domestic demand is still robust.

    This week we will have data on employment, GDP and consumption.

    Important news for CHF:

    Monday:

    • -- Employment level
    Thursday:
    • -- GDP
    Friday:
    • -- Retail Sales
     
  9. katetrades

    katetrades TradersWay.com representative

    Joined:
    Feb 11, 2013
    Messages:
    36
    Likes Received:
    7
    Forex Major Currencies Outlook (Mar 4 – Mar 8)

    USD

    Over the weekend President Trump has opted to postpone a tariff hike on Chinese imports stating that positive progress has been made in on-going negotiations.

    Housing starts for December came in at 1078k vs 1256k as expected with a drop of -11.2 m/m. This is the lowest number since September 2016. Dreadful housing data shows pains of the housing market in the US and gives more sign to the FED that they cannot continue with rate hikes. Consumer confidence came in at 131.4 vs 124.9 showing a strong belief in US economy by consumers and easing the worries from the end of 2018. Advanced goods trade balance came in at -$79.5bn vs -$73.9bn as expected for the record high deficit. Factory orders in December came in at 0.1% m/m vs 0.6% m/m as expected and revision lower to core durable orders from -0.7% to -1% adds further worry to a poor durable goods report.

    GDP for Q4 came in at 2.6% q/q vs 2.2% as expected and 3.1% y/y. GDP for 2018 was 2.9% which is highest since 2015. Personal consumption was 2.8% and business investment (capex) added 6.2% to GDP for a nice beat of the expectations. Inventories contributed as well to the GDP while Net exports subtracted from GDP less than expected. Regarding inflation data, the GDP price index came in at 1.8% q/q vs 1.7% q/q as expected with prior reading being 1.8% q/q and core PCE came in at 1.7% q/q vs 1.6% q/q as expected with prior showing 1.6% q/q.

    FED Chairman Powell reaffirmed a patient approach toward monetary policy in his testimony before Senate. He also added that FED sees favourable economic outlook with some cross-currents. Recent economic data has 'softened' but 2019 expected to be 'solid' although slower than 2018. There are some signs of stronger wage growth. The balance sheet reduction program could end by the year which is exactly what the markets’ want to hear.

    This week we will have more PMI data, housing and trade balance data with NFP on Friday as the prime event. The labour market is very strong in the US so it is expected for that trend to continue. Earnings will be of bigger importance as an increase in earnings leads to a higher standard of living and potentially can add to upward pressures on inflation.

    Important news for USD:

    Tuesday:

    • -- Markit Services PMI
    • -- Markit Composite PMI
    • -- New Home Sales
    • -- ISM Non-Manufacturing PMI
    • -- Federal Budget Balance
    Wednesday:
    • -- ADP Nonfarm Employment Change
    • -- Trade Balance
    • -- Exports
    • -- Imports
    • -- FED Beige Book
    Friday:
    • -- Nonfarm Payrolls
    • -- Unemployment Rate
    • -- Participation Rate
    • -- Average Hourly Earnings
    EUR

    Eurozone consumer confidence for the month of February came in at -7.4 as expected. Industrial confidence shows a decline while services, overall economic confidence and business climate indicator show a slight improvement. They are however all on the weak side showing a growth slowdown in the region. The unemployment rate has ticked down to 7.8% continuing its trend downwards. Preliminary CPI for the month of February came in at 1.5% y/y as expected, prior reading was 1.4% y/y. Core CPI however slipped to 1% y/y vs 1.1% y/y as expected. The rise in headline inflation can be attributed to rising oil prices, but fall in core CPI will give headache to ECB.

    This week we will have final PMI readings along with consumption data and third reading of Q4 GDP. Main event will be ECB interest rate decision followed by press conference. It is expected that interest rate will stay unchanged but language of the statement will be closely monitored since data coming in from EU lately has not been encouraging.

    Important news for EUR:

    Tuesday:

    • -- Markit Services PMI (EU, Germany, France)
    • -- Markit Composite PMI (EU, Germany, France)
    • -- Retail Sales
    Thursday:
    • -- ECB Interest Rate Decision
    • -- ECB Monetary Policy Press Conference
    • -- Employment Change
    • -- GDP
    GBP

    Meaningful vote in Parliament will be postponed until March 12 at the latest while PM May continues to seek concessions from the EU. If PM May’s deal doesn’t go through Parliament will seek to take control of the process. They will most likely ask for a delay in the process and remove No Deal Brexit from the table which will strengthen the GBP. PM May confirmed in parliament that a second meaningful vote will be held by March 12. If government loses the meaningful vote, a new vote on leaving the EU without a deal will be held. The UK will only leave without a deal on explicit consent of parliament. If parliament rejects deal and no-deal, a new vote will be held on March 14 to vote on limited Article 50 extension.

    This week we will have final services PMI data along with speech from governor Carney. Brexit talks will continue and they can have a high impact on GBP, however meaningful vote will be next week.

    Important news for GBP:

    Tuesday:

    • -- Markit Services PMI
    • -- BOE Governor Carney Speech
    AUD

    Construction work done in the Q4 of 2018 came in at -3.1% q/q vs 0.5% q/q as expected. A huge miss and continuation of the downward spiralling trend since Q3 was at -2.8% q/q. Expected bounce back in Q4 has not occurred. Total construction work has fallen for three quarters and other components of construction sector show multi-quarter falling trend. This data will have negative impact on Q4 GDP. Capex for Q4 came in at 2% q/q vs 1% q/q as expected suggesting positive investment outlook and it will partially offset abysmal construction data.

    Chinese Manufacturing PMI for the month of February came in at 49.2 vs 49.5 as expected for a third consecutive month of contraction (below 50). This is a three-year low. Since China is the main importer of Australian metals this reading is worrisome for AUD. Non-Manufacturing PMI came in at 54.3 vs 54.5 as expected and composite PMI came in at 52.4 vs 53.2 the previous month. Caixin Manufacturing PMI came in at 49.9 vs 48.5 for a hefty beat although barely in the contraction territory. New orders rose to 50.2, back into expansion.

    This week we will have very busy calendar for AUD. RBA interest rate decision will take centre stage. Rate is expected to stay unchanged so the text of the statement and speech by governor Lowe will be closely monitored for further guidance on monetary policy. We will also have housing, trade balance and consumption data as well as Q4 GDP. Additionally, we will have PMI, inflation and trade balance data from China.

    Important news for AUD:

    Monday:

    • -- Building Approvals
    Tuesday:
    • -- RBA Interest Rate Decision
    • -- RBA Rate Statement
    • -- Caixin Services PMI (China)
    • -- RBA Governor Lowe Speech
    Wednesday:
    • -- GDP
    Thursday:
    • -- Trade Balance
    • -- Exports
    • -- Imports
    • -- Retail Sales
    Friday:
    • -- Trade Balance (China)
    • -- Exports (China)
    • -- Imports (China)
    Saturday:
    • -- CPI (China)
    NZD

    Retail sales data for Q4 came in at 1.7% q/q vs 0.5% q/q as expected. This is the highest reading since Q1 of 2017 and it is an impressive beat, especially taking into consideration how poorly retail sales data were for other countries. Trade balance for the month of January came in at -NZD914m vs -NZD300m as expected. Exports came in lower than expected while imports were higher than expected resulting in higher than expected trade balance deficit.

    This week we will have bi-weekly GDT auction, manufacturing sales and consumption data.

    Important news for NZD:

    Tuesday:

    • -- GDT Price Index
    Thursday:
    • -- Manufacturing Sales
    Sunday:
    • -- Electronic Card Retail Sales
    CAD

    CPI for the month of month of January came in at 1.4% y/y vs 1.5% y/y as expected with prior reading being 2% y/y. CPI common, trim and core came in in-line with the expectations with first two coming at 1.9% y/y and core at 1.8% y/y. Q4 GDP came in at 0.4% q/q vs 1% q/q as expected and -0.1% m/m vs 0% m/m as expected. Horrible GDP data and it was released earlier so there was no immediate huge spike on CAD pairs but it continues to weaken across the boards. Business investment data show huge drop led by residential investment of -14.7%.

    This week we will have trade balance data and employment data on Friday which will be published at the same time as NFP data. BOC Rate decision is not expected to bring a rate change and we will see if the statement continues with hawkish tone after abysmal GDP data.

    Important news for CAD:

    Wednesday:

    • -- BOC Interest Rate Decision
    • -- BOC Rate Statement
    • -- Trade Balance
    • -- Exports
    • -- Imports
    Friday:
    • -- Employment Change
    • -- Unemployment Rate
    • -- Participation Rate
    JPY

    Retail sales for the month of January came in at -2.3% m/m vs -0.8% m/m. This is a huge miss and troubling data. If consumption continues to fall deeper into negative territory inflation will never reach target of 2%. Industrial production was also a big miss coming in at -3.7% m/m vs -2.5% m/m as expected for a third consecutive month of falling output. Data can be distorted in January and February due to Chinese Lunar New Year, however this is such a huge miss that it cannot be attributed solely to the usual distortions and it will certainly not deter BOJ from further easing.

    Headline inflation for Tokyo area came in at 0.6% y/y vs 0.4% y/y as expected. Core CPI came in at 1.1% y/y vs 1% as expected so at least inflation in Tokyo area is picking up. The unemployment rate ticked higher to 2.5% and the job to applicant ratio stayed at 1.63 as expected. Manufacturing PMI fell into contraction territory for the first time since August of 2016, coming in at 48.9. Output component fell most heavily to 47.7 from 54.4 in January.

    This week we will have final Q4 GDP reading as well as data on household spending and trade balance.

    Important news for JPY:

    Friday:

    • -- GDP
    • -- Household Spending
    • -- Current Account
    • -- Goods Trade Balance
    CHF

    GDP figures for Q4 came in at 0.2% q/q vs 0.4% q/q as expected with prior reading showing -0.3% q/q. Bounce back was softer than expected, but a technical recession was avoided since Q4 GDP came in positive. Retail sales number came in at -0.4% y/y vs 0.4% y/y as expected. Consumption continues to hinder economic confidence.

    This week we will have data on inflation and employment.

    Important news for CHF:

    Tuesday:

    • -- CPI
    Thursday:
    • -- Unemployment Rate
     
  10. TradersWay

    TradersWay TradersWay Representative

    Joined:
    Jan 7, 2015
    Messages:
    774
    Likes Received:
    17
    Forex Major Currencies Outlook (Mar 11 – Mar 15)

    USD

    ISM Non-Manufacturing index came in at 59.7 vs 57.4 as expected with prior reading showing 56.7. This is a strong result for the service sector lead by highest jump in new orders since 2005. Trade balance for the month of December came in at -$59.8bn vs -$57.9bn as expected. Trade deficit continues to widen and is the highest since October 2018. Exports have fallen -1.9% while imports have risen 2.1%. Goods deficit is -$81.54bn while services had a surplus of $21.77bn. US-China trade deficit came in at -$36.83bn vs -$37.86bn the previous month. December was the first month of tariff suspension.

    NFP number unpleasantly surprised everyone by coming at 20k vs 180k as expected. Government shutdown and extremely cold weather had an impact on the jobs market but it is yet to be discerned how much of this abysmal number is due to those two factors. The unemployment rate ticked down to 3.8% vs 3.9% as expected. Participation rate stayed the same at 63.2%. Average hourly earnings grew 0.4% m/m vs 0.3% m/m as expected and 3.4% y/y vs 3.3% y/y as expected. The broader U-6 unemployment rate takes discouraged people and those who want full-time jobs but work only part-time into account and it plunged to 7.3% vs 8.1% the previous month. Apart from the terrible headline number this is overall a very favourable report for US economy.

    This week we will have data on consumption, inflation, durable goods, housing and consumer sentiment.

    Important news for USD:

    Monday:
    • Retail Sales
    • Business Inventories
    Tuesday:
    • CPI
    Wednesday:
    • Durable Goods
    Thursday:
    • New Home Sales
    Friday:
    • Industrial Production
    • Michigan Consumer Sentiment
    • Michigan Consumer Expectations
    EUR

    Final services PMI for the month of February came in at 52.8 vs 52.3 as expected with all of the main countries showing expansion in services sector thus temporarily removing those dark clouds that hover above the EU economy. Retail sales came in at 1.3% m/m as expected for a nice bounce from -1.4% m/m the previous month.

    ECB has left key rates unchanged as expected but they have made changes to forward guidance regarding interest rates and announced new TLTROs (TLTRO III) that will start in September of 2019 and end in March of 2021. Full details of the new TLTRO will be announced in June. Governor Draghi stated that hikes will not be raised until December of 2019 although some members of the Governing Council believe that rate hike should be delayed until 2020. The slowdown is largely due to slower external demand but also country-specific factors. Risks to economic outlook is still tilted to the downside. ECB forecasts for 2019 GDP is now at 1.1% vs 1.7% in January and inflation in 2019 is now at 1.2% vs 1.6% the previous month. Big slashes in projections and since ECB already lowered projections in December, this is the second downgrade in less than 3 months. EURUSD has fallen below 2018 lows after Draghi’s presser.

    This week we will have data on industrial production and inflation.

    Important news for EUR:

    Wednesday:
    • Industrial Production
    Friday:
    • CPI
    GBP

    Markit construction PMI for the month of February came in at 49.5 vs 50.5 as expected. The reading dropped into contraction territory, housing and commercial projects are being delayed due to the ongoing Brexit situation. Services PMI came in at 51.3 vs 49.9 thus strongly pushing it away from contraction.

    Reports state that Attorney General Cox presented two ideas to EU’s Barnier regarding the Brexit deal and they were both rejected. Seems that PM May will face imminent defeat in Parliament.

    This week we will have data on industrial and manufacturing production, January GDP as well as trade balance. Additionally, we will have the meaningful vote that will put some clarity on further direction in the Brexit process, although it can cause a great volatility for GBP.

    Important news for GBP:

    Tuesday:
    • Meaningful vote in the Parliament
    • GDP
    • Industrial Production
    • Manufacturing Production
    • Trade Balance
    AUD

    Caixin Services PMI came in at 51.1 vs 53.5 as expected for a huge miss. Main culprit is the new businesses index which dropped indicating slowing growth in demand across the services sector. Employment measure also edged down but stayed in expansion. Trade balance for the month of February came in at CNY34.46bn vs CNY252.3bn as expected. Exports were down -16.6% y/y while imports came in at -0.3% y/y. These are awful numbers caused by the trade war, however due to the Lunar new year holidays in January and February data tends to be distorted.

    RBA has left rates on hold as expected with comment that low rates are supporting of the economy. They characterized the outlook for household spending and effect of falling housing prices as main uncertainties. Central scenario for underlying inflation is 2% in 2019, and 2.25% in 2020. Labour market remains strong and further fall in the unemployment rate to 4.75% is expected. Wage growth is expected to gradually pick up and central scenario for growth is around 3% this year. RBA continues with their story although data from Australia has constantly fell short of the expectations.

    Q4 GDP data came in at 0.2% q/q vs 0.3% q/q as expected and 2.3% y/y vs 2.6% y/y as expected for a big miss. Government spending and inventories were positives while negatives where household consumption, residential construction, business investments and exports. Markets are gradually pricing in a greater chance of a rate cut in the second half of the year with some banks preaching for 2 rate cuts in total of 50 bps with the first being in August.

    Trade balance data for the month of January came in at AUD4549m vs AUD2750m as expected. Exports rose 5% m/m while imports rose 3% m/m for the 13th straight month of surplus. However, AUD was hit by the weak retail sales data which came in at 0.1% m/m vs 0.3% m/m as expected. Although it is a decent bounce back from the prior month of -0.4% m/m.

    This week we will have housing data from Australia and consumption and industrial production data from China.

    Important news for AUD:

    Tuesday:
    • Home Loans
    • Westpac Consumer Confidence
    Thursday:
    • Retail Sales (China)
    • Industrial Production (China)
    NZD

    The commodity price index for the month of February came in at 2.8% m/m vs 2.1% m/m the previous month. Main contributors were dairy prices and GDT auction showed 3.2% rise in prices. This is the seventh consecutive auction of rising dairy prices which will bode well for exports and GDP figures.

    This week we will have data on Food Price Index which is expected to beat the expectations due to positive GDT auction and rise in dairy prices.

    Important news for NZD:

    Tuesday:
    • Food Price Index
    CAD

    Trade balance data for the month of December came in at -CAD4.59bn vs -CAD2.8bn as expected. This is the biggest trade deficit in at least 20 years. Exports have fallen for the fifth consecutive month and came in at -3.8% while imports rose 1.6%. Falling oil prices had a colossal impact on these abysmal numbers with export of energy products falling 21.7%. They can mean that Q4 GDP is very close to negative.

    BOC has left interest rate unchanged at 1.75% as was widely expected. BOC stated that recent data suggest that the slowdown in the global economy has been more pronounced and widespread than forecasted in January, trade tensions and uncertainty are weighing heavily on confidence and economic activity. BOC is projecting a temporary slowdown in late 2018 and early 2019, mainly because of last year's drop in oil prices, the slowdown in the fourth quarter was sharper and more broadly based. It now appears that the economy will be weaker in the first half of 2019 than projected in January.

    Canadian net change in employment came in at 55.9k vs 1.2k as expected for a healthy beat. The unemployment rate remained at 5.8% as expected. Hourly wage rate rose to 2.2% vs 1.7% as expected. Participation rate also rose to 65.8 vs 65.6 the previous month. Full-time employment change came in at 67.4k vs 0.8k as expected. More people were employed in professional, scientific and technical services; public administration; natural resources; and agriculture. Very strong report that will give BOC some comfort seeing that tight labour market conditions persist.

    This week we will have data on manufacturing sales.

    Important news for CAD:

    Friday:
    • Manufacturing Sales
    JPY

    Nikkei Services PMI came in at 52.3 vs 51.6 the previous month and composite PMI came in at 50.7 vs 50.9 the previous month. Services are in expansionary territory for 29 straight months. New businesses index rose 54.5 vs 52.1 the previous month. This is the highest since May 2013 and it pushed services higher. Drop in composite PMI is caused by drop in manufacturing PMI.

    Final GDP numbers for Q4 came in at 0.5% q/q vs 0.3% q/q preliminary and 1.9% y/y vs 1.4% y/y preliminary. GDP was pushed higher by rise in capex and household spending. Household spending came in at 2% y/y vs -0.5% y/y as expected for a huge beat. Current account showed a rise in surplus to JPY600.4bn boosted by lower than expected trade balance deficit which came in at -JPY964.8bn. Although trade balance deficit came in lower than expected it is still the largest in 5 years.

    This week we will have BOJ rate decision as the highlight of the week. There will be no changes in the bank rate so more emphasis will be placed on statement and press conference. We have had mixed data coming in from Japan so more clarification on monetary policy measures will be very welcomed. Additionally, we will have trade balance data.

    Important news for JPY:

    Friday:
    • BOJ Interest Rate Decision
    • BOJ Monetary Policy Statement
    • BOJ Press Conference
    • BOJ Governor Kuroda Speech
    • Trade Balance
    • Exports
    • Imports
    CHF

    CPI for the month of February came in at 0.4% m/m as expected for a nice rebound from -0.3% m/m the previous month, however core CPI has ticked down and came in at 0.4% y/y vs 0.5% y/y as expected. SNB's Zurbruegg says central bank is ready for Brexit and that they are prepared to take measures if needed. The unemployment rate came in at 2.7% as expected ticking down from 2.8% the previous month.
     

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