“Bulls make money, bears make money, but pigs get slaughtered” goes the old trading adage. However, Wall Street and longer dated Treasuries are mostly net higher on the quarter, having weathered the Fed rate hike and some uncertainties over the Trump agenda after the ACA failure. Confidence remains high heading into April, as reflected recent sentiment surveys, the labor market continues to strengthen, and manufacturing is improving further. Data will be in full swing this week and will help formulate outlooks for Q2. In Europe, intrigue will continue swirl around the ECB’s exit strategy. The opening stance on Brexit between the UK and EU predictably focused on a “Hard Brexit” by the latter, though negotiations won’t be start in earnest until after German elections in September.
United States: The U.S. economic calendar features the March jobs report Friday, which has suddenly come upon us again after sealing the deal on the March FOMC hike last month. March nonfarm payrolls are expected to increase by 200k vs 235k in February, with a 225k private payroll gain. Looking at the rest of the week, Markit PMI for manufacturing in March is due (Monday), along with March ISM manufacturing seen slipping to 57.0 from 57.7 and February construction spending expected to rise 0.8% vs -1.0%. The February trade deficit (Tuesday) is forecast to narrow to -$46.7 bln from -$48.5 bln, while MBA mortgage market report is due (Wednesday), accompanied by the March ADP employment report, which should post a 238k gain for the month, below the February figure of 298k. EIA energy inventories are also on tap. Initial jobless claims may retreat 14k to 244k (Thursday) for the April 1 week. In addition to the jobs report (Friday) will be the wholesale trade report and February consumer credit, expected to rebound to $18 bln vs $8.8 bln. FOMC minutes are due Wednesday from the FOMC’s March 14, 15 meeting that included the first rate hike of 2017. But the Fed also surprised with a less hawkish stance than was feared by the markets, especially with respect to the dot plot where the median estimate called for only two more tightenings in 2017, for a total of three.
Canada: A busy week begins with the BoC’s Outlook Survey (Monday), which expected to show increased optimism as the recovery maintains momentum. However, indicators of capacity should remain consistent with still ample spare capacity, while employment measures reflect ongoing slack in the labor market. The trade surplus (Tuesday) is projected to narrow to C$0.7 bln in February from C$0.8 bln in January. Building permit values (Thursday) are anticipated to grow 2.0% in February after the 5.4% gain in January. Employment (Friday) is seen rising 20.0k in March after the 15.3k gain in February. The unemployment rate is seen steady at 6.6%. Governor Poloz offered a cautious view of Canada’s economy, saying in effect that the recent few odd firm data point should not make us forget about the numerous downside risk surrounding the outlook for Canada’s economy. Hence, another run of firm data will not change our view that the Bank will hold policy steady at next week’s announcement (April 12) and though the first half of 2018. The Ivey PMI (Friday) is projected to improve to 57.0 in March from 55.0 in February.
Europe: The Brexit process has officially begun, but both sides have merely set down pretty much as-expected positions. For Eurozone markets, at least, the Brexit issue has been overshadowed by the conflicting voices coming out of the ECB council ahead of the April meeting. Draghi did leave the easing bias in place in March, but pressure to drop return to a more neutral stance is mounting as data suggests upside risks to Q1 GDP numbers. Draghi is still insisting that rates can go down further, national central bank heads continue to talk about tapering and the sequencing of exit steps. Draghi will have a chance to clarify the central bank’s stance when he speaks in Frankfurt on Tuesday and Thursday and the minutes of the March meeting (Thursday), should give some indication of the extent on the discussion on the forward guidance at the last meeting.Data releases this week include the final readings of March PMI surveys, with the manufacturing PMI (Monday) expected to be confirmed at 56.6 and the services PMI (Wednesday) at 56.6 Initial readings were better than anticipated and already pointed to an upside risk to Q1 GDP projections and German manufacturing orders (Thursday) and industrial production (Friday) for February will be watched carefully in that respect. The data calendar also has retail sales, German trade data and French production numbers.
UK: The focus will remain on the early stages of the Brexit process, though hard negotiations between the UK and the EU are not likely to start until after German elections in September. The data calendar this week is highlighted by the March PMI surveys. The manufacturing PMI (Monday) expected to come in with a headline reading of 54.9, up from 54.6. Improving global demand coupled with the benefits of post-Brexit vote sterling weakness is underpinning the sector. The services PMI (Wednesday) has us anticipating a near unchanged reading of 53.3 after 53.3 in the month prior. Industrial production for February is also due (Friday), which is expected to rise 0.2% m/m after the 0.4% m/m contraction in the previous month.
New Zealand: March QV house prices due Wednesday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Bund futures extended yesterday’s gains in opening trade, as DAX futures head south in tandem with U.S. futures after a largely negative session in Asia, where China and Taiwan remained closed for a holiday. Ongoing Yen strength is hitting exports and the RBA’s policy announcement, which left rates unchanged did little to cheer up the ASX. Investors continue to hold back ahead of the meeting between U.S. and China and FOMC and ECB minutes as well as U.S. jobs data at the end of the week. And with the European data calendar very quiet, Draghi’s speech is the only thing that could shake up things.
U.S. reports: revealed firm readings for March ISM and February construction spending, though we’re also seeing a 4% March drop in vehicle sales that trimmed our Q1 GDP growth forecast to 1.2% from 1.3%. For the ISM, there was only a small March drop to 57.2 from a 30-month high of 57.7 in February, and the jobs index surged to a 6-year high of 58.9 from 54.2. Robust producer sentiment readings is allowing the ISM-adjusted average of the major surveys to sustain the 57 cycle-high from February, and this combined with other robust soft-data signals upside risk for our 220k March nonfarm payroll estimate as discussed in today’s commentary. For construction, a 0.8% February bounce after upward revisions beat estimates, with strength in new home construction and improvement that likely reflected mild weather, though with weakness in nonresidential construction and a January upward public construction revision that trimmed recent gyrations.
Fedspeak: Fed’s Harker repeated 3 rate hikes would be appropriate in 2017, in his prepared remarks on Privately Issued Digital Money “Won’t Drive Out” Existing Currencies, assuming things stay on track. But he said, there’s no need to rush. The tightening should be gradual in pace and incremental. Inflation is moving slowly but surely higher, while unemployment is at or near its natural rate. Harker is a voter this year, but these leanings suggest no urgency. Fed dove Dudley also had a speech yesterday. Mr. Dudley stuck to the script on student debt, which he sees as one potential headwind to economic growth that “could help lower the equilibrium Fed funds rate.” He views rising college costs and student debt burdens as potentially inhibiting U.S. upward income mobility, while overall student loan debt could hurt U.S. homeownership and consumer spending. Other than the tangential reference to the equilibrium Fed funds rate, there’s not much here for the markets to trade. See his “Remarks at the Economic Press Briefing on the Household Borrowing, Student Debt Trends and Homeownership, Federal Reserve Bank of New York, New York City.”
Australia: The RBA left its cash rate at 1.50% and stuck with dovish guidance, as had been general expected following its April policy meeting. The statement by Governor Lowe noted improving global conditions, highlighting infrastructure spending and property construction in China, but noting that the domestic economy remains in transition following the end of the mining investment boom, with low wage growth persisting and underlying inflation seen rising only gradually. Lowe stuck with a focus on the Australian dollar, repeating that “an appreciating exchange rate would complicate” the economy’s transition phase. AUDJPY showing particularly sharp declines over the last couple of sessions. AUDJPY, which can be seen as a forex barometer of global risk appetite, is trading at levels last seen in early December. The RBA’s repetition of its desire to see the exchange rate remain a weaker level following its widely-expected decision to leave the cash rate at 1.50%, helped today weigh on the Aussies.
Main Macro Events Today
UK Construction PMI – The Construction PMI has as anticipating an almost unchanged reading of 52.4 after 52.5 in the month prior. ECB – ECB President Draghi will speak in Frankfurt where he will have a chance to clarify the central bank’s stance. US Trade Balance – February trade data expected to post a 7.2% improvement to a -$44.9 bln for the month from -$48.5 bln in January. The advance data on goods and service trade showed an improvement with that deficit narrowing to -$64.8 bln from -$68.8 bln in January. Canadian Trade Balance – The trade report, expected to show a slight erosion in the surplus to C$0.7 bln in February from C$0.8 bln in January. Energy exports are seen improving, as crude oil prices were modestly higher in February while natural gas prices were nearly flat on a month average basis. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
U.S. reports: China and Twaian were leading Asian markets higher after returning from holidays. Elsewhere gains were more muted and the Hang Seng is slightly in the red, as investors eye the Trump-Xi meeting. Bets on potential gains from the development of a so-called economic zone in Hebei province helped to lift China, while benchmarks in Japan and Australia fluctuated as currency advances weighted on exporters FTSE 100 futures are higher, but U.S. futures are in the red. Oil prices are up on the front end WTI future is trading at USD 51.38 per barrel. Released overnight the U.K. BRC shop price index was in line with expectations. The European data calendar still has final services PMI readings for the Eurozone, as well as the U.K. services PMI. Eurozone officials are once again trying to hammer out a deal with Greece that will allow the payment of the next aid tranche.
US reports: revealed stronger than expected trade deficit data and factory goods figures that closely tracked assumptions, leaving a net boost to our Q1 GDP growth estimate to 1.5% from 1.2%, after Q4 growth of 2.1%. For the trade deficit, we saw a February narrowing to $43.6 bln from a 5-year high of $48.2 bln, leaving a gap that was $1.4 bln narrower than indicated by the “advance” trade report after a $0.3 bln narrowing in January. For factory goods, the data matched estimates with lean February nondurable increases of 0.2% for shipments and orders and 0.1% for inventories. We saw only tiny tweaks in the durables data for orders, shipments, equipment and inventories that slightly lifted most levels.
ECB’s Liikanen: Strong monetary support still needed. The Governing Council member told Germany’s Handelsblatt, that “strong monetary support is still needed”, as the improvements seen so far are not big enough to “fundamentall” change the central bank’s guidance. Liikanen admitted that there were discussions at the last meeting and “there are a lot of opinions in the Governing Council”, adding that the statement did notice some improvements and tweaked some parts of the forward guidance, but added that the ECB “emphasized that interest rates will remain low beyond the end of asset purchases”. According to Liikanen that was “undisputed” although “there were discussions about what is meant by the words ‘current or lower levels’. The comments highlight the increasingly divergent views at the ECB as the central bank is starting to think about exit strategies and a phasing out of QE.
Canada: Canada’s February trade puts a damper on the Q1 GDP outlook, which was riding high after the stunning 0.6% m/m surge in January GDP lifted prospects for Q1 GDP to the 3.5% area. But the February trade balance sets up a sizable drag on Q1 growth from net exports. USDCAD revealed little immediate reaction to the twin Canada/U.S. trade reports, where the U.S. deficit narrowed more than expected, and the expected Canadian surplus turned to a deficit. The pairing has since rallied to new three-week highs of 1.3456 however, even as oil prices move to session highs near $50.70. The Canada trade report has thrown cold water on expectations for Q1 GDP, apparently to the detriment of the CAD.
Main Macro Events Today
FOMC – FOMC minutes are due today from the FOMC’s March 14, 15 meeting that included the first-rate hike of 2017. UK Service PMI – The services PMI has us anticipating a near unchanged reading of 53.3 after 53.3 in the month prior. EU Service PMI – The Eurozone services PMI expected to stay unchanged at 56.5, while Germany’s expected to stay unchanged as well at 55.6. ADP Employment & ISM Non-Manuf. PMI – The MBA mortgage market report will be released today, accompanied by the March ADP employment report, which should post a 187k gain for the month, below the February figure of 298k. Markit services PMI are due, alongside ISM Non-Manufacturing index seen easing to 57.0 in March vs 57.6. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
U.S. reports: Bund futures moved higher in after hour trade yesterday after the Fed minutes showed that the Fed discussed scaling back its balance sheet later in the year, which knocked U.S. stocks off highs and weighed on markets in Asia. The Nikkei is down -1.45%, ASX and Hang Seng is also in the red as are U.K. stock futures. The DAX already underperformed yesterday and is likely to continue to head south against that background, which will underpin European bond futures and keep a lid on yields. Investors also remain cautious ahead of the Trump Xi meeting. In Europe, the ECB will release its minutes and ECB President Draghi will speak at the opening of a conference, with markets looking for clues on the state of the debate on the future of asset purchases and the assessment of Nowotny’s call to hike the deposit rate ahead of the end of QE. Data releases include Swiss inflation data and Eurozone retail and construction PMIs.
US reports: 263k March ADP rise beat 187k estimation, following a trimming in the February ADP rise to 245k (was 298k) that narrowed the gap to the 227k private payroll increase in that month. There was a surprisingly large 82k March goods employment gain with outsized increases of 49k for construction and 30k for factories that explained the March overshoot, alongside a 4k rise for mining and an expected 181k service employment gain. The ADP figures overshot private payrolls by a whopping 71k in February, after overshoots of 25k in January, 3k in December, 38k in November, and 15k in October to leave an average overshoot since the October methodology change of 30k, hence diminishing the significance of today’s 38k overshoot of our March nonfarm payroll estimates. Additionally,the U.S. ISM-NMI drop to a 5-month low of 55.2 reversed the February climb to a 16-month high of 57.6 in February from 56.5 in January, while declines in the employment and new order components allowed a drop in the ISM-adjusted reading to a 7-month low of 53.9 from a 16-month high of 56.5 in February and 54.8 in January.
FOMC minutes: “most” participants could see a change in the reinvestment policy later in the year, but views were mixed on how and when the changes would occur. The minutes to the March 14, 15 FOMC meeting also indicated “many” emphasized that shrinking the size of the balance sheet should be done in a “passive and predictable manner.” Also, both Treasuries and MBS should be a part of the reinvestment changes. But, there was also discussion of costs and benefits of phasing out or ceasing all at once the reinvestment of principal. Meanwhile, on interest rates, nearly all officials thought the U.S. was at full employment. Overall economic risks were generally balanced, but many saw upside risk to the economy from fiscal policy. There were various views on the extent of labor market slack, as well as how close inflation was to the 2% goal. And while there were no clear indications that policymakers were ready to pull the tightening trigger again as soon as May, there weren’t any signs the FOMC was ready to abandon its tightening path either.
Germany: Feb manufacturing orders rose 3.4% m/m, slightly less than anticipated, but with January revised up to -6.8% m/m from -7.4% m/m, the annual rate nevertheless jumped to 4.6% y/y. Domestic orders rebounded strongly from the slump at the start of the year, while export orders stagnated as a dip in orders from other Eurozone countries, the second in a row, counterbalanced a rise in orders from non-EMU countries. All in all broadly in line with expectations, and together with confidence data confirming that the recovery remains on track, which adds to Weidmann’s calls for a phasing out of asset purchases.
Main Macro Events Today
ECB – ECB president Draghi will speak in Frankfurt today, while and the minutes of the March ECB Monetary Policy Meeting Accounts are also today as well. Trump-Xi – Chinese President Xi Jinping will visit Florida to meet President Trump, with the President saying North Korea will be high up on the agenda. US Unemployment Claims – Initial jobless claims may retreat 8k to 250k for the April 1 week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are mixed with Japan outperforming. Risk aversion spiked after a U.S. missile strike in Syria and a strong Yen weighed on exporters, but the Nikkei managed to bounce back and is up 0.41% on the day, with Japan Petroleum Exploration Co. rising strongly as crude oil prices jumped above USD 52 per barrel. The Hang Seng is down -0.64% and CSI and ASX are little changed, while U.S. and U.K. stock futures are heading south amid a fresh bout of risk aversion. This should keep Bund and Gilt futures underpinned going into the weekend. Trump hailed a new “friendship” with China’s Xi in the early hours of their meeting. The European calendar has German trade and production data at the start of the session. France and the U.K. also release production numbers and markets will be looking ahead to U.S. nonfarm payroll numbers in the afternoon.
President Trump uncorked a salvo of 50-60 missiles on an airbase in Syria in retaliation for the Assad chemical attack on his own citizens, which was apparently launched from that same base. Trump says he’s calling on all nations to seek the end of slaughter and bloodshed in Syria. It certainly serves as a warning shot to the Syrian regime and others that the new administration plans to back up its words with force, but comes at an awkward time in Russo-U.S. relations while meeting with the Chinese Premier in Florida. The risk averse yen rallied in wake of the strike, while gold shot over $1,260 and the T-note yield plunged from 2.35% to 2.30% before finding support. .US. informed Russia in advance of airstrikes on the Shayrat Airfield and did not target areas of the base where Russian forces were believed to be present, according to Secretary of State Tillerson. He warned that Russia failed to carry out a 2013 agreement to secure Syrian chemical weapons, and that Moscow was “either complicit or incompetent in its ability to carry out the agreement.” Tillerson said the strike was proportionate after a high degree of confidence that Sarin nerve gas was used in a chemical weapons attack.
US reports: The 25k U.S. initial claims plunge to 234k in the first week of April extended a 2k drop to 259k to leave claims back near the 44-year low of 227k in the President’s Day week. Despite the early-March pop, claims have remained below the 2016 average of 263k in every week of 2017. We have a late-Easter this year on April 16, versus an early-Easter last year on March 27, and this may be adding volatility to the March-April claims figures.
German production data much stronger than expected, with overall production rising 2.2% m/m in February from. German trade surplus widens as imports decline. Germany posted a sa trade surplus of EUR 21.1 bln in February, up from EUR 18.9 bln in the previous month, as export growth slowed down to 0.8% m/m from 2.4% m/m and imports dropped -1.6% m/m after rising 2.8% m/m in January. This is nominal data, that has been heavily impacted by oil price developments and import prices, but data are pointing to a rise in net exports in the first quarter of the year, at least on a nominal basis.
Main Macro Events Today
US Employment – March employment data should reveal a 180k headline for the month. This compares to 235k in February and 238k in January. The unemployment rate should hold steady at 4.7% from February, down from 4.8% in January. The balance of risk is to the upside as producer sentiment, consumer confidence and initial claims data all remained strong in March. Canada Employment – Employment, expected, to 5.0k in March after the 15.3k gain in February. The unemployment rate is seen at 6.7%. Governor Poloz offered a cautious view of Canada’s economy, saying in effect that the recent few odd firm data point should not make us forget about the numerous downside risk surrounding the outlook for Canada’s economy. BOE – BoE Gov. Carney is due to speak at Thomson Reuters in London. UK Manufacturing Production – Manufacturing production for February is also due today, which expected to rise 0.3% m/m after the 0.9% m/m contraction in the previous month. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Geopolitical risks will add to edgy market tone. The markets were fairly resilient to news of the U.S. missile strike on a Syrian airbase, on top of a soft March jobs report. But after knee-jerk risk-aversion trades, the focus shifted back to the bearish implications of the FOMC minutes where the discussion of balance sheet normalization suggested a more hawkish Fed stance versus the view of a “dovish tightening” on March 15th. Lots will be in play this week. Traders will look to gauge the global reaction and fallout from Syria, while inflation and production data highlight the economic calendar. Easter holidays will quiet trading into the weekend.
United States: U.S. markets were whipsawed Friday by the surprise news of the missile strike on Syria and the much weaker than expected jobs report, while late afternoon comments from NY Fed’s Dudley knocked bonds and stocks lower. Syria sparked flight to safety, risk aversion trade, which saw bond yields and stock prices dive. But, Dudley’s remarks that suggested a potential delay in rate hikes once balance sheet normalization began would only be a “little” pause, started a selloff and Treasury yields bounced closed at session highs. This week’s economic calendar is light, with key reports not out until Friday, where the markets will be closed for Good Friday. Hence calendar doesn’t come into focus until the end of the week when March CPI and retail sales will be reported. CPI is expected to be flat in March after edging up 0.1% in February. Retail sales for March are also expected to be unchanged following the 0.1% gain in February, due to weakness in gas and autos. The preliminary April consumer sentiment index from the University of Michigan survey is also on tap (Thursday). Confidence is projected to have bounced to 97.5, after edging up to 96.9 in March from February’s 2.2 point drop to 96.3. Other data during the week includes February JOLTS job openings, along with the NFIB small business survey (Tuesday), trade prices for March, along with the Treasury budget (Wednesday), as well as weekly initial jobless claims and March PPI (Thursday).
Fedspeak: Fed Chair Yellen will be on tap (Monday) when she will speak at the University of Michigan Ford School of Public Policy. She will also take questions, and it’s likely she’ll be asked to expound on normalization of the balance sheet, as well as the Fed’s rate path. The dovish voter Kashkari will participate in a Q&A session (Tuesday). And the centrist-hawk Kaplan will speak (Wednesday).
Canada: The BoC’s announcement and Monetary Policy Report (MPR) dominate the domestic proceedings this week. The announcement (Wednesday) is expected to reveal no change in the current 0.50% policy setting alongside a cautiously constructive take on the growth and inflation outlook. Economic data is confined to just a few releases, but they are of interest. Housing starts (Monday) is expected to show a 210.0k growth rate for March, which would be little changed from the firm 210.2k rate in February. The manufacturing survey (Thursday) should show a 1.0% drop in shipment values during February after the 0.6% gain in January. A broad-based 2.4% plunge in February export values underpins our manufacturing shipment estimate. The new home price index (Thursday) is anticipated to rise 0.2% m/m in February after the 0.1% increase in January. The Teranet/National Bank housing price index for March is due Wednesday. Markets are closed Friday for the Good Friday Holiday.
Europe: The focus this week will be mainly on the final March inflation numbers. The initial readings came in lower than anticipated, but were impacted by the later timing of Easter this year, which also means holiday related prices should pick up later. So, the expected confirmation of German HICP (Thursday) at 1.5%, the French at 1.4% and the Italian at 1.3% y/y does not change the overall view that inflation is trending higher against the background of ongoing growth and improvements in labor markets. The highlight of the week is German April ZEW Investor Confidence (Tuesday) expected to rise to 13.2 from 12.8, with geo-political risk factors, the prospect of further Fed tightening, and the ECB’s discussions on rates tapering expected to weigh on sentiment and prevent a more pronounced improvement. Other releases include Eurozone production numbers (Tuesday), while Germany sells EUR 3 bln of 10-year Bunds (Wednesday).
UK: The calendar this week is highlighted by March inflation data (Tuesday) and employment numbers covering February and March (Wednesday), along with the March BRC retail sales survey (Thursday).
Japan: The February current account surplus (Monday) is expected to widen to JPY 2,500.0 bln, from 65.5 bln in January. February machine orders (Wednesday) are penciled in at up 3.0% versus the 3.2% decline in January. March PPI meanwhile (Wednesday) is forecast to heat up to 1.3% y/y from 1.0% in February. Revised February industrial production is due Friday.
Australia: Australia’s calendar is headlined by the Reserve Bank of Australia’s Financial Stability Review (Thursday), which is published twice a year. Economic data features March employment (Thursday), expected to show a 10.0k rebound in total jobs following the 6.4k decline in February. The unemployment rate is projected at 5.9%, matching February. A 1.0% gain in housing finance (Monday) is anticipated for February after the 0.5% improvement in January.
New Zealand: New Zealand’s calendar is again sparse. Retail card spending (Tuesday) is of some interest however, as spending is seen rebounding 0.3% m/m in February after the 0.6% decline in January that was the first pull-back in five months.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets mostly headed south with Nikkei and Topix under pressure as a stronger Yen dragged down exporters and financials. Australia’s ASX was a notable outperformer in Asia. U.S. and European stock futures are also in the red, and oil prices have corrected from levels above USD 53 per barrel with the front end Nymex future currently trading at USD 52.95. Already released U.K. BRC retail sales data came in weaker than expected and showed like for like sales down -1.0%. Still to come the European calendar has German ZEW investor confidence as well as U.K. inflation data and Eurozone production numbers.
Fed Chair Yellen said it’s appropriate for the Fed to gradually raise rates if the economy continues to perform as expected, reiterating a long-standing policy view. She added that the economy is “pretty healthy.” She expects the economy to continue growing at a moderate pace. The global economy is also operating in a more robust way. Inflation is also reasonably close to the FOMC’s target. She noted the drop in the unemployment rate to 4.5% in the March report, and said inflation is reasonably close” though still a little under the 2% goal. The 5-year price measure does show price expectations ticking up however. Most on the FOMC don’t believe inflation is a significant problem at all. So far she hasn’t revealed anything new, nor has she discussed the balance sheet.
White House statements on Syria form the loose outlines of a policy in the region, suggesting that more strikes are possible and containing the Islamic State offers the greatest potential to provide relief to Syria’s citizens. ISIS’ defeat would bring about conditions for new leadership in Syria through the political process. The DoD meanwhile claimed that U.S. missile strikes destroyed 20% of Syria’s operational aircraft. Reality may be a bit more complex, however, since Syria’s Assad is also fighting ISIS, however reprehensible his attacks on his own people. There’s also no room for mistakes, with Russian personnel and equipment on the battle field. Market risk aversion remains elevated and volatility higher, but there’s been limited immediate reaction to these headlines. Oil and gold are settling near the highs of the month.
Melenchon overtakes Fillon in latest French poll. The latest Ifop poll for the first round of the French Presidential election April 23 confirms the trend already seen yesterday, namely that Le Pen and Macron are falling back, while leftist EU critic Melenchon is catching up. The Ifop poll today showed Le Pen and Macron down 2.5% points compared to the last poll at 24% and 23% respectively. Decisively though, unlike the polls so far Fillon is no longer in third place, but leftist EU critic Melenchon has overtaken him and is now polling 19%. So far nothing has changed and Macron and Le Pen are set to go through to the second round, where Macron is tipped to win with a large margin. However, is Melenchon also manages to overtake Macron, the contest would be between two EU critics from either side of the spectrum, difficult to call and poison for markets. French yields already blew out yesterday and are likely to remain under upward pressure ahead of the election.
Main Macro Events Today
UK Inflation – Consumer prices expected to come in at 2.3% y/y, unchanged from February. Producer Prices input expected to fall to 3.3% from 3.7% on February.
German ZEW – A slight rise is expected in the headline ZEW expectations reading to 14.0 from 12.8, with geo-political risk factors, the prospect of further Fed tightening, and the ECB’s discussions on rates and tapering expected to weigh on sentiment and prevent a more pronounced improvement.
FOMC – The dovish voter Kashkari will participate in a Q&A session, at the Minnesota Business Partnership, in Minneapolis.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Japanese stocks headed south in Asia overnight, with the Nikkei losing more than 1% as the Yen strengthened and risk aversion continues to weigh on markets. Once again exporters and financials were mostly hit. Other Asian markets are narrowly mixed, U.K. futures are slightly higher, but U.S. futures are also down. Geo-political concerns continue to weigh on sentiment and curtail risk appetite, which is also pushing out Eurozone spreads, with French markets also jittery ahead of the Presidential election as leftist EU-critic Melenchon continues to catch up in the polls. Oil prices continue to climb and the front end Nymex future is trading at USD 53.51 per barrel. The European calendar has April inflation data from Spain and Portugal as well as U.K. labour market data.
US reports: U.S. Jobs openings climbed 118k in February to 5,743k, from a revised 86k increase in January to 5,625k. The rate was edged up to 3.8% from the 3.7% that had been in place for months. However, the rest of the report was on the weaker side. Hiring’s declined 110k to 5,314k following the 121k increase in January to 5,424k. The rate slipped to 3.6% from 3.7%. Quitters also declined, falling 102k to 3,084k after surging 101k to 3,186k. The rate fell to 2.1% from 2.2%. The slippage in some of the January data are consistent with the downward revisions seen in Friday’s employment report. But the data are still in line with a solid jobs environment.
Eurozone industrial production dropped -0.3% m/m in February, largely due to a -4.7% m/m decline in energy production, which came after a 2.0% m/m rise in January and to a large extend reflects weather conditions over the first two months of the year. The unexpected contraction doesn’t necessarily mean a slowdown in underlying growth conditions and the annual rate bounced back to 1.2% y/y from just 0.2% y/y reported initially. Confidence numbers though have been encouraging and still suggest that the recovery continues, even if weather and Easter effect are likely to distort GDP numbers over the first two quarters of this year.
German ZEW investor confidence jumps to 19.5 in April, from 12.8 in March. The stronger than expected reading lifted the 3 months’ trend rate for the first time since January and with the current conditions indicator also improving the data suggests that the German recovery remains on track.
Main Macro Events Today
BOC Policy Report and Rate Statement – No change in the 0.50% rate setting is expected in today’s announcement, along with a modestly improved growth and inflation outlook that is tempered by ample caution amid still elevated downside risk to the economy. UK Unemployment Rate – The jobs report expected to show the unemployment rate also remaining unchanged at 4.7%. President Trump – President Trump is going to give an interview on Fox Business Network at 10 GMT, regarding healthcare, tax reform and Syria issue. US Crude Oil Inventories – Expected to fall to -0.7M from 1.6M last week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets were mostly down, with ASX and Nikkei selling off as risk aversion continues to dominate. This also saw Eurozone spreads widening again, although French election jitters at least seem to have eased, which is helping French bond spreads to come in again. Today’s calendar should be bond friendly, with final March inflation data from Germany, France and Italy to confirm the marked deceleration already evident in the preliminary numbers. However, base effects from the later timing of Easter a largely to blame, so the underlying uptrend remains intact, even if core is still to low for Draghi’s liking.
US reports: The firm round of March U.S. trade price data followed mostly upward prior revisions, despite the expected March petroleum import price drop and a strong dollar, leaving a clear uptrend in U.S. trade prices since the oil price trough in February of 2016. Price strength remains skewed toward exports, as seen through most of 2016, after the opposite pattern temporarily emerged in January. The data signal modest upside risk for the remaining inflation reports for March. Import prices have mostly received a lift over the past year from oil prices, though we’re seeing an additional lift from recovering growth abroad and the inventory upturn, alongside OPEC production restraint.
German March HICP inflation was confirmed at 1.5% y/y, unchanged from the preliminary number and down from 2.2% y/y in February. Base effects from energy prices, but also the later timing of Easter are a key reason behind the drop back below the ECB’s 2% limit. The Easter effect meant holiday related prices including package holidays, flights and some services prices related to holidays pick up later this year compared to 2016, when Easter fell into March, so while the headline rate fell back in March this year, it is already set to pick up again in April. The underlying trend is also pointing higher and with rents picking up and the labour market very tight, the risk of a broader rise in prices including second round effects is also rising. No wonder then that Bundesbank President Weidmann continues to argue that the time to think about a phasing out of QE and a return to a neutral stance on rates has come.
Bank of Canada: The announcement, MPR and press conference provided the usual hefty helping of growth, inflation and risk projections/assessment. The BoC held rates steady at 0.50%, matching widespread expectations. Their outlook for growth and inflation was modestly upgraded but still laced with caution, as they remained “mindful of the significant uncertainties weighing on the outlook.” Despite the upbeat domestic data since January and a strengthening and broadening in global growth, the Bank was clear that “material excess capacity remains.” While the Bank did upgrade the growth and inflation outlook, uncertainty remains elevated and Poloz said the Bank is “neutral” in terms of rate cuts or hikes. The Governor said rates are “at the appropriate level given what we see.” Indeed, “The data speak, but the data have not been uniformly positive” but much better than they were for the past year. He reminded that we had a similar run of data last year, and it gave way to things flattening out last year. So “It is right for us to remain cautious.”
Main Macro Events Today
Us Prelim UoM Consumer Sentiment – The preliminary April consumer sentiment index from the University of Michigan survey is on tap. Confidence is projected to have bounced to 97.5, after edging up to 96.9 in March from February’s 2.2 point drop to 96.3. Canada NHPI and Manufacturing Sales – The manufacturing survey should show a 1.0% drop in shipment values during February after the 0.6% gain in January. The new home price index is anticipated to rise 0.2% m/m in February after the 0.1% increase in January. US PPI and Unemployment Claims – Weekly initial jobless claims (expected at 245K) and March PPI (expected at 0.0%) are also on tap today. BOC Gov Poloz – BOC Gov Poloz will give a speech today in Ottawa along with Senior Deputy Governor Carolyn Wilkins. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Bund and Gilt futures lost some of their earlier gains during the European PM session, as stock markets moved up from lows. Yields are also up from lows, but the Bund yield is still down -0.8 bp on the day and the Gilt down -1.2 bp as stock markets remain in negative territory. Risk aversion remains the main driving factor as trading slowed down ahead of the long Easter holiday weekend, with key European markets closed both today and next Monday. Eurozone spreads came in with France continuing to outperform as election jitters eased again. The Gilt curve flattened as the long end outperformed, while in Germany it was the short end that benefited most today, with the 2-year Schatz yield down -2.0 bp, while the 2-year Gilt was up 0.2 bp and the French up 1.0 bp.
US reports: revealed a lean round of March core PPI figures, alongside another super-tight claims reading of 234k, an April Michigan sentiment bounce to 98.0 that sits just below its 13-year high of 98.5 in January, and a bounce in the weekly Bloomberg Consumer Comfort index to 51.0 that also sits just below its 10-year high of 51.3 in mid-March. For March PPI, a 0.1% headline drop with a flat core price figure reflected an expected energy hit but a 0.1% service price decline. For claims, a 1k downtick leaves an April average of just 234k, versus higher prior averages of 251k in March, 241k in February, and 246k in January, leaving upside risk for our 190k April payroll estimate.
The Aussie was the biggest winner yesterday out of the main currencies, showing a 1.2% advance on the euro, which is the day’s loser, and a 0.7% gain versus the U.S. dollar and just over a 1% advance on the yen. The rebound was initially sparked in AUDUSD by Trump’s remarks on forex levels, coming with the Aussie ripe for an upward snap after a period of pronounced underperformance into a long weekend. AUDUSD clocked a nine-day peak at 0.7595. The pair has retraced about one third of declines seen from March highs. AUDUSD and AUDJPY, on the view that geopolitical tensions are likely to remain elevated in the weeks ahead (there are reports of satellite evidence showing that North Korea is preparing another nuclear test, and Japanese PM Abe said today that Pyongyang may have the capability to launch sarin nerve gas warheads).
Canada: Risk aversion remained the general trend on Thursday. Though some short covering into the long holiday weekend helped pare the losses in stocks, news that the U.S. dropped the massive and largest non-nuclear bomb (MOAB) on the caves in the Nangarhar Province of Afghanistan, targeting a “series of Islamic State caves,” extended the selloff. The S&P/TSX was the underperformer in North America, in part as energy weighed. Wall Street’s recovery was undone by the blast and prices resumed their downturn after a prior short covering bid was halted. Thin trading ahead of the long Easter weekend may have added to some of the markets’ moves too. There was little reaction to the manufacturing and home price data. Canada’s new housing price index grew 0.4% m/m in February after the 0.1% gain in January. Canada manufacturing dipped just 0.2% m/m in February after a revised 0.1% gain in January (was +0.6%). The decline in February was shallower than expected (median -0.9%) given the 2.4% plunge in export values.
Main Macro Events Today
US Retail Sales – March retail sales data is out today and should reveal a flat headline (median unchanged) with a 0.3% ex-autos rate. This compares to February figures which had the headline up 0.1% and the ex-autos rate at 0.2%. US Business Inventories – February business inventory data should post a 0.3% increase for inventories, sales should also be up by 0.3%. This follows a 0.3% January inventory figure and 0.2% for shipments that month. US CPI – March CPI is out today and we expect to see a 0.0% headline from 0.1% with the core flat at 0.2%. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Political events and will remain firmly in focus this week. The market resurrection since the November election is being assaulted from all angles as the asset allocation pendulum swings back in favour of safety and away from risk. Divergent signals are evident from “hard data” such as weak retail sales and GDP versus “soft data” like surging consumer confidence and ISMs. After campaigning against U.S. globalism and interventionism, Trump continues to speak loudly on Twitter, but is now carrying a big stick. Intervention in Syria and Afghanistan and now with a US Strike Group off the Korean peninsula risks signals continue to ramp up. Elsewhere France goes to the polls at the weekend and President Erdogan appears to have won the referendum in Turkey. Gold trades at $1,290.00
United States: The economic calendar resumes with the Empire State index forecast to slip (Monday) to 15.0 in April from 16.4 in March, along with an update on the NAHB housing market index, seen easing to 70 in April from 71. Housing starts are expected to sink 0.6% in March to a 1,280k pace (Tuesday), though permits are seen rising to 1,260k from 1,216k. Industrial production is set to grow 0.3% in March from 0.1% (Tuesday), while capacity use rises to 76.1% from 75.9%. MBA mortgage applications may again be positively impacted (Wednesday) by the drop in rates with increased geopolitical risks, while EIA energy inventories remain fluid. The Philly Fed index may take a hit (Thursday) and decline to 25.0 in April after the surge to 32.8 in March. Initial jobless claims are forecast to rebound (Thursday) 14k to 248k for the week ending April 15, while the leading indicators index may rise 0.2% in March (median 0.2%) vs 0.6%. The week rounds out (Friday) with April Markit PMI and March existing home sales set to rebound 3.1% to a 5.65 mln pace from 5.48 mln in February. A small handful of Fedspeakers will be on hand this week including, George, Resengren and Kaskari . Earnings continue this week and include; Bank of America, Goldman Sachs, IBM, Morgan Stanley and Verizon.
Canada: Only CPI and Homes sales of note this week. We expect CPI (Friday) to expand 0.5% m/m in March after the 0.2% gain in February. Gasoline prices tracked higher through March. Meanwhile, total CPI is seen slowing to a 1.9% y/y pace in March from 2.0% in February. The trio of core measures remained muted in February, consistent with a tame backdrop of underlying inflation growth. The March existing home sales report is also due Tuesday. Total existing home sales jumped 5.2% m/m on a seasonally adjusted basis in February, and another firm reading would not be a shock.
Europe: Another holiday-shortened week, with most markets still closed Monday for Easter holiday celebrations. Political event risks are moving back into focus meanwhile as the first round of the French Presidential Election on April 23 draws nearer. The data calendar has the final reading of Eurozone March HICP inflation, which is widely expected to confirm the headline rate at 1.5% and core inflation at just 0.7%. The fall back clearly below the 2% limit in March is partly due to the later timing of Easter this year, which saw holiday related prices rising in April rather than March, so the data doesn’t change the picture of gradually rising headline rates, which will keep pressure on Draghi and Co to at least drop the implicit easing bias from the statement, even if the QE schedule is confirmed until the end of the year.
UK: London markets reopen after the Easter break on Tuesday. The calendar is quiet, and Brexit related developments are likely to remain limited ahead of the April-29 EU summit, while negotiations aren’t likely to start in earnest until after German elections in September. The only data release of note this week is retail sales for March (Friday), which we expect to decline 0.3% m/m (median same) and February’s 1.4% m/m gain..
Japan: The March trade report (Thursday) is expected to reveal a narrowed JPY 500.0 bln surplus, versus the revised 813.5 bln in February.
Australia: The Reserve Bank of Australia’s minutes to the April meeting (Tuesday) is the main event, and there may be little of interest in the minutes. The RBA left its cash rate at 1.50% and stuck with dovish guidance in April, as had been general expected. Economic data is in short supply.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian markets were mixed after returning from the holidays, with ASX and Hang Seng selling off, while the Nikkei close up 0.35% at 18,418. Australia’s market was hit by a drop in the mining sector amid the slump in iron ore and as concerns about the housing sector is denting the recent optimism in financials. The Hang Seng was hit by catch up trades after losses on mainland exchanges. FTSE 100 futures are also down, while U.S. futures are narrowly mixed. Oil prices are little changed, with the front end WTI future trading at USD 52.65 per barrel. Geopolitical factors continue to weigh and European markets have to digest Erdogan’s narrow victory in his bid to extend the presidential powers and the prospect of a tight Presidential election in France on the weekend. Amid this core bond markets are likely to remain supported and Draghi will keep a close eye on spread amid lingering risk aversion. Today’s calendar is unlikely to bring major surprises, with the final Eurozone HICP reading for March expected to be confirmed at 1.5% and EMU trade numbers usually not a market mover.
RBA Minutes: Steady rates consistent with growth and inflation targets, labour and housing markets “warranted careful monitoring” in coming months, Labour market somewhat weaker than expected, keeping wage growth low, Household consumption growth little weaker than expected in early 2017. CPI expected to pick up above 2 pct in 2017, core inflation to rise more slowly. RBA minutes repeats a rising in A$ would complicate economic adjustment, GDP likely expanded at moderate pace in Q1, impact of cyclone Debbie unlikely to be large. Commodity prices to boost national income in Q1, but terms of trade to decline from here, saw rising risks in household debt, housing markets. Finally – global growth accelerating broadly, Chinese economy appeared to have strengthened; protectionist policies in US still a risk. AUD sold off overnight and AUD USD currently trades at 0.7554 down from Mondays high at 0.7610.
US Data Yesterday: The NAHB homebuilder sentiment index fell 3 points to 68 in April after climbing 6 points to 71 in March (revised from 71), which was the highest since June 2005. It was 58 a year ago too. The single family sales index dipped 3 points to 74 after surging 6 points to 77 previously (revised from 78). But it’s been over 70 for five straight months, a sign of continued demand for new construction, according to the report. The future single family index fell 3 points to 75 after a 5 point pick up in March to 78. The index of prospective buyer traffic slipped 1 point to 52 from 53 (revised from 54). The Empire State headline plunged to a 5-month low of 5.2 from 16.4 in March and a 29-month high of 18.7 in February, versus a similar 6.5 in January. Yet the component data were mostly solid, and the ISM-adjusted Empire State remained unchanged at the 6-year high of 55.2 in March, versus 54.5 in February and 50.7 in January. The April headline drop coincided with declines in the orders and workweek components after big March increases, but all the remaining components rose.
Fedspeak: Fed VC Fischer did not discuss the policy course in his prepared remarks on “Monetary Policy Expectations and Surprises.” Rather it was a more academic summation of the Fed’s communications. He also pondered, can the Fed be too predictable, to which he answered “it is hard to argue that predictability in our reaction to economic data could be anything but positive” and he noted the clarity of the Fed’s reaction function allows the market to anticipate Fed actions and smoothly adjust. However, there could be some difficulties with respect to unexpected shocks to the economy if it appeared the FOMC was not being sufficiently responsive to incoming data that might affect the outlook. He does not look for a major market disturbance akin to the taper tantrum this time around as the FOMC shrinks its balance sheet, especially given the limited market reaction to the indication in the March FOMC minutes that a wind-down.
Main Macro Events Today
U.S. Housing Starts – March housing starts data is out later and should reveal a 1,256k pace for starts, up from 1,246k in January and 1,279k in December. Permits for the month should be 1,260k, up from 1,216k in February and completions should be 1,120k from 1,114k in February. The March NAHB posted an increase to 71, up from 65 in February before dipping back to 68 in April. U.S. Industrial Production – March industrial production data is also out today expectations are for a 0.4% headline gain after a 0.1% headline in February and -0.1% in January. The capacity utilization rate should rise to 76.1% from 75.9% in February. Mining and manufacturing hours worked from the March employment report were firm which could lend some upside risk to the headline. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell Senior Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: The global sell off in equities continued in Asia overnight, as commodities continued to slide. Most Asian markets are in the red, with the Nikkei managing to outperform and holding on to slight gains as the Yen retreats and helps to underpin exporters. U.S. stock futures are higher, but U.K. futures are signaling a further slide in U.K. stocks, which were hit by a stronger Pound and May’s surprise announcement of a snap election on June 8 yesterday. The FTSE 100 closed with a nearly 2.5% loss on Tuesday and while Eurozone markets also headed south, losses were much more muted. Core bond futures had a bumpy ride yesterday, but Bund and Gilts managed to close higher in the end and with the Bund contract consolidating gains in after hour trade and U.K. stock futures still in the doldrums, it seems likely that Bund futures will remain supported at the open. French markets meanwhile remain under pressure ahead of Sunday’s first round of the Presidential election, as leftist EU critic Melenchon threatens to throw a spanner in the works. The European calendar has final Eurozone inflation data for March and EU trade numbers for February.
US reports: industrial production data that closely tracked estimates and a housing starts report that modestly fell short, though both reports documented a rebounding factory sector and a housing market that continues to grow despite March setbacks, with big winter distortions from a mild winter and weakness in the vehicle sector. For industrial production, a 0.5% headline rise reflected an 8.6% March surge in utility output after a 13.4% 6-month drop to a 13-year low, alongside a 3.8% vehicle assembly rate drop that partly explains the weak March jobs report. For housing, starts fell 6.8% in March alongside a 3.6% permits rise and a 3.2% climb for completions that proved particularly strong through the winter months.
UK: UK PM announced a snap general election for June 8, clearly looking for a strong mandate from the public as she heads into negotiations to take the UK out of the EU. May, having replaced Cameron mid-term as PM, would strength her position in the event that her Tory party wins the election, which does seem likely given the prevailing disarray of the opposition and with the economy having held up well since the vote to leave the EU last June. The political opposition in the UK is in a mess and the UK economy has performed robustly since the Brexit vote last June. The main opposition party, Labour, have formally supported Brexit in the wake of the referendum, while the much small Liberal Party, is against. The election doesn’t therefore seem likely to derail Brexit. The pound dove on news that PM was to make an announcement, though has recovered most of the losses and held steady when May confirmed the election. Sterling showed gain on the dollar and when averaged against the G3 currencies. The IMF has also raised its 2017 forecast for UK growth to 2.0% from 1.5% forecast in January, and up from the 1.0% growth it was forecast back in October. The IMF still warned that the eventuality of Brexit will dent trade, while there is a risk that Scottish independence will find further impetus as a consequence of the election.
Main Macro Events Today
Eurozone CPI – Eurozone March HICP inflation, which is widely expected to confirm the headline rate at 1.5% and core inflation at just 0.7%. The fall back clearly below the 2% limit in March is partly due to the later timing of Easter this year, which saw holiday related prices rising in April rather than March, so the data doesn’t change the picture of gradually rising headline rates. NZD CPI (Q1) – Q1 CPI, expected to reveal a 0.8% gain (q/q, sa) after the 0.4% rise in Q4. The annual pace is projected to accelerate from 1.3% y/y in Q4, which would be supportive of our projection for the Reserve Bank of New Zealand to hold rates steady at 1.75% though year end. Japan Trade Balance – In Japan, the March trade report is expected to reveal a narrowed JPY 575.8 bln surplus, versus the revised 813.5 bln in February. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Stock markets moved higher in Asia overnight, as oil recovered some of its recent losses and amid better than expected trade data out of Japan, which underpinned global growth optimism. U.S. stock futures are also moving higher, U.K. stock futures continue to underperform and remain in the red as ongoing Sterling strength weighs on the index. Elsewhere in Europe stock markets already moved higher yesterday and are likely to join the global stock rebound, which is likely to keep upward pressure on core European yields. Gilt futures have been underperforming in tandem with the FTSE 100 in recent days and in the Eurozone spreads are coming in, as policy markets indicate that its too early for a change in central bank policy thus laying the ground for a steady hand policy decision next week. French markets remain jittery ahead of Sunday’s election, which is turning into a four-way race. Today’s calendar is quiet. Germany has PPI inflation at the start of the session, the Eurozone releases construction output data and there is supply from Spain and France.
German PPI inflation steady at 3.1% y/y in March, unchanged from the previous month. Energy prices dropped over the month in March and contributed to a large extend to the steady headline rate. Excluding energy, however, PPI accelerated markedly to 2.6% y/y from 2.2% y/y in the previous month and versus just 0.6% y/y in December. Clearly underlying inflation pressures are making a comeback, and more so in Germany than in some other parts of the Eurozone and while it is clear that the majority at the ECB doesn’t want to remove the insurance policy against geo-political risks and the flaring up of the debt crisis yet, the discussion about tapering and a gradual removal of the ECB’s policy support won’t go away.
Fed’s Beige Book repeated the economy rose at a modest to moderate pace, as is the usual characterization. Manufacturing grew at a modest to moderate clip, as did employment, though the labor market remains tight. Modest wage increases broadened, and there were bigger increases for skilled workers. Prices rose modestly with input prices generally outpacing gains in selling prices. Consumer spending was varied, with stronger auto sales somewhat offset by softer non-auto retail spending. Residential construction spending accelerated somewhat, even as home sales slowed, partly on a lack of inventory. Nonresidential construction remained strong, but became more mixed in some regions. The report surely keeps the Fed in play, but there’s no urgency for a hike next month, especially given some uncertainties noted over fiscal policy.
The UK parliament voted in favour of the June 8 election, a formality that had been widely anticipated following the prime minister’s calling of it. The vote was 522 to 13. The pound was consolidating gains since Tuesday, following the PM’s call for a snap election. The thinking in markets is that the Tory Party would likely win a much a bigger majority than present, if polls are to be believed, which would give the Prime Minister much more flexibility in upcoming negotiations with the EU. May will also have three years clear after actual Brexit in 2019 before having to hold a general election, which pundits reckon will also give her much greater leeway in forming a possible transitional trade agreement with the EU.
Main Macro Events Today
U.S. Initial Jobless Claims – Claims data for the week of April 15 are out today and should post an increase to 240k from 234k last week and 235k the week prior. Claims continue to remain remarkably tight. U.S. Philly Fed Index – The April Philly Fed expected to decline to 25.0 from 32.8 in March and 43.3 in February. The Empire State is already out and posted a decline to 5.2 from 16.4 in March. BOE Gov. Carney – BOE Gov. Carney speech starts at 12:30 GMT at the Institute of International Finance Policy Summit, in Washington DC. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Stock markets moved higher in Asia overnight, with Japan outperformed as the Yen weakened following indications from BoJ Governor Kuroda that he will keep the accommodative policy in place. Hopes of progress on Trump’s tax reform following comments from Treasury Secretary Munchin helped to underpin gains elsewhere. The move higher in Asia followed gains in the U.S. yesterday, but it remains to be seen how European markets, which mostly managed to close slightly higher, while the French CAC rallied on hopes that Macron will emerge as the winner in Sunday’s election, will react to the latest shootings in France. The EUR seemed little phased, but to close to the election, the incident could underpin support for Le Pen’s hard line stance in what already looks like a very tight race. US. and U.K. stock futures are higher and oil prices are also extending gains with the front end WTI future at USD 52.75 per barrel. Today’s calendar focuses on preliminary PMI readings out of the Eurozone, which also has current account and BoP data. The U.K. releases retail sales for March.
FX Update: The majors have continued to hold narrow ranges into the risk event that is Sunday’s French presidential election, which presents polarized risks for the euro. EURUSD is holding in the lower 1.07s, consolidating after failing to sustain yesterday’s run to a three-week high at 1.077. USDJPY has settled around 109.00. The yen was briefly bid following news of the terrorist attack in Paris, which left two police dead, though impact proved limited. The yen subsequently dipped after BoJ’s Governor Kuroda made dovish remarks during an interview with Bloomberg TV, where he said, “we will stick with yield curve control” and that “we think the current pace of purchases and monetary base increase will continue for some time.” The reaffirmation that the BoJ is sticking to its dovish course, which contrasts with the Fed, and even the ECB, was enough to prompt a wave of yen selling, with USDJPY logged an intraday high at 107.42 before impetus faltered, leaving yesterday’s nine-day peal at 109.49 untested.
U.S. reports: initial jobless claims rose 10k to 244k in the week ended April 15 after slipping 1k to 234k previously, which followed the 24k plunge to 235k for the April 1 week. Continuing claims declined 49k to 1,979k in the April 8 week after dropping 7k to 2,028k previously. That’s a 17-year low. Claims may have been impacted by the Good Friday holiday. Meanwhile, despite the uptick in jobless claims, the data remain near historic lows and reflect a strong labor market, as noted in the Fed’s April Beige Book. U.S. Philly Fed manufacturing index fell 10.8 points to 22.0 in April following the 10.5 point drop to 32.8 in March. Those follow the surprisingly strong 19.7 point surge to 43.3 in February which was the highest level since January1984, and compares to the record high of 49.5 in July 1983.
Main Macro Events Today
EU PMI – The Easter effect may also have an impact on preliminary PMI readings for April, and manufacturing and services sector numbers differently. Eurozone’s manufacturing readings expected at 56.3 from 56.2, while the services sector number expected to be remain unchanged at 56.0, which should leave the composite marginally at 56.3 from 56.4 in March. UK Retail sales – Retail sales for March, expected to decline 0.3% m/m and February’s 1.4% m/m gain. Meanwhile, total Retail Sales are seen slowing to a 3.4% y/y pace in March from 3.7% in February. Canadian CPI – CPI, expected to expand 0.4% m/m in March after the 0.2% gain in February. Gasoline prices tracked higher through March. Meanwhile, total CPI is seen slowing to a 1.8% y/y pace in March from 2.0% in February. The Bank of Canada expressed cautious optimism that underlying CPI will gradually move back towards the 2% target. US PMI & Existing Home Sales – The week rounds out with April Markit PMI and March existing home sales data expected at 2.5% increase in the headline pace to 5.60M from 5.480M in February. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Geopolitics have continued to dominate global markets long after the June 23 Brexit vote and the November 8 Trump victory. And the emphasis will remain on POLITICS this week too following the outcome of France’s presidential election (round 1), and ahead of a “big announcement” Wednesday from President Trump on his tax plan. Eurozone and especially French markets are likely to take a sigh of relief after Macon managed to beat Le Pen in the first round of the French election and Frexit risks subside. Macron will have to wait until the second round on May 7 where he is set to beat Le Pen by a wide margin, before he officially becomes President, but markets are likely to celebrate his victory already today.
United States: U.S. markets will quickly turn to domestic politics as President Trump plans an announcement Wednesday on his tax code overhaul. However, the White House said late Friday that it would be more of a broad outline, and hence not heavy on details. The economic calendar will generally take a back seat this week. The Advance Q1 GDP report (Friday) should be one of the more interesting releases. Growth is expected to slow to a 1.3% pace, from Q4’s 2.1% pace, and continuing the trend over the last several years of measurable erosion in Q1. More timely data includes the April Dallas Fed index (Monday), the Richmond Fed index (Tuesday), the KC Fed survey (Thursday), and the Chicago PMI (Friday). March new home sales (Tuesday) are forecast falling 1.2% to 585k. Also on Tuesday are the February Case-Shiller and FHFA home price indexes, with pending home sales due Thursday. Consumer confidence (Tuesday) should slip to a still strong 124.0 in April after the surprise surge to 125.6 in March. The final April print on consumer sentiment (Friday) is expected to inch up to 98.5. March durable goods orders (Thursday) are expected to be unchanged. Finally, Q1 ECI (Friday) is forecast holding at a 0.5% pace.
Canada: Canada awaits the first look at February GDP (Friday), expected to reveal a flat (0.0%) reading after the 0.6% surge in January. But before that, some additional ingredients for the GDP projection will be released, with wholesale shipment figures (Monday) and retails sales (Wednesday). Wholesale shipments are expected to fall 0.5% m/m in February after the 3.3% surge in January. Retail sales are projected to improve 0.1% after the 2.2% jump in January. The industrial product price index (Friday) is seen rising 0.2% m/m in March after the 0.1% gain in February. Average weekly earnings for February (Thursday) and the CFIB’s Business Barometer for April (Thursday) round out the calendar.
Europe: Today,Even as the markets will be busy digesting the outcome of the first round of the French Presidential election from Sunday, traders will also have a bumper crop of data to analyze, along with the outcome of the ECB meeting. The outcome of the ECB meeting (Thursday) will also hinge to some extent on the French election result. Growth is picking up and this week’s data round is likely to add further to signs that the recovery is not just strengthening, but broadening, and that the slowing in the March HICP to 1.5% y/y from 2.0% was due to special factors. The very full data calendar has first Q1 GDP readings from France and Spain, as well as more April confidence surveys in the form of the German Ifo and the EMU ESI. There also will be a full round of preliminary April inflation numbers. The French HICP (Friday) is expected to bounce back to 1.7% y/y in April from 1.4%, while the Italian reading (Friday) is seen at 1.7% y/y from 1.4%. Spain’s price figure (Thursday) should rise to a 2.4% y/y clip from 2.1%. These should boost the overall April Eurozone CPI (Friday) to 1.8% y/y, up from 1.5% in s month. Even core inflation will be impacted by the Easter effect. Also on the week’s slate are German March retail sales, import price inflation, and GfK consumer confidence, along with French consumer spending data. The ECB meanwhile publishes the latest bank lending survey on Tuesday.
UK: Sterling rallied over 2% last week after British PM May called a snap election, which will take place on June 8 and is widely expected to see her Tory Party greatly increase its majority. Market focus will be on incoming polls, and while the main Labor Party opposition is in disarray, there is a risk that the SNP might win the vote strongly at the election, which would increase the odds for Scottish independence. After a quiet week previously, the UK data schedule picks up, highlighted by the preliminary Q1 GDP estimate (Friday) where we expect growth to slow to 0.4% q/q from 0.7%. Other data include the April CBI surveys on industrial trends (Monday) and the distributive sector (Thursday), both of which we expect to show moderation from respective April readings. Overall, the reports are expected to fit an emerging picture of stagnating economic growth, which the ONS stats office, in explaining unexpected weakness in official March retail sales data on Friday, blamed mostly on rising prices and declining real income.
Japan: Japan’s BoJ meets (Wednesday, Thursday). The Bank is widely expected to keep its very accommodative stance in place with its -0.100% policy rate, while maintaining its control over the yield curve via QE and the asset purchase program. Indeed, BoJ Governor Kuroda confirmed last week that easy policy and steady asset purchases would continue to some time. The data calendar kicks off with March services PPI (Tuesday). That’s followed by the February all-industry index (Wednesday). The balance of releases are out on Friday, beginning with March National CPI, March unemployment, preliminary March industrial production, March personal income is due, along with March PCE, March overall retail sales, March housing starts and March construction orders are also on tap.
New Zealand: New Zealand’s slate has the March trade report, expected to show a NZ$200 mln surplus after the NZ$18 mln deficit in February. Building permits for March are also due Friday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: The global stock market rally continued in Asia overnight. In the absence of further news from North Korea global jitters have abated somewhat and with Macron advancing as the favourite in the runoff to the final round of the election, the focus is turning to corporate earnings, the ECB meeting Thursday, and once again Trump’s tax package. The Nikkei remained underpinned by a weaker Yen, Chinese stocks stabilized, after yesterday’s sell off, while Australia and New Zealand were closed for a holiday. U.S. and U.K. stock futures are moving higher and Bund futures, which sold off sharply yesterday as save haven trades were being reversed, already started to stabilize later in the session. Eurozone spreads, which came in sharply yesterday as French and peripheral yields dropped, should also start to stabilize again, especially as more stability in France also means there is less need for Draghi’s insurance policy on rates and QE. Today’s calendar has business confidence data from France, the ECB’s bank lending survey, a German Schatz auction and U.K. borrowing numbers.
Fed’s Kashkari said bank regulations made ending too-big-to-fail worse by raising compliance costs on small and medium sized lenders. Kashkari is speaking at an investment conference at UCLA. And he noted big banks likely hate his call for a higher capital cushion. Dodd-Frank legislation was probably a net-positive for the system, but looking back on it, he added it wasn’t perfect and didn’t really address too-big-to-fail. He’s not real sure of the benefits of negative rates. While they may have helped spur people to invest and spend more, and save less, he’s simultaneously concerned that the psychological channel of negative rates may scare people. He didn’t really address monetary policy given his speech falls within the FOMC’s 10-day blackout period.
European markets continued to celebrate Macron’s victory in the first round of the French election during the European session yesterday. Frexit and Eurozone breakup concerns were being priced out, which triggered a broad rally on European stock markets. The FTSE 100 underperformed but still managed to gain more than 2%, and in the Eurozone, it is the Italian MIB rather than the French CAC 40, which is leading the way by rising nearly 4.5%. The revival of risk appetite saw Bund and Gilt yields spiking higher, while Eurozone peripheral yields dropped sharply and spreads came in. The German 10-year Bund yield is up 9.3 bp while the Gilt yield is up 4.1bp. By contrast the French 10-year is down -8.8 bp, the Italian down -4.5 bp, the Spanish down -5.4 bp and the Portuguese a whopping 14.9 bp. At the short end France clearly outperformed and the French yield curve steepened as the 2-year yield lost -11.2 bp . Macron still has to take on Le Pen in the second round of the contest on May 7, but he is tipped to beat the far right, EU critic by a wide margin.
Main Macro Events Today
UK Public Borrowing – March’s Public borrowing data is also up today, and expected to go up to 1.5B from 1.1B last time. US Consumer Confidence – April consumer confidence is out today and should fall to 124.0 from 125.6 in March and 116.1 in February. Michigan Sentiment rose in its first release, climbing to 98.0 from 96.9 in March and 96.3 in March. However, the IBD/TIPP Poll for April declined to 51.7 from 55.3 in March. US New Home Sales – March new home sales data expected at 1.2% headline decline to a 585k pace from 592k in February and 558k in January. The other major housing reports were mixed with starts falling to 1.215 mln from 1.202 mln in February whereas existing home sales rose to 5.710 mln from 5.470 mln in February. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets managed another broad move higher, after gains on Wall Street yesterday. Hopes for U.S. tax cuts and a weak Yen underpinned a nearly 1% rise in the Yen. Gains in Europe had moderated on Tuesday after the initial rally following the French election result, but global equity markets still seem more relaxed. In the Eurozone though more stability on the political front also means that the pressure on Draghi to change the forward guidance is increasing and a Reuters source story yesterday confirmed that while the ECB may want to wait for the second round in France, it could change tack and start laying the ground for exit strategies at the June Meeting. We don’t expect Draghi to tweak the already announced QE schedule for this year, but real tapering will be on the cards in 2018 and the easing bias is likely to be finally scrapped in June. Today’s calendar is empty. German preliminary HICP, EMU ESI economic confidence and the U.K. CBI retailing survey are all due alongside the ECB meeting tomorrow.
U.S. reports: revealed a strong data set for housing, confidence and sentiment. For new home sales, we saw a 5.8% March surge to a robust 621k rate after net upward revisions, though the pace remained a tick below the 622k cycle-high in July of 2016 despite the winter weather-lift. Both the FHFA and S&P/Case-Shiller home price indexes rose in February by 0.8% and 0.4% respectively. Consumer confidence fell in April to a still-robust 120.3 after a March pop to a 16-year high of 124.9 (was 125.6), as confidence fluctuates around its highest levels since December of 2000. Producer sentiment has remained firm in April despite headline drops, as seen with a Richmond Fed downtick to 20.0 from a 7-year high of 22.0 in March and 17.0 in February, versus a 3-year low of -11.0 last August, and Dallas Fed downtick to 16.8 from 16.9 in March and an 11-year high of 24.5 in February. Treasury receipts thus far in April are slightly disappointing however, with a 7% y/y gain despite a lift from last year’s big capital gains.
Australia: Today Australia reported a rise in CPI at 0.5% in Q1 (q/q, sa), matching the growth rate in Q4 and undershooting projections. CPI did accelerate to a 2.1% y/y pace in Q1 from the 1.5% y/y rate in Q4. But that was a touch below projections, but does regardless lift the annual rate above 2.0%. The annual core CPI measures improved: the trimmed mean CPI accelerated to a 1.9% y/y clip in Q1 from 1.6%, while the weighted median CPI picked up to a 1.7% rate from a revised 1.4% growth rate in Q4 (was +1.5%). Notably, the trimmed mean is nearing the bottom of the RBA’s 2.0% to 3.0% target band. The report underpins expectations for steady rates from the RBA through the turn of the year. AUDUSD has dropped to 0.7511 from the 0.7545 level seen just ahead of the report.
Main Macro Events Today
Canadian Retail Sales – Expected at 0.1% gain in February retail sales values. The report, is expected to reveal a 0.2% dip in the ex-autos sales aggregate. There is more forecast risk than usual around this report, as Statistics Canada will present revised figures going back to 2012 that are based on a new sample for the survey. Pr. Trump Tax Announcement – President Trump plans an announcement Wednesday on his tax code overhaul. As Reuters reported that maybe the biggest Tax Cut since he will propose small business partnerships and sole proprietorships to 15% from 39.6 %. US Crude Oil Inventories – US Crude Oil Inventories expected to slightly fall to -1.1M from 1M last week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are narrowly mixed, with Japan’s stock rally running out of steam and Chinese equities underperforming as Xi stressed that financial security is “strategically important” to the country’s economic and social development, thus adding to signs that the government is stepping up its crackdown on leverage. The BoJ presented an upbeat picture of the economy, but left policy unchanged, giving markets little reason to move as investors digest Trump’s tax plan that was released yesterday. The Nikkei is down -0.19%, CSI 300 down -0.55%, while Hang Seng and ASX manage marginal gains. FTSE 100 futures are down, while U.S. futures are moving higher. In Europe, the focus shifts to the ECB meeting, with Draghi likely to follow the BoJ’s example and refrain from rocking the boat although the hawks will step up their pressure, especially as German and Spanish HICP rates today are set to accelerate, while ESI economic confidence is seen rising further. The calendar also has the U.K. CBI retailing survey. as well as Spanish unemployment and German consumer confidence at the start of the session.
Trump E.O. on NAFTA (North American Free Trade Agreement) withdrawal is being mulled according to a Politico.com article posted earlier: “The Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials. A draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration’s intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.” Additionally, House Freedom Caucus endorses the revised ACA repeal plan, noting “while the revised version still does not fully repeal Obamacare, we are prepared to support it to keep our promise to the American people to lower health-care costs.” It was the very conservative Freedom Caucus that generally derailed President Trumps initial plan. So far this week equity markets have gotten bullish news from France, taxes, and now the ACA. Wall Street remains in the green, but gains are limited so far after the surges on Monday, Tuesday, although a close here on the S&P at 2,398 would be a new record high. This latest news should particularly benefit healthcare and insurance stocks.
U.S. NEC Director Cohn is introducing the Trump tax cuts with some historic comparisons, as rates and the system are stuck at 1986 levels even as other countries have gotten more competitive and gone to a territorial basis. He will hand over the podium to Treasury Secretary Mnuchin next. There will be 3 brackets, 10%, 25% and 35% (reduced from 7) and double standard deductions, repeal the death tax, tax relief for families with child and dependent care, married couples won’t pay tax on the first $24k in income. They will repeal the estate tax and the alternative minimum tax, with a 15% business tax rate. Home ownership and charitable deductions will be retained, but most other tax breaks will be eliminated.
Canada: Retail sales volume dip tracks a February GDP stall-out.The 0.1% decline in retail sales volumes followed a 1.4% surge in January and a 0.6% decline in December. A 0.4% decline in wholesale shipment volumes joined the 0.1% gain in manufacturing volumes. Housing starts improved 2.3% to a 214.3k unit pace in February, suggestive of another positive contribution from construction production. Mining, oil and gas production are on track to make a substantial negative contribution to February GDP. The lack of growth in February GDP should be followed by a resumption of activity in March GDP.
Main Macro Events Today
ECB Confidence & Rate Decision – Confidence indicators continue to look good, inflation is expected to bounce back with the April reading and Macron’s advance in the French election means Frexit and Eurozone breakup risks seem banned for now. Against that background, the hawks at the ECB council will likely intensify their push for a change in the forward guidance at the council meeting tomorrow and Draghi will be under fresh pressure to at least drop the implicit easing bias. ECB meeting – ECB Monetary policy statement and press conference have been scheduled for 12:30 GMT today. US Durable Goods – March durable goods orders are expected to be unchanged (i.e. 1.2%) following February’s 1.7% increase, on top of the 2.3% January gain which were supported by transportation. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets are mostly lower, disappointing earnings reports out of Japan underpinned the correction from the two-week rally and investors are holding back ahead of the Golden Holiday. The ASX is a notable outperformer and clinging on to marginal gains. U.K. stock futures are moving higher but U.S. futures are heading south. After pushing stock indices to new highs investors need further impetus to drive the rally further and are likely to remain cautious ahead of the long weekend in Europe. Yields headed south yesterday, especially in the Eurozone, after Draghi did his best to assure markets that nothing has changed and that should help to cushion the impact of the likely jump in HICP inflation today. Today’s bumper data already includes Spanish GDP, UK Preliminary GDP and CPI Flash Estimate. U.S. calendar includes Q1 GDP, Q1 ECI, Chicago PMI and consumer sentiment.
U.S. reports revealed largely expected durable orders figures for March, but with lean inventory data that combined with a downside surprise for advance trade in goods, with weakness in both exports and imports, to trim our Q1 GDP growth estimate to 1.1% from 1.2%. The advance indicators report also revealed weak wholesale inventory data, though with an upside retail inventory surprise that left a slightly stronger inventory path on net. We also saw a 14k pop in initial claims to 257k in the Easter week, though claims remain tight overall despite holiday-related volatility over the past month, leaving an average thus far in April of a lean 244k. Pending home sales fell 0.8% as expected in March after a 5.5% February pop, and the Bloomberg comfort index rose to a sturdy 50.8. More generally, the durables, trade, and claims data have sustained their firming pattern that implies a pick-up in 2017 growth beyond the disappointing outlook for tomorrow’s Q1 GDP report, which appears to reflect the odd recent pattern of Q1 seasonal weakness.
Japan’s data dump revealed tepid inflation and mixed growth figures. Hence, nothing surprising from the CPI, retail sales, employment, consumption, and industrial production reports. The yen is little changed relative to the New York close, with USDJPY at 111.30. The core CPI measure (excludes fresh food but not energy) grew at a 0.2% y/y pace in March, matching the 0.2% pace in February and remaining well below the BoJ’s 2% target. The employment backdrop remains strong, with the unemployment rate at 2.8% in March, matching February’s 2.8%. But wages and income growth are weak, holding back consumption. Granted, retail sales surged 2.1% y/y in March after the 0.2% gain in February. But month comparable sales were a rather anemic 0.2% in March after the 0.3% gain in February. And household spending contracted 1.3% y/y in March after the 3.8% tumble in February. Industrial production fell 2.1% m/m in March (preliminary) after a 3.2% gain in February. Yet the measure grew at a 3.3% y/y pace in March after the 4.7% y/y gain in February, continuing the run of strong y/y gains (3.1% to 4.7%) seen since November. Unfortunately, Japan’s pick-up in industrial production is due to external demand, as the domestic demand backdrop remains rather weak.
Main Macro Events Today
US Advance GDP & UoM Consumer – The Advance Q1 GDP report should be one of the more interesting releases. Growth is expected to slow to a 1.3% pace from Q4’s 2.1% pace, and continuing the trend over the last several years of measurable erosion in Q1.More timely data includes Chicago PMI and the final April print on consumer sentiment which is expected unchanged at 98. UK Prelim GDP – The UK data schedule picks up, highlighted by the preliminary Q1 GDP estimate where growth expected to slow to 0.4% q/q from 0.7%. EU CPI – April Eurozone CPI expected at 1.8% y/y, up from 1.5% last month. Canadian GDP – Canada awaits the first look at February GDP, expected to reveal 0.1% reading after the 0.6% surge in January.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
FX News Today A convergence of politics, as well as monetary and fiscal policy will collide this week after President Trump finishes commemorating his first 100-days in office over the weekend. Despite lobbying Congress hard for a second vote on the ACA repeal and a Continuing Resolution (CR) on government funding, those cans were kicked down the round with a delayed vote on the former and successful one-week funding bill that will buy a little more time on both fronts. Passed by the House, the CR will keep the government running next week allowing lawmakers more time to debate on a long-term bill to take operations through the rest of the fiscal year. The Senate also unanimously passed the CR to keep the government funded for one more week, while leadership of both houses indicated they are close to a broad spending plan. Markets will weigh these developments closely ahead of the FOMC meeting and April payrolls. Asia cools off this week at least in terms of data, if not geopolitics, after N. Korea fired another failed test missile. In Europe, in wake of the mixed messages from the more bullish-but-dovish ECB last week focus will be returning to eurozone politics with the second round of presidential elections in France at the end of the week
United States: The U.S. economic calendar will be overshadowed by the April employment report, which looms at the end of the week. April nonfarm payrolls are forecast to increase by 188k vs the subpar 98k reading in March, with a 98k private payroll gain. The unemployment rate is expected to hold steady from 4.5% last month. The week will start out with March personal income (Monday), seen rising 0.3% vs 0.4%, while April ISM is forecast to dip to 56.6 from 57.2 (Monday). April vehicle sales are projected to rebound (Tuesday) and MBA mortgage market indices are due (Wednesday) following the rebound in rates from post-election lows, which could crimp refits. The April ADP Employment report (Wednesday) should post a 190k gain (median 200k), below the March figure of 263k. April ISM services may bounce (Wednesday) to 55.9 from 55.2, while EIA energy inventory data is due. The March trade deficit is set to widen to -$44.7 bln from -$43.6 bln (Thursday) and Q1 productivity is seen flat, down from 1.3% in Q4. Initial jobless claims may dip 11k to 246k (Thursday) for the week ended April 29, while March factory goods are expected to be flat vs 1.0%. In addition to the jobs report (Friday), consumer credit is forecast to increase $16.0 bln from $15.2 bln.
Canada: Canadian calendar is rather lean in terms of the number of top tier releases this week, the reports that are out have the potential to move the market. Employment (Friday) is expected to rise 20.0k in April after the 19.4k gain in March. The risk remains for a pull-back in jobs given the robust gains in total jobs that stretch back to August with only one interruption (November’s jobs tally slipped 2.4k). The earnings figures will be of as much interest as the total jobs figures, with another anemic month of earnings growth consistent with the Bank of Canada’s view that “material excess capacity remains” in Canada’s economy. The March trade report (Thursday) is projected to show a trimming in the deficit to -C$0.8 bln from the -C$1.0 shortfall in February that ended the upbeat run of trade surpluses that lasted from November of 2016 to January of this year. Exports are seen making some headway (+0.7%) after the 2.4% tumble in January. The loonie was weaker against the U.S. dollar, which is supportive of export growth. The Ivey PMI for April is due Friday while the Markit manufacturing PMI is scheduled for Monday. Dealer reported vehicle sales for April are expected on Tuesday. BoC Governor Poloz delivers a speech (Thursday) in Mexico City to the CanCham Mexico and Club de industrials. The speech will be available on the Bank’s website at 16:10 ET.
Europe: Data releases this week are unlikely to change the overall picture of a cyclical recovery that is also starting to lead to broad improvements on the labour market. After French and Spanish GDP numbers are looking for an overall Eurozone GDP growth (Wednesday) of 0.5% q/q, unchanged from Q4. The second quarter started with a strong round of confidence data and an encouraging revival in France which is catching up and adding to signs that the recovery is not just focused on Germany. The final round of April PMI readings should confirm the Eurozone Manufacturing PMI at 56.8, and the Services reading at 56.2 which should leave the composite at 56.7, indicating a strong expansion of economic activity. Markit reported with the release of preliminary numbers that employment growth continues to be strong Especially the German labour market is looking quite tight already and we are looking for a further improvement in the sa jobless number of -11K leaving the April jobless rate unchanged at a record low of 5.8%. Overall Eurozone numbers are more backward looking but the March reading should fall to 9.4% from 9.5%, although developments remain uneven across countries and the high rate of youth unemployment remains a key challenge for politicians going ahead.
The calendar also has Eurozone PPI and supply from France and Spain, while Germany sells EUR 3 bln of 10-year Bunds on Wednesday. There is plenty of ECB speak from Lautenschlaeger, Praet and Draghi among others, but comments are likely to focus on Draghi’s main message from last Thursday, namely that nothing has changed so far.
UK: The business week in London markets starts on Tuesday after the May Day holiday on Monday. The calendar this week is highlighted by the April PMI surveys. The manufacturing PMI (Tuesday) expected at a 52.0 reading after the 52.0 outcome in March. A similar abatement is anticipated in the construction and services PMIs (due Wednesday and Thursday, respectively), seeing the former at 52.0, down from 52.0, and the latter at 54.5, down from 55.0 in March. In-line data would reaffirm a picture of an economy in the early throws of stagnation, amid eroding real household incomes, ongoing government austerity, political uncertainty, and declining investment.
Australia: Australia’s calendar features the Reserve Bank of Australia’s meeting (Tuesday), expected to reveal no change in the current 1.50% rate setting. The statement is projected to be consistent with no change in rates through year end. The Bank’s Statement on Monetary Policy (Friday) will provide updated growth and inflation projections. Governor Lowe speaks (Thursday) on “Household Debt, Housing Prices and Resilience.” Economic data is headlined by the March trade report (Thursday), projected to show a A$3.5 bln surplus in March after the A$3.6 surplus in February. The Melbourne Institute Inflation Index for April is due Monday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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European Outlook: Asian stock markets tried to move higher after the holidays, but Hang Seng and ASX are now slightly in the red, as is the CSI 300, while the Nikkei outperforms and is posting a 0.58% gain, helped by a weaker Yen and testing the ceiling that has been in place since December ahead of the holidays. The RBA left the cash rate unchanged, while highlighting the high level of debt in China as a medium term risk. FTSE 100 futures are moving higher after yesterday’s holiday, while U.S. futures are down, with investors looking ahead to the FOMC decision. Today’s European calendar has the final readings of Eurozone manufacturing PMIs, which are expected to confirm preliminary numbers, while the U.K. manufacturing PMI is expected to dip slightly to 54.0 from 54.2 in the previous month. The Eurozone also has Eurozone unemployment data for March and there is ECB speak from Noy and Nowotny.
FX Update: USDJPY has lifted for a second consecutive day, this time logging a new six-month peak at 112.10. EURJPY and other yen crosses are also up quite sharply, reflecting general underperformance of the Japanese currency. EUR-PY clocked a seven-week high at 122.46. The reflects rising global investor risk appetite, which has been weighting on the safe haven yen in accordance with the normal pattern. This comes with various bellwether Wall Street and global indexes trading at or near record highs, with the CBOE implied vols “fear gauge” tipping to the lowest level since 2007 yesterday. News that Greece reached a deal with the IMF and EU, along with a continued strong lead in French opinion polls for pro-EU presidential candidate Macron, have helped maintain a general risk-on vibe, though stock markets have been mixed in Asia today, while U.S. and European equity indexes are slightly lower. The RBA did the expected and left monetary policy unchanged following its latest meeting, and upgraded the language on its outlook for employment in the statement, noting unemployment should “decline gradually over time” while saying that it expects a “gradual further increase in underlying inflation” as the economy strengthens. AUDUSD rallied to an eight-day high of 0.7556 in the wake of the statement, since ebbing to the 0.7530 area.
U.S. reports revealed weaker headlines than expected, but massive upward revisions in the January and February construction spending data left a stronger than expected data mix that lifted our Q1 GDP growth forecast to 0.9% from 0.7%. For construction, a 0.2% March drop followed boosts in the nonresidential, public, and home improvement components, with a firm new home construction trajectory. This accompanied a 0.2% personal income rise with flat consumption that modestly undershot assumptions, alongside a big 0.3% “real” increase thanks to weather-led firmness in service consumption and an expected 0.2% headline PCE chain price drop. An ISM drop to a 4-month low of 54.8 from 57.2 in March and a 30-month high of 57.7 in February still left a firm level, and the ISM-adjusted average of the major surveys is still on track for a solid 56 reading from a 57 cycle-high in February and March.
Main Macro Events Today
UK Manufacturing PMI – The manufacturing PMI expected to reveal a fractional ebb to a 54.0 reading after the 54.2 outcome in March. EU Manufacturing PMI and Unemployment Rate – The final round of April PMI readings should confirm the Eurozone Manufacturing PMI at 56.8, while March’s unemployment rate expected to fall at 9.4% from 9.5% last time, although developments remain uneven across countries and the high rate of youth unemployment remains a key challenge for politicians going ahead. NZD employment report – New Zealand’s calendar has the Q1 employment report, projected to show a 0.8% gain (q/q, sa). The unemployment rate is seen to be unchanged at 5.2%. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian markets were thinned out by holidays with Japan, South Korea and Hong Kong closed, CSI and ASX are in negative territory ahead of the Fed announcement. Poor Apple Inc earnings results weighed on sentiment but this didn’t prevent Taiwan markets to move slightly higher. No surprises are expected from the FOMC — not any change in rates nor any clear hint of the timing of the next move, but surveys suggest another rate hike in June. There’s no press conference or release of estimates this time around, thus the only update on Fed thinking will be via the policy statement, and that shouldn’t be too revealing. U.K. and U.S. stock futures are also down, pointing to a correction in European markets, which managed to extend gains into the close on Tuesday. The DAX cleared the 12500 mark yesterday and was at new all-time highs. The European calendar has German unemployment data for April as well as the first reading of Eurozone Q1 GDP, a German 10-year Bund sale and the U.K. Construction PMI for April.
FX Update: The dollar majors have been plying narrow ranges into the Fed’s policy announcement later today, where Bloomberg calculates there is a 12.8% chance for a 25 bp rate hike. EURUSD eked out a three-session peak at 1.0936, and is presently settled near net unchanged on the day at 1.0921 bid. USDJPY has settled to an orbit of the 112.00 level, below the one-month peak seen yesterday at 112.30. Sterling has come under pressure heading into the London open, with Cable have shed over 50 pips in making a 1.2884 low. This follows yesterday’s failure to test last week’s six-month high in the wake of a strong UK manufacturing report, and with all the signs suggesting that the Britain and the EU are heading into tough Brexit negotiations. Market conditions have been thin so far today, with Japan and Hong Kong out.
U.S. ACA repeal update: “very good progress” is being made on Obamacare repeal, said House Speaker Ryan, following remarks from Majority Whip Scalise that the modified healthcare plan would still protect those with pre-existing conditions. A vote on the bi-partisan intermediate government funding bill is scheduled for tomorrow, while a vote on ACA repeal has yet to be set. Meanwhile stocks and yields are heading lower after soft initial auto sales figures for April.
Main Macro Events Today
EU GDP – Eurozone GDP growth of 0.5% q/q, from 0.4% of Q4. In the past, variations in the timing of Easter have had an impact on quarterly growth rates and maybe it’s better to see Q1 and Q2 in conjunction to better assess the underlying trend. US ADP Employment & ISM Services – The April ADP Employment report should post a 180k gain, below the March figure of 263k. April ISM services may bounce to 55.8 from 55.2, while EIA energy inventory data is due. FOMC Statement – FOMC began its meeting and will announce its decision today. No change is widely expected. There’s no press conference this time around, or release of economic and dot-plot forecasts, so the statement will be scrutinized for hints on the normalization path. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Bund futures headed south in after hour trade yesterday and yields spiked in the wake of the FOMC announcement, which saw the Fed reiterating plans for gradual rate hikes. Asian stock markets were mostly down, the CSI managed to hang on to marginal gains however, and Japan remained closed for this week’s holidays. Metals dragged markets down as iron ore futures tumbled amid inventory concerns. U.S. and U.K. stock futures are moving higher though, pointing to opening gains, while the drop-in Bund futures late yesterday suggests opening losses on bond markets. Today’s calendar has services PMIs from the Eurozone and the U.K. as well as the Norges Bank decision. The U.K. also has lending data and the Eurozone retail sales numbers for March.
U.S. reports: revealed a solid round of April ISM-NMI figures that highlighted the upside risk for our 190k April payroll estimate, though we also saw a restrained round of April ADP figures after an outsized March gain. For sentiment, a 57.5 April reading sat just below the 16-month high of 57.6 in February, versus an interim 55.2 figure in March, while the ISM-adjusted measure similarly returned to the 18-month high of 56.5 from February, versus an interim 53.9 figure in March. For ADP, a 177k April rise slightly above expectations, though the March ADP surge was only modestly trimmed to 255k from 263k, leaving substantial room for “catch up” in Friday’s jobs data. The March payroll data may have been depressed by bad weather in the BLS survey week, and ADP figures aren’t impacted by weather disruptions as inactive workers generally remain on company’s payrolls, so the big net-rise for ADP over the March-April period suggests upside risk on Friday.
FOMC left policy unchanged with a 0.75% to 1.00% target band. The Fed’s statement acknowledged the slowing in Q1 growth but said it was “likely to be transitory.” There was no new information on the balance sheet. For more of the guts of the statement, the Fed added that the labor market continue to strengthen, even as the economy slowed. Household spending rose only modestly but the fundamentals underpinning the continued growth of consumption remained solid. Business fixed investment firmed. Meanwhile, annual inflation has been “running close to the Committee’s 2% longer-run objective,” said the Fed, which was a small but important shift from March where the Fed said “inflation was “moving close to the…2% target.” It looks like price pressures are even nearer the goal. Near term risks to the economic outlook remain in balance. The vote was a unanimous 9-0. The outcome is as was expected. The door was left wide open for a tightening in June if the data tracks the expected Q2 rebound.
Europe: EMU Q1 GDP growth came in at 0.5% q/q, while the annual rate fell back to 1.7% y/y from 1.8% y/y. There was no breakdown with the preliminary release but in any case, it is likely that the different timing of Easter this year has led to some distortions, as the services sector will have gotten a boost in April this year, rather than in March, while production will have been stronger without the holiday period in March this year compared to 2016. Hence it is widely expected to see the ECB removing its easing bias at the June meeting, when the updated set of staff forecasts are also due. The UK April construction PMI beat expectations in rising to a headline reading of 53.1. Residential construction and civil engineering activity drove the uptick in expansion in the sector. Both construction and the manufacturing PMI’s have beaten expectations, rebounding from a recent soft patch and showing once again that the UK economy is performing resiliently as the sharp end of the Brexit process draws closer. Attention will now fall on the services PMI release today, as this sector accounts for nearly 80% of the economy.
Main Macro Events Today
US Data – The March trade deficit is set to widen to -$44.5 bln from -$43.6 bln and Q1 productivity is seen flat down from 1.3% in Q4. Initial jobless claims may dip 10k to 247k for the week ended April 29, while March factory goods are expected to be at 0.4% vs 1.0%. Canadian Trade balance and BoC Governor Speech – The March trade report is projected to show a trimming in the deficit to -C$0.8 bln from the -C$1.0 shortfall in February that ended the upbeat run of trade surpluses that lasted from November of 2016 to January of this year. Also, BoC Governor Poloz delivers a speech in Mexico City to the CanCham Mexico and Club de industrials. ECB’s Draghi Speech – There is plenty of ECB speak from Lautenschlaeger, Praet and Draghi among others, but comments are likely to focus on Draghi’s main message from last Thursday, namely that nothing has changed so far. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets headed south as oil dropped below USD 45 per barrel for the first time since November last year. Chinese equities meanwhile continued to decline amid ongoing efforts by regulators to curb leverage and speculation. Japan and South Korea remained closed for holiday and investors are looking ahead to today’s U.S. jobs report. With a pretty empty data calendar in Europe, the latter will remain in focus and it remains to be seen whether Eurozone markets, which already “celebrated” Macron’s clear lead in the polls ahead of Sunday’s presidential election yesterday, can push things further today, or whether caution returns, especially ahead of the U.S. numbers. Bund futures, which sold off sharply yesterday, moved sideways in after hour trade and FTSE 100 and U.S. stock futures are heading south and after the DAX reached new all time highs yesterday there may be some profit taking.
U.S. reports: revealed a better than expected round of March trade figures but downside surprises for the nondurable data in the March factory goods report that trimmed our Q1 GDP estimate back to the 0.7% advance figure despite firm equipment readings, with an $8 bln downward inventory revision that offsets an expected $8 bln construction boost. We also saw a tight round of initial claims figures at the close of April that added to the upside risk for 185k April nonfarm payroll estimate in tomorrow’s jobs report. The Q1 productivity figures revealed the expected 0.6% Q1 drop after a Q4 boost to 1.8% from 1.3%, while the weekly Bloomberg consumer comfort index rose to a 50.9 figure that sits just below the 51.3 cycle-high from mid-March. All the data support the narrative that the Q1 growth figures were depressed by seasonal weakness that will be sharply reversed in Q2 and Q3.
U.S. House “narrowly passed” the healthcare reform bill that aims to replace ACA with a new program, though the final shape of the package will be determined by the Senate, which just signed off on the temporary government funding bill through September. U.S. Senate has passed the $1.1 tln spending bill to fund the government through the rest of the fiscal year. The vote was 79-18. It has been passed on to the president for his signature which will finalize the legislation (the current CR expires Friday). He sign it, even though it doesn’t include many of his campaign priorities, including funding the border wall. It also doesn’t include the proposed $18 bln in spending cuts for healthcare, the environment, and other programs. But, it provides some $21 bln of the requested $30 bln in additional military funding.
Main Macro Events Today
US Employment – April employment data is out today and expected at 185k headline that exceeds the 98k headline and March but falls short of February’s 219k bounce. Canada Employment – Employment is expected to rise 20.0k in April after the 19.4k gain in March. The risk remains for a pull-back in jobs given the robust gains in total jobs that stretch back to August with only one interruption. The Ivey PMI for April is due today as well. Fedspeak – Fedspeak resumes today with speeches from Chair Yellen, her Vice Chair Fischer and SF Fed’s Williams. Chicago’s Evans, Boston’s Rosengren and St. Louis’ Bullard will take part in a panel discussion. Yellen is slated to speak on “125 Years of Women’s Participation in the Economy” at 13:30 ET. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Global growth has become less of a worry, even though there are still plenty of challenges ahead. The solid U.S. April jobs report supports the view that Q1 weakness was transitory. And it adds to the growing body of evidence that shows the smaller Eurozone economies are catching up to Germany’s drive such that the expansion is deepening and broadening. The U.K. has been surprisingly resilient to Brexit fallout. And though Asia is more of a question mark with some slowing in China and still weak consumption in Japan, the region looks to remain rather robust.
United States: The U.S. employment report went a long way toward restoring confidence in the expansion, and even hinted that the Trump bump and rise in producer sentiment might be working their way into the real sector given the broad-based nature of the gains. There are a couple of important indicators due out this week, including CPI and retail sales, though neither are likely to materially change the view that the weakness in Q1 was temporary. Along with data, the $62 bln May refunding is on tap. Some concessions were made into the weekend, but the offerings could prove difficult amid rising risk appetite. Earnings reports will remain a factor too, but the calendar is considerably lighter this week as the season dies down. Other data reports out this week include the April NFIB Small Business Optimism Index (Tuesday), which has improved significantly since the Trump election. JOLTS job openings for March (Tuesday) will give the markets another angle on the labor market. Then trade prices (Wednesday) will provide another view on inflation parameters. The April Treasury budget (Wednesday) will give a more complete view on the important tax season inflows and outflows. PPI for April (Thursday) will highlight inflation developments from the producer side.
Canada: The Canadian calendar has a limited amount of economic data and nothing from the Bank of Canada this week. Housing starts (Monday) are expected to moderate to a still elevated 220.0k pace in April from the 253.7k pace in March. Building permit values (Tuesday) are projected to expand 5.0% m/m in March after the 2.5% drop in February. The March new home price index (Thursday) is seen rising 0.3% m/m in March after the 0.4% gain in February. The next event on the BoC calendar is the policy announcement (May 24), which no change to the current 0.50% rate setting expected alongside a still cautiously constructive outlook for growth and inflation that maintains our ongoing view that no change in rates will prevail through year end.
Europe: With markets digesting the French election, German manufacturing orders for March (Monday) may attract less attention than usual at least if there is no major negative surprise in the wings. The German orders data will be the most forward looking of this week’s data round, which otherwise focuses mostly on Q1. German industrial production (Tuesday) is expected to have corrected -0.4% m/m in March, after expanding strongly in February, while French production should rebound from the drop-in February and rise 1.0% m/m. This should leave the Eurozone number up 0.4% m/m. German trade data for March will complete the German Q1 cycle ahead of the preliminary GDP release (Friday). After the robust Eurozone release, the German growth number is expected to come in at 0.6% q/q, up from 0.4% q/q in Q4 last year.
UK: The stellar set of April PMI surveys of last week showed that the UK economy remains resilient in the face of Brexit uncertainties. The UK calendar this week includes the May BoE MPC meeting and publication of the central bank’s latest quarterly Inflation Report (Thursday). No change to prevailing policy settings is widely anticipated, while the recent signs of accelerating economic activity after a relative soft patch in Q1, along with robust global growth, should feature in both the policy meeting’s minutes and the inflation report narrative. Data include the April BRC retail sales report (Tuesday), where expected to rise by 0.4% y/y after the -1.0% figure in the month prior. The late timing of Easter this year has messed with seasonal adjustments somewhat, so markets will be looking at the underlying three-month figure for better clarity. Industrial production data for March are also up (Thursday), which expected to be improved to a -0.4% m/m figure after -0.7% in February. Trade data will be released at the same time.
Japan: In Japan, April consumer confidence (Monday) should slip back to 43.5 from 43.9, while the March current account surplus (Thursday) is expected to narrow to JPY 2,400 bln from 2,813.6 bln. April bank loan figures are also due Thursday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets outside of Hong Long slipped after yesterday’s rally, which saw Japan’s Topix rising to the highest level since December 2015. The Nikkei is little changed on the day and Chinese stocks fluctuated. Weak retail sales data from Australia weighed on forex and equity markets and investors are taking stock while waiting for a catalyst before making further headway. In Europe FTSE 100 futures are moving higher, despite a stronger Pound ahead of the BoE meeting and as PM May is heading for a convincing victory in the June election. The DAX may have risen above 12700 for the first time ever last Friday, but is struggling to keep that level amid bouts of profit taking as the Macron rally peters out and the focus turns to ECB tapering. Mersch yesterday all but confirmed that the ECB will change its forward guidance in June and tapering announcements are now being expected for September. With that in mind Eurozone spreads are likely to remain volatile, as markets try to assess what the withdrawal of the ECB’s support measures means for peripherals. Today’s calendar has Italian retail sales data. Already released U.K. BRC retail sales were much stronger than anticipated, but March/April are likely to have been impacted by the different timing of Easter this year.
Fedspeak: Fed’s Mester discussed yesterday the economic outlook before the Chicago Council of Global Affairs. As she stated, she wants rate action taken before the Fed’s goals are met as she’s worried about falling behind the curve, according to her prepared remarks on the economic outlook. It’s important for the FOMC to remain “very vigilant against falling behind.” If price pressures become excessive as the labor market becomes unsustainably tight, policymakers may have to “move rates up steeply,” and that could risk recession. And she believes the Fed has achieved its maximum employment goal. She would also like the Fed to start normalizing its balance sheet this year. She is a hawk, but doesn’t vote this year. Fed’s Bullard on the other hand, believes the current rate setting is appropriate, according to a speech on the natural rate at an Atlanta Fed conference. He stated that the “natural rate of interest, and hence the appropriate policy rate, is low and unlikely to change very much over the forecast horizon.” And he added the U.S. seems to be in a low-growth state, though “a case could be made that some recent observations have been more consistent with the high-growth state.” Bullard is not a voter this year.
Germany: posted a sa trade surplus of 19.6 bln in March, down from EUR 21.2 bln in the previous month. Exports dropped 0.4% m/m , while imports surged 2.4% m/m, the latter after falling -1.6% m/m in February. March data brought the total for the first quarter of the year to EUR 59.7 bln, down from EUR 60.0 bln in the previous quarter. These are nominal numbers, that do not account for fluctuations in exchange rates and oil prices. And with import prices picking up that suggests real data will look somewhat better. Overall though net exports actually detracted from overall growth last year, and are still pretty subdued. The current account surplus widened in March, and rose 1.2% y/y in Q1, thus adding further ammunition to the critics of Germany’s large surplus.
Main Macro Events Today
US NFIB & JOLTS – Today, the April NFIB Small Business Optimism Index is out, which has improved significantly since the Trump election. Also, we will see JOLTS job openings for March will give the markets another angle on the labor market. Canadian Building Permit – Building permit values are projected to expand 5.0% m/m in March after the 2.5% drop in February. Looking back, the 2.5% decline in building permit values in February came after a revised 5.8% gain in January (was +5.4%). Fedspeak – St Louis Fed’s Bullard will be on a panel discussing interest rates today. The dove Kashkari will speak at a high-tech conference. Rosengren speaks at an NYU conference on risk management. Kaplan will speak at an interest rate summit. AU Budget Report – Australia’s calendar has Annual Budget Release today. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian stock markets moved higher, led by shares in Hong Kong, which rose to a 21 month high led by financials. Strong leads from the U.S. underpinned markets, although elsewhere gains were more muted and U.S. and FTSE 100 futures are heading south, indicating a correction from yesterday’s surge higher that saw the DAX climbing further above the 12700 mark and the FTSE 100 closing above 7300. European yields moved higher yesterday as investors flocked into stocks, with the Bund still outperforming Gilts, as Eurozone markets price in tapering and rate steps amid strong growth indicators and receding political risks. Mersch all but confirmed the expected change in guidance on Monday and Draghi will have a further chance to clarify the central bank’s stance at his speech to Dutch lawmakers today. In the U.K. the BoE starts its two day meeting, with expectations for an unchanged policy stance. The European data calendar has production data out of Italy and France as well as Norwegian inflation numbers and French trade.
FX Update: The dollar has traded modestly lower so far today, which some market narratives link with Trump’s firing of FBI Director Comey. USDJPY settled back under 114.00 after clocking a two-month peak at 114.33 yesterday. The high caps an impressive winning streak, with the pair having climbed in every session bar three over the last three weeks as it lifted out of the 108.12 six-month low posted on April 17. EURUSD settled in the upper 1.08s after logging a 12-day low yesterday at 1.0863. The narrow USD index is down by 0.2%, correcting some after logging a 19-day high yesterday. Oil prices have continued to see relatively steady price action, near $46.0 in the case of the WTI future, while most Asian stock markets have gained today following a flat session on Wall Street yesterday.
US reports: report revealed divergent surprises, with a disappointing flat figure for March wholesale sales after a 0.7% February increase, but a 0.2% inventory rise that beat the 0.1% drop in the advance indicators report, after a 0.3% February rise. Sales undershot inventories after beating inventories for three consecutive months, hence slowing the downtrend in the inventory-to-sales (I/S) ratio to leave a 1.28 ratio for a third consecutive month. Now a Q1 GDP growth boost expected to 0.9% from 0.7%, with a $7 bln boost in wholesale inventories that accompanies an $8 bln downward factory inventory revision, U.S. JOLTS showed March job openings rose 61k to 5,743k from a downwardly revised 5,682k (was 5,743k). But the job openings rate was steady at a solid 3.8%. Hirings rebounded 11k to 5,260, also from a downward revision to 5,249k (was 5,314k). The rate was flat at 3.6%. Quitters, a favorite stat of Chair Yellen, increased 80k to 3,116k from 3,036k, with the rate holding at 2.1%. Data aren’t new and will be taken in stride, though they continue to show a tight labor market.
Fedspeak: Fed hawk Rosengren warned that the jobless rate at 4.4% is below “natural full employment” estimates at 4.7% and a further drop below 4.0% “would likely be accompanied by higher inflation, overheating the economy and prompting higher rates.” Also, balance sheet shrinkage shouldn’t be disruptive, said the non-voting Fed president, in post speech Q&A. The market can absorb balance sheet shrinkage, if it’s done gradually. It should be highly tapered, and part of the intent is to let mortgage rates rise. The Fed is still discussing its portfolio strategy, it’s still pretty “speculative,” he admitted, but he hopes to normalize the balance sheet will begin relatively soon, repeating recent comments. He also said the Fed is likely to hit zero rates again in future recessions.
Main Macro Events Today
ECB Speech – ECB President Draghi speaks at the Dutch House of Representatives, in Netherlands, about the impact of Monetary policy. US Imports and Exports & Budget Statement – April trade price data is out today and expected at 0.1% increase for exports with a matching 0.1% increase for imports. This would follow March data which had exports up 0.2% and imports down 0.2%. Oil prices rebounded in April after a dip in March which should help support the data. Also, April’s Treasury budget is out and will give a more complete view on the important tax season inflows and outflows. RBNZ Rate Statement & Press Conference – Reserve Bank of New Zealand meeting. No change in the 1.75% rate setting is anticipated, along with a statement that is consistent with steady rates through year-end. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian markets managed modest gains as higher oil prices underpinned energy producers and indices near multi-year highs. Mainland China underperformed once again amid official efforts to curb leverage. New Zeeland benchmarks meanwhile led the move higher after the central bank said it will keep rates at record lows for an extended period of time. U.S. futures are heading south but FTSE 100 futures are moving higher after already outperforming yesterday ahead of today’s BoE announcement. Expectations are for a steady policy decision, leaving the minutes and the inflation report in focus. In the Eurozone, Draghi managed to bring some calm into spreads, as he signaled that the forward guidance may be changed in June, but that real tapering is still a way off and won’t start before next year. The calendar today also has U.K. production data as well as inflation numbers out of Switzerland and Sweden, the ECB’s latest economic bulletin and the EU Commission’s updated set of forecasts.
ECB Outlook: Risk to price stability is “by and large gone” as President Draghi stated.He added that the forward guidance was meant to address tail risk and that some tail risks are less and less probable. The clearest sign yet from the ECB President that the easing bias will be scrapped in June and Bund futures are coming off intraday highs on the comments. With the risk of the French election out of the way the ECB is firmly on course to tweak the forward guidance in June, with Draghi following up Mersch’s comments from Monday, which show the central bank moving towards a more balanced view on growth and inflation and laying the ground for dropping the easing bias, that is still in place and adopting a neutral stance. The QE schedule for this year, which has already been announced, will remain in place and real tapering won’t start before 2018 and will be announced in September at the earliest. The key issue then for June is whether the statement tweaks the guidance in a way that would allow to lift the deposit rate out of negative territory even before asset purchases have been phased out. Given recent comments that seems increasingly likely, although it may not yet be announced in June, as Draghi and Co will be eager to move very gradual on policy normalization amid concerns that it could put undue pressure on peripherals.
RBNZ Rate Statement: RBNZ held rates steady at 1.75%, as expected. The statement by Governor Wheeler was similar to March, which was similar to February. Measured optimism remains in place, but with a recognition of ongoing uncertainties. Notably, Wheeler said developments since the February Monetary Policy Statement on balance are considered to be neutral for the stance of monetary policy. And a dovish bias was retained, as the Governor concluded that “Numerous uncertainties remain, and policy may need to adjust accordingly.” In March he said “Numerous uncertainties remain, particularly in respect to the international outlook, and policy will need to adjust accordingly.” But with “numerous uncertainties” remaining, is possible that an easing bias will remain in place at the RBNZ. But absent any downside surprises, the Bank should hold steady through year end.
Main Macro Events Today
BOE Rate Decision & Monetary Policy – No change to prevailing policy settings is widely anticipated. This will leave the focus on the minutes and the latest inflation report, which will likely feature the recent signs of accelerating economic activity after a relative soft patch in Q1, along with robust global growth. UK Production Data – Industrial production data for March are also up today, which expected to improve to a -0.4% m/m figure after -0.7% in February. Trade data will be released at the same time. US PPI & Unemployment Claims – PPI for April will highlight inflation developments from the producer side, and it is forecasted with gains of 0.1% and 0.2% for the headline and core, following a 0.1% overall decline in March and an unchanged reading on the ex-food and energy component. Unemployment Claims expected at 245K from 238K last week. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
European Outlook: Asian markets were mixed overnight. Shares in Japan declined from a 17-month high amid a wealth of earnings reports today. Electronics and auto makers were under pressure as the Yen held gains and markets are taking stock after the recent rally. The Nikkei is down -0.54%, the Hang Seng managed a marginal 0.9% gain as stocks mainland markets moved higher, and the CSI 300 gained 0.63%, while the ASX was down -0.71%. U.S. futures are also heading south, while the FTSE 100 future is little changed. Yesterday’s BoE report may have hinted that markets are underestimating the BoE’s willingness to tighten policy, but with investors focusing on warnings of challenges for households and not buying into the assumption of a smooth Brexit Sterling declined and yields slipped while the FTSE 100 managed to outperform Eurozone markets. Today’s calendar has German GDP and inflation data at the start of the session as well as EMU production data.
U.S. reports: revealed a hot round of April PPI gains after yesterday’s firm trade price data and a surprisingly low 236k initial claims figure at the start of May that further solidifies Fed tightening expectations for June. For PPI, the expected big 0.5% goods price rise accompanied a solid 0.4% service price increase to leave a pop in the y/y rise to 2.5%, though gasoline price declines in early May should allow a 0.2% headline drop this month that leaves a drop-back in the y/y climb to a still-firm 2.1%. Claims tightness signals upside risk for our 195k May payroll estimate, alongside upside risk from firm consumer, producer, and small business confidence, a solid 237k average monthly ADP rise thus far in 2017, and a likely vehicle sales and assembly bounce in Q2 that accompanies a GDP growth bounce to 3.2%, after weak Q1 performances for both.
The BoE did the expected and kept policy unchanged, leaving the repo rate at 0.25% and QE totals unaltered (GBP 435 bln for government bond purchases, GBP 10 bln for corporate bonds). As last time, one member voted for an immediate hike in Bank Rate, and the updated Inflation Report noted that for some it would take relatively little further upside news on the prospects for activity or inflation to vote for a hike. Its 2017 growth forecast was trimmed to 1.9% from 2.0%, though the central bank’s projections for 2018 and 2019 were both upwardly nudged by 0.1 of a percentage point. At the same time the bank noted that the centrals scenarios of the May inflation report suggest that monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the very gently rising path implied by the market yield curve. However, the underlying assumption is a smooth Brexit transition to the new trading arrangements with the EU and that is a big if markets obviously disagree with. Markets though focused on the downside risks and didn’t buy into the assumption of a smooth Brexit transition so Sterling dropped and Gilt futures recovered losses on the back of the report.
Germany: Q1 GDP growth accelerated to 0.6% q/q in the first quarter of the year, from 0.4% q/q in Q4 last year and in line with expectations. The stats office reported that both domestic and external demand underpinned the quarterly growth rate and highlighted in particular that investment growth strengthened. Consumption growth was modest meanwhile and net exports improved. The annual rate rose 2.9% y/y. German Apr HICP confirmed at 2.0% y/y. The acceleration from just 1.5% y/y in March, was largely explained by the Easter effect, which lifted holiday related prices in April this year, rather than March as in 2016. All in all, pretty much as expected and confirming that the German recovery remains on track.
Main Macro Events Today
US CPI – April CPI is projected to rebound 0.2% for both the headline and the core, following respective declines of 0.3% and 0.1% in March. Weakness in energy prices was a major reason for the March declines and that should turn around for the April data. US Retail Sales – Retail sales are seen bouncing 0.5% after dropping 0.3% in March, while the ex-auto figure should rise 0.4% after the 0.2% gain previously. Fedspeak – FOMC Member Evans goes to Dublin to speak on economic conditions and monetary policy, while Harker speaks at Drexel University. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi Market Analyst HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
Comments
MACRO EVENTS & NEWS OF 3rd April 2017.
FX News Today
“Bulls make money, bears make money, but pigs get slaughtered” goes the old trading adage. However, Wall Street and longer dated Treasuries are mostly net higher on the quarter, having weathered the Fed rate hike and some uncertainties over the Trump agenda after the ACA failure. Confidence remains high heading into April, as reflected recent sentiment surveys, the labor market continues to strengthen, and manufacturing is improving further. Data will be in full swing this week and will help formulate outlooks for Q2. In Europe, intrigue will continue swirl around the ECB’s exit strategy. The opening stance on Brexit between the UK and EU predictably focused on a “Hard Brexit” by the latter, though negotiations won’t be start in earnest until after German elections in September.
United States: The U.S. economic calendar features the March jobs report Friday, which has suddenly come upon us again after sealing the deal on the March FOMC hike last month. March nonfarm payrolls are expected to increase by 200k vs 235k in February, with a 225k private payroll gain. Looking at the rest of the week, Markit PMI for manufacturing in March is due (Monday), along with March ISM manufacturing seen slipping to 57.0 from 57.7 and February construction spending expected to rise 0.8% vs -1.0%. The February trade deficit (Tuesday) is forecast to narrow to -$46.7 bln from -$48.5 bln, while MBA mortgage market report is due (Wednesday), accompanied by the March ADP employment report, which should post a 238k gain for the month, below the February figure of 298k. EIA energy inventories are also on tap. Initial jobless claims may retreat 14k to 244k (Thursday) for the April 1 week. In addition to the jobs report (Friday) will be the wholesale trade report and February consumer credit, expected to rebound to $18 bln vs $8.8 bln. FOMC minutes are due Wednesday from the FOMC’s March 14, 15 meeting that included the first rate hike of 2017. But the Fed also surprised with a less hawkish stance than was feared by the markets, especially with respect to the dot plot where the median estimate called for only two more tightenings in 2017, for a total of three.
Canada: A busy week begins with the BoC’s Outlook Survey (Monday), which expected to show increased optimism as the recovery maintains momentum. However, indicators of capacity should remain consistent with still ample spare capacity, while employment measures reflect ongoing slack in the labor market. The trade surplus (Tuesday) is projected to narrow to C$0.7 bln in February from C$0.8 bln in January. Building permit values (Thursday) are anticipated to grow 2.0% in February after the 5.4% gain in January. Employment (Friday) is seen rising 20.0k in March after the 15.3k gain in February. The unemployment rate is seen steady at 6.6%. Governor Poloz offered a cautious view of Canada’s economy, saying in effect that the recent few odd firm data point should not make us forget about the numerous downside risk surrounding the outlook for Canada’s economy. Hence, another run of firm data will not change our view that the Bank will hold policy steady at next week’s announcement (April 12) and though the first half of 2018. The Ivey PMI (Friday) is projected to improve to 57.0 in March from 55.0 in February.
Europe: The Brexit process has officially begun, but both sides have merely set down pretty much as-expected positions. For Eurozone markets, at least, the Brexit issue has been overshadowed by the conflicting voices coming out of the ECB council ahead of the April meeting. Draghi did leave the easing bias in place in March, but pressure to drop return to a more neutral stance is mounting as data suggests upside risks to Q1 GDP numbers. Draghi is still insisting that rates can go down further, national central bank heads continue to talk about tapering and the sequencing of exit steps. Draghi will have a chance to clarify the central bank’s stance when he speaks in Frankfurt on Tuesday and Thursday and the minutes of the March meeting (Thursday), should give some indication of the extent on the discussion on the forward guidance at the last meeting.Data releases this week include the final readings of March PMI surveys, with the manufacturing PMI (Monday) expected to be confirmed at 56.6 and the services PMI (Wednesday) at 56.6 Initial readings were better than anticipated and already pointed to an upside risk to Q1 GDP projections and German manufacturing orders (Thursday) and industrial production (Friday) for February will be watched carefully in that respect. The data calendar also has retail sales, German trade data and French production numbers.
UK: The focus will remain on the early stages of the Brexit process, though hard negotiations between the UK and the EU are not likely to start until after German elections in September. The data calendar this week is highlighted by the March PMI surveys. The manufacturing PMI (Monday) expected to come in with a headline reading of 54.9, up from 54.6. Improving global demand coupled with the benefits of post-Brexit vote sterling weakness is underpinning the sector. The services PMI (Wednesday) has us anticipating a near unchanged reading of 53.3 after 53.3 in the month prior. Industrial production for February is also due (Friday), which is expected to rise 0.2% m/m after the 0.4% m/m contraction in the previous month.
New Zealand: March QV house prices due Wednesday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 4th April 2017.
FX News Today
European Outlook: Bund futures extended yesterday’s gains in opening trade, as DAX futures head south in tandem with U.S. futures after a largely negative session in Asia, where China and Taiwan remained closed for a holiday. Ongoing Yen strength is hitting exports and the RBA’s policy announcement, which left rates unchanged did little to cheer up the ASX. Investors continue to hold back ahead of the meeting between U.S. and China and FOMC and ECB minutes as well as U.S. jobs data at the end of the week. And with the European data calendar very quiet, Draghi’s speech is the only thing that could shake up things.
U.S. reports: revealed firm readings for March ISM and February construction spending, though we’re also seeing a 4% March drop in vehicle sales that trimmed our Q1 GDP growth forecast to 1.2% from 1.3%. For the ISM, there was only a small March drop to 57.2 from a 30-month high of 57.7 in February, and the jobs index surged to a 6-year high of 58.9 from 54.2. Robust producer sentiment readings is allowing the ISM-adjusted average of the major surveys to sustain the 57 cycle-high from February, and this combined with other robust soft-data signals upside risk for our 220k March nonfarm payroll estimate as discussed in today’s commentary. For construction, a 0.8% February bounce after upward revisions beat estimates, with strength in new home construction and improvement that likely reflected mild weather, though with weakness in nonresidential construction and a January upward public construction revision that trimmed recent gyrations.
Fedspeak: Fed’s Harker repeated 3 rate hikes would be appropriate in 2017, in his prepared remarks on Privately Issued Digital Money “Won’t Drive Out” Existing Currencies, assuming things stay on track. But he said, there’s no need to rush. The tightening should be gradual in pace and incremental. Inflation is moving slowly but surely higher, while unemployment is at or near its natural rate. Harker is a voter this year, but these leanings suggest no urgency. Fed dove Dudley also had a speech yesterday. Mr. Dudley stuck to the script on student debt, which he sees as one potential headwind to economic growth that “could help lower the equilibrium Fed funds rate.” He views rising college costs and student debt burdens as potentially inhibiting U.S. upward income mobility, while overall student loan debt could hurt U.S. homeownership and consumer spending. Other than the tangential reference to the equilibrium Fed funds rate, there’s not much here for the markets to trade. See his “Remarks at the Economic Press Briefing on the Household Borrowing, Student Debt Trends and Homeownership, Federal Reserve Bank of New York, New York City.”
Australia: The RBA left its cash rate at 1.50% and stuck with dovish guidance, as had been general expected following its April policy meeting. The statement by Governor Lowe noted improving global conditions, highlighting infrastructure spending and property construction in China, but noting that the domestic economy remains in transition following the end of the mining investment boom, with low wage growth persisting and underlying inflation seen rising only gradually. Lowe stuck with a focus on the Australian dollar, repeating that “an appreciating exchange rate would complicate” the economy’s transition phase. AUDJPY showing particularly sharp declines over the last couple of sessions. AUDJPY, which can be seen as a forex barometer of global risk appetite, is trading at levels last seen in early December. The RBA’s repetition of its desire to see the exchange rate remain a weaker level following its widely-expected decision to leave the cash rate at 1.50%, helped today weigh on the Aussies.
Main Macro Events Today
UK Construction PMI – The Construction PMI has as anticipating an almost unchanged reading of 52.4 after 52.5 in the month prior.
ECB – ECB President Draghi will speak in Frankfurt where he will have a chance to clarify the central bank’s stance.
US Trade Balance – February trade data expected to post a 7.2% improvement to a -$44.9 bln for the month from -$48.5 bln in January. The advance data on goods and service trade showed an improvement with that deficit narrowing to -$64.8 bln from -$68.8 bln in January.
Canadian Trade Balance – The trade report, expected to show a slight erosion in the surplus to C$0.7 bln in February from C$0.8 bln in January. Energy exports are seen improving, as crude oil prices were modestly higher in February while natural gas prices were nearly flat on a month average basis.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 5th April 2017.
FX News Today
U.S. reports: China and Twaian were leading Asian markets higher after returning from holidays. Elsewhere gains were more muted and the Hang Seng is slightly in the red, as investors eye the Trump-Xi meeting. Bets on potential gains from the development of a so-called economic zone in Hebei province helped to lift China, while benchmarks in Japan and Australia fluctuated as currency advances weighted on exporters FTSE 100 futures are higher, but U.S. futures are in the red. Oil prices are up on the front end WTI future is trading at USD 51.38 per barrel. Released overnight the U.K. BRC shop price index was in line with expectations. The European data calendar still has final services PMI readings for the Eurozone, as well as the U.K. services PMI. Eurozone officials are once again trying to hammer out a deal with Greece that will allow the payment of the next aid tranche.
US reports: revealed stronger than expected trade deficit data and factory goods figures that closely tracked assumptions, leaving a net boost to our Q1 GDP growth estimate to 1.5% from 1.2%, after Q4 growth of 2.1%. For the trade deficit, we saw a February narrowing to $43.6 bln from a 5-year high of $48.2 bln, leaving a gap that was $1.4 bln narrower than indicated by the “advance” trade report after a $0.3 bln narrowing in January. For factory goods, the data matched estimates with lean February nondurable increases of 0.2% for shipments and orders and 0.1% for inventories. We saw only tiny tweaks in the durables data for orders, shipments, equipment and inventories that slightly lifted most levels.
ECB’s Liikanen: Strong monetary support still needed. The Governing Council member told Germany’s Handelsblatt, that “strong monetary support is still needed”, as the improvements seen so far are not big enough to “fundamentall” change the central bank’s guidance. Liikanen admitted that there were discussions at the last meeting and “there are a lot of opinions in the Governing Council”, adding that the statement did notice some improvements and tweaked some parts of the forward guidance, but added that the ECB “emphasized that interest rates will remain low beyond the end of asset purchases”. According to Liikanen that was “undisputed” although “there were discussions about what is meant by the words ‘current or lower levels’. The comments highlight the increasingly divergent views at the ECB as the central bank is starting to think about exit strategies and a phasing out of QE.
Canada: Canada’s February trade puts a damper on the Q1 GDP outlook, which was riding high after the stunning 0.6% m/m surge in January GDP lifted prospects for Q1 GDP to the 3.5% area. But the February trade balance sets up a sizable drag on Q1 growth from net exports. USDCAD revealed little immediate reaction to the twin Canada/U.S. trade reports, where the U.S. deficit narrowed more than expected, and the expected Canadian surplus turned to a deficit. The pairing has since rallied to new three-week highs of 1.3456 however, even as oil prices move to session highs near $50.70. The Canada trade report has thrown cold water on expectations for Q1 GDP, apparently to the detriment of the CAD.
Main Macro Events Today
FOMC – FOMC minutes are due today from the FOMC’s March 14, 15 meeting that included the first-rate hike of 2017.
UK Service PMI – The services PMI has us anticipating a near unchanged reading of 53.3 after 53.3 in the month prior.
EU Service PMI – The Eurozone services PMI expected to stay unchanged at 56.5, while Germany’s expected to stay unchanged as well at 55.6.
ADP Employment & ISM Non-Manuf. PMI – The MBA mortgage market report will be released today, accompanied by the March ADP employment report, which should post a 187k gain for the month, below the February figure of 298k. Markit services PMI are due, alongside ISM Non-Manufacturing index seen easing to 57.0 in March vs 57.6.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 6th April 2017.
FX News Today
U.S. reports: Bund futures moved higher in after hour trade yesterday after the Fed minutes showed that the Fed discussed scaling back its balance sheet later in the year, which knocked U.S. stocks off highs and weighed on markets in Asia. The Nikkei is down -1.45%, ASX and Hang Seng is also in the red as are U.K. stock futures. The DAX already underperformed yesterday and is likely to continue to head south against that background, which will underpin European bond futures and keep a lid on yields. Investors also remain cautious ahead of the Trump Xi meeting. In Europe, the ECB will release its minutes and ECB President Draghi will speak at the opening of a conference, with markets looking for clues on the state of the debate on the future of asset purchases and the assessment of Nowotny’s call to hike the deposit rate ahead of the end of QE. Data releases include Swiss inflation data and Eurozone retail and construction PMIs.
US reports: 263k March ADP rise beat 187k estimation, following a trimming in the February ADP rise to 245k (was 298k) that narrowed the gap to the 227k private payroll increase in that month. There was a surprisingly large 82k March goods employment gain with outsized increases of 49k for construction and 30k for factories that explained the March overshoot, alongside a 4k rise for mining and an expected 181k service employment gain. The ADP figures overshot private payrolls by a whopping 71k in February, after overshoots of 25k in January, 3k in December, 38k in November, and 15k in October to leave an average overshoot since the October methodology change of 30k, hence diminishing the significance of today’s 38k overshoot of our March nonfarm payroll estimates. Additionally,the U.S. ISM-NMI drop to a 5-month low of 55.2 reversed the February climb to a 16-month high of 57.6 in February from 56.5 in January, while declines in the employment and new order components allowed a drop in the ISM-adjusted reading to a 7-month low of 53.9 from a 16-month high of 56.5 in February and 54.8 in January.
FOMC minutes: “most” participants could see a change in the reinvestment policy later in the year, but views were mixed on how and when the changes would occur. The minutes to the March 14, 15 FOMC meeting also indicated “many” emphasized that shrinking the size of the balance sheet should be done in a “passive and predictable manner.” Also, both Treasuries and MBS should be a part of the reinvestment changes. But, there was also discussion of costs and benefits of phasing out or ceasing all at once the reinvestment of principal. Meanwhile, on interest rates, nearly all officials thought the U.S. was at full employment. Overall economic risks were generally balanced, but many saw upside risk to the economy from fiscal policy. There were various views on the extent of labor market slack, as well as how close inflation was to the 2% goal. And while there were no clear indications that policymakers were ready to pull the tightening trigger again as soon as May, there weren’t any signs the FOMC was ready to abandon its tightening path either.
Germany: Feb manufacturing orders rose 3.4% m/m, slightly less than anticipated, but with January revised up to -6.8% m/m from -7.4% m/m, the annual rate nevertheless jumped to 4.6% y/y. Domestic orders rebounded strongly from the slump at the start of the year, while export orders stagnated as a dip in orders from other Eurozone countries, the second in a row, counterbalanced a rise in orders from non-EMU countries. All in all broadly in line with expectations, and together with confidence data confirming that the recovery remains on track, which adds to Weidmann’s calls for a phasing out of asset purchases.
Main Macro Events Today
ECB – ECB president Draghi will speak in Frankfurt today, while and the minutes of the March ECB Monetary Policy Meeting Accounts are also today as well.
Trump-Xi – Chinese President Xi Jinping will visit Florida to meet President Trump, with the President saying North Korea will be high up on the agenda.
US Unemployment Claims – Initial jobless claims may retreat 8k to 250k for the April 1 week.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 7th April 2017.
FX News Today
European Outlook: Asian stock markets are mixed with Japan outperforming. Risk aversion spiked after a U.S. missile strike in Syria and a strong Yen weighed on exporters, but the Nikkei managed to bounce back and is up 0.41% on the day, with Japan Petroleum Exploration Co. rising strongly as crude oil prices jumped above USD 52 per barrel. The Hang Seng is down -0.64% and CSI and ASX are little changed, while U.S. and U.K. stock futures are heading south amid a fresh bout of risk aversion. This should keep Bund and Gilt futures underpinned going into the weekend. Trump hailed a new “friendship” with China’s Xi in the early hours of their meeting. The European calendar has German trade and production data at the start of the session. France and the U.K. also release production numbers and markets will be looking ahead to U.S. nonfarm payroll numbers in the afternoon.
President Trump uncorked a salvo of 50-60 missiles on an airbase in Syria in retaliation for the Assad chemical attack on his own citizens, which was apparently launched from that same base. Trump says he’s calling on all nations to seek the end of slaughter and bloodshed in Syria. It certainly serves as a warning shot to the Syrian regime and others that the new administration plans to back up its words with force, but comes at an awkward time in Russo-U.S. relations while meeting with the Chinese Premier in Florida. The risk averse yen rallied in wake of the strike, while gold shot over $1,260 and the T-note yield plunged from 2.35% to 2.30% before finding support. .US. informed Russia in advance of airstrikes on the Shayrat Airfield and did not target areas of the base where Russian forces were believed to be present, according to Secretary of State Tillerson. He warned that Russia failed to carry out a 2013 agreement to secure Syrian chemical weapons, and that Moscow was “either complicit or incompetent in its ability to carry out the agreement.” Tillerson said the strike was proportionate after a high degree of confidence that Sarin nerve gas was used in a chemical weapons attack.
US reports: The 25k U.S. initial claims plunge to 234k in the first week of April extended a 2k drop to 259k to leave claims back near the 44-year low of 227k in the President’s Day week. Despite the early-March pop, claims have remained below the 2016 average of 263k in every week of 2017. We have a late-Easter this year on April 16, versus an early-Easter last year on March 27, and this may be adding volatility to the March-April claims figures.
German production data much stronger than expected, with overall production rising 2.2% m/m in February from. German trade surplus widens as imports decline. Germany posted a sa trade surplus of EUR 21.1 bln in February, up from EUR 18.9 bln in the previous month, as export growth slowed down to 0.8% m/m from 2.4% m/m and imports dropped -1.6% m/m after rising 2.8% m/m in January. This is nominal data, that has been heavily impacted by oil price developments and import prices, but data are pointing to a rise in net exports in the first quarter of the year, at least on a nominal basis.
Main Macro Events Today
US Employment – March employment data should reveal a 180k headline for the month. This compares to 235k in February and 238k in January. The unemployment rate should hold steady at 4.7% from February, down from 4.8% in January. The balance of risk is to the upside as producer sentiment, consumer confidence and initial claims data all remained strong in March.
Canada Employment – Employment, expected, to 5.0k in March after the 15.3k gain in February. The unemployment rate is seen at 6.7%. Governor Poloz offered a cautious view of Canada’s economy, saying in effect that the recent few odd firm data point should not make us forget about the numerous downside risk surrounding the outlook for Canada’s economy.
BOE – BoE Gov. Carney is due to speak at Thomson Reuters in London.
UK Manufacturing Production – Manufacturing production for February is also due today, which expected to rise 0.3% m/m after the 0.9% m/m contraction in the previous month.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 10th April 2017.
FX News Today
Geopolitical risks will add to edgy market tone. The markets were fairly resilient to news of the U.S. missile strike on a Syrian airbase, on top of a soft March jobs report. But after knee-jerk risk-aversion trades, the focus shifted back to the bearish implications of the FOMC minutes where the discussion of balance sheet normalization suggested a more hawkish Fed stance versus the view of a “dovish tightening” on March 15th. Lots will be in play this week. Traders will look to gauge the global reaction and fallout from Syria, while inflation and production data highlight the economic calendar. Easter holidays will quiet trading into the weekend.
United States: U.S. markets were whipsawed Friday by the surprise news of the missile strike on Syria and the much weaker than expected jobs report, while late afternoon comments from NY Fed’s Dudley knocked bonds and stocks lower. Syria sparked flight to safety, risk aversion trade, which saw bond yields and stock prices dive. But, Dudley’s remarks that suggested a potential delay in rate hikes once balance sheet normalization began would only be a “little” pause, started a selloff and Treasury yields bounced closed at session highs. This week’s economic calendar is light, with key reports not out until Friday, where the markets will be closed for Good Friday. Hence calendar doesn’t come into focus until the end of the week when March CPI and retail sales will be reported. CPI is expected to be flat in March after edging up 0.1% in February. Retail sales for March are also expected to be unchanged following the 0.1% gain in February, due to weakness in gas and autos. The preliminary April consumer sentiment index from the University of Michigan survey is also on tap (Thursday). Confidence is projected to have bounced to 97.5, after edging up to 96.9 in March from February’s 2.2 point drop to 96.3. Other data during the week includes February JOLTS job openings, along with the NFIB small business survey (Tuesday), trade prices for March, along with the Treasury budget (Wednesday), as well as weekly initial jobless claims and March PPI (Thursday).
Fedspeak: Fed Chair Yellen will be on tap (Monday) when she will speak at the University of Michigan Ford School of Public Policy. She will also take questions, and it’s likely she’ll be asked to expound on normalization of the balance sheet, as well as the Fed’s rate path. The dovish voter Kashkari will participate in a Q&A session (Tuesday). And the centrist-hawk Kaplan will speak (Wednesday).
Canada: The BoC’s announcement and Monetary Policy Report (MPR) dominate the domestic proceedings this week. The announcement (Wednesday) is expected to reveal no change in the current 0.50% policy setting alongside a cautiously constructive take on the growth and inflation outlook. Economic data is confined to just a few releases, but they are of interest. Housing starts (Monday) is expected to show a 210.0k growth rate for March, which would be little changed from the firm 210.2k rate in February. The manufacturing survey (Thursday) should show a 1.0% drop in shipment values during February after the 0.6% gain in January. A broad-based 2.4% plunge in February export values underpins our manufacturing shipment estimate. The new home price index (Thursday) is anticipated to rise 0.2% m/m in February after the 0.1% increase in January. The Teranet/National Bank housing price index for March is due Wednesday. Markets are closed Friday for the Good Friday Holiday.
Europe: The focus this week will be mainly on the final March inflation numbers. The initial readings came in lower than anticipated, but were impacted by the later timing of Easter this year, which also means holiday related prices should pick up later. So, the expected confirmation of German HICP (Thursday) at 1.5%, the French at 1.4% and the Italian at 1.3% y/y does not change the overall view that inflation is trending higher against the background of ongoing growth and improvements in labor markets. The highlight of the week is German April ZEW Investor Confidence (Tuesday) expected to rise to 13.2 from 12.8, with geo-political risk factors, the prospect of further Fed tightening, and the ECB’s discussions on rates tapering expected to weigh on sentiment and prevent a more pronounced improvement. Other releases include Eurozone production numbers (Tuesday), while Germany sells EUR 3 bln of 10-year Bunds (Wednesday).
UK: The calendar this week is highlighted by March inflation data (Tuesday) and employment numbers covering February and March (Wednesday), along with the March BRC retail sales survey (Thursday).
Japan: The February current account surplus (Monday) is expected to widen to JPY 2,500.0 bln, from 65.5 bln in January. February machine orders (Wednesday) are penciled in at up 3.0% versus the 3.2% decline in January. March PPI meanwhile (Wednesday) is forecast to heat up to 1.3% y/y from 1.0% in February. Revised February industrial production is due Friday.
Australia: Australia’s calendar is headlined by the Reserve Bank of Australia’s Financial Stability Review (Thursday), which is published twice a year. Economic data features March employment (Thursday), expected to show a 10.0k rebound in total jobs following the 6.4k decline in February. The unemployment rate is projected at 5.9%, matching February. A 1.0% gain in housing finance (Monday) is anticipated for February after the 0.5% improvement in January.
New Zealand: New Zealand’s calendar is again sparse. Retail card spending (Tuesday) is of some interest however, as spending is seen rebounding 0.3% m/m in February after the 0.6% decline in January that was the first pull-back in five months.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 11th April 2017.
FX News Today
European Outlook: Asian stock markets mostly headed south with Nikkei and Topix under pressure as a stronger Yen dragged down exporters and financials. Australia’s ASX was a notable outperformer in Asia. U.S. and European stock futures are also in the red, and oil prices have corrected from levels above USD 53 per barrel with the front end Nymex future currently trading at USD 52.95. Already released U.K. BRC retail sales data came in weaker than expected and showed like for like sales down -1.0%. Still to come the European calendar has German ZEW investor confidence as well as U.K. inflation data and Eurozone production numbers.
Fed Chair Yellen said it’s appropriate for the Fed to gradually raise rates if the economy continues to perform as expected, reiterating a long-standing policy view. She added that the economy is “pretty healthy.” She expects the economy to continue growing at a moderate pace. The global economy is also operating in a more robust way. Inflation is also reasonably close to the FOMC’s target. She noted the drop in the unemployment rate to 4.5% in the March report, and said inflation is reasonably close” though still a little under the 2% goal. The 5-year price measure does show price expectations ticking up however. Most on the FOMC don’t believe inflation is a significant problem at all. So far she hasn’t revealed anything new, nor has she discussed the balance sheet.
White House statements on Syria form the loose outlines of a policy in the region, suggesting that more strikes are possible and containing the Islamic State offers the greatest potential to provide relief to Syria’s citizens. ISIS’ defeat would bring about conditions for new leadership in Syria through the political process. The DoD meanwhile claimed that U.S. missile strikes destroyed 20% of Syria’s operational aircraft. Reality may be a bit more complex, however, since Syria’s Assad is also fighting ISIS, however reprehensible his attacks on his own people. There’s also no room for mistakes, with Russian personnel and equipment on the battle field. Market risk aversion remains elevated and volatility higher, but there’s been limited immediate reaction to these headlines. Oil and gold are settling near the highs of the month.
Melenchon overtakes Fillon in latest French poll. The latest Ifop poll for the first round of the French Presidential election April 23 confirms the trend already seen yesterday, namely that Le Pen and Macron are falling back, while leftist EU critic Melenchon is catching up. The Ifop poll today showed Le Pen and Macron down 2.5% points compared to the last poll at 24% and 23% respectively. Decisively though, unlike the polls so far Fillon is no longer in third place, but leftist EU critic Melenchon has overtaken him and is now polling 19%. So far nothing has changed and Macron and Le Pen are set to go through to the second round, where Macron is tipped to win with a large margin. However, is Melenchon also manages to overtake Macron, the contest would be between two EU critics from either side of the spectrum, difficult to call and poison for markets. French yields already blew out yesterday and are likely to remain under upward pressure ahead of the election.
Main Macro Events Today
UK Inflation – Consumer prices expected to come in at 2.3% y/y, unchanged from February. Producer Prices input expected to fall to 3.3% from 3.7% on February.
German ZEW – A slight rise is expected in the headline ZEW expectations reading to 14.0 from 12.8, with geo-political risk factors, the prospect of further Fed tightening, and the ECB’s discussions on rates and tapering expected to weigh on sentiment and prevent a more pronounced improvement.
FOMC – The dovish voter Kashkari will participate in a Q&A session, at the Minnesota Business Partnership, in Minneapolis.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 12th April 2017.
FX News Today
European Outlook: Japanese stocks headed south in Asia overnight, with the Nikkei losing more than 1% as the Yen strengthened and risk aversion continues to weigh on markets. Once again exporters and financials were mostly hit. Other Asian markets are narrowly mixed, U.K. futures are slightly higher, but U.S. futures are also down. Geo-political concerns continue to weigh on sentiment and curtail risk appetite, which is also pushing out Eurozone spreads, with French markets also jittery ahead of the Presidential election as leftist EU-critic Melenchon continues to catch up in the polls. Oil prices continue to climb and the front end Nymex future is trading at USD 53.51 per barrel. The European calendar has April inflation data from Spain and Portugal as well as U.K. labour market data.
US reports: U.S. Jobs openings climbed 118k in February to 5,743k, from a revised 86k increase in January to 5,625k. The rate was edged up to 3.8% from the 3.7% that had been in place for months. However, the rest of the report was on the weaker side. Hiring’s declined 110k to 5,314k following the 121k increase in January to 5,424k. The rate slipped to 3.6% from 3.7%. Quitters also declined, falling 102k to 3,084k after surging 101k to 3,186k. The rate fell to 2.1% from 2.2%. The slippage in some of the January data are consistent with the downward revisions seen in Friday’s employment report. But the data are still in line with a solid jobs environment.
Eurozone industrial production dropped -0.3% m/m in February, largely due to a -4.7% m/m decline in energy production, which came after a 2.0% m/m rise in January and to a large extend reflects weather conditions over the first two months of the year. The unexpected contraction doesn’t necessarily mean a slowdown in underlying growth conditions and the annual rate bounced back to 1.2% y/y from just 0.2% y/y reported initially. Confidence numbers though have been encouraging and still suggest that the recovery continues, even if weather and Easter effect are likely to distort GDP numbers over the first two quarters of this year.
German ZEW investor confidence jumps to 19.5 in April, from 12.8 in March. The stronger than expected reading lifted the 3 months’ trend rate for the first time since January and with the current conditions indicator also improving the data suggests that the German recovery remains on track.
Main Macro Events Today
BOC Policy Report and Rate Statement – No change in the 0.50% rate setting is expected in today’s announcement, along with a modestly improved growth and inflation outlook that is tempered by ample caution amid still elevated downside risk to the economy.
UK Unemployment Rate – The jobs report expected to show the unemployment rate also remaining unchanged at 4.7%.
President Trump – President Trump is going to give an interview on Fox Business Network at 10 GMT, regarding healthcare, tax reform and Syria issue.
US Crude Oil Inventories – Expected to fall to -0.7M from 1.6M last week.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 13th April 2017.
FX News Today
European Outlook: Asian stock markets were mostly down, with ASX and Nikkei selling off as risk aversion continues to dominate. This also saw Eurozone spreads widening again, although French election jitters at least seem to have eased, which is helping French bond spreads to come in again. Today’s calendar should be bond friendly, with final March inflation data from Germany, France and Italy to confirm the marked deceleration already evident in the preliminary numbers. However, base effects from the later timing of Easter a largely to blame, so the underlying uptrend remains intact, even if core is still to low for Draghi’s liking.
US reports: The firm round of March U.S. trade price data followed mostly upward prior revisions, despite the expected March petroleum import price drop and a strong dollar, leaving a clear uptrend in U.S. trade prices since the oil price trough in February of 2016. Price strength remains skewed toward exports, as seen through most of 2016, after the opposite pattern temporarily emerged in January. The data signal modest upside risk for the remaining inflation reports for March. Import prices have mostly received a lift over the past year from oil prices, though we’re seeing an additional lift from recovering growth abroad and the inventory upturn, alongside OPEC production restraint.
German March HICP inflation was confirmed at 1.5% y/y, unchanged from the preliminary number and down from 2.2% y/y in February. Base effects from energy prices, but also the later timing of Easter are a key reason behind the drop back below the ECB’s 2% limit. The Easter effect meant holiday related prices including package holidays, flights and some services prices related to holidays pick up later this year compared to 2016, when Easter fell into March, so while the headline rate fell back in March this year, it is already set to pick up again in April. The underlying trend is also pointing higher and with rents picking up and the labour market very tight, the risk of a broader rise in prices including second round effects is also rising. No wonder then that Bundesbank President Weidmann continues to argue that the time to think about a phasing out of QE and a return to a neutral stance on rates has come.
Bank of Canada: The announcement, MPR and press conference provided the usual hefty helping of growth, inflation and risk projections/assessment. The BoC held rates steady at 0.50%, matching widespread expectations. Their outlook for growth and inflation was modestly upgraded but still laced with caution, as they remained “mindful of the significant uncertainties weighing on the outlook.” Despite the upbeat domestic data since January and a strengthening and broadening in global growth, the Bank was clear that “material excess capacity remains.” While the Bank did upgrade the growth and inflation outlook, uncertainty remains elevated and Poloz said the Bank is “neutral” in terms of rate cuts or hikes. The Governor said rates are “at the appropriate level given what we see.” Indeed, “The data speak, but the data have not been uniformly positive” but much better than they were for the past year. He reminded that we had a similar run of data last year, and it gave way to things flattening out last year. So “It is right for us to remain cautious.”
Main Macro Events Today
Us Prelim UoM Consumer Sentiment – The preliminary April consumer sentiment index from the University of Michigan survey is on tap. Confidence is projected to have bounced to 97.5, after edging up to 96.9 in March from February’s 2.2 point drop to 96.3.
Canada NHPI and Manufacturing Sales – The manufacturing survey should show a 1.0% drop in shipment values during February after the 0.6% gain in January. The new home price index is anticipated to rise 0.2% m/m in February after the 0.1% increase in January.
US PPI and Unemployment Claims – Weekly initial jobless claims (expected at 245K) and March PPI (expected at 0.0%) are also on tap today.
BOC Gov Poloz – BOC Gov Poloz will give a speech today in Ottawa along with Senior Deputy Governor Carolyn Wilkins.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 14th April 2017.
FX News Today
European Outlook: Bund and Gilt futures lost some of their earlier gains during the European PM session, as stock markets moved up from lows. Yields are also up from lows, but the Bund yield is still down -0.8 bp on the day and the Gilt down -1.2 bp as stock markets remain in negative territory. Risk aversion remains the main driving factor as trading slowed down ahead of the long Easter holiday weekend, with key European markets closed both today and next Monday. Eurozone spreads came in with France continuing to outperform as election jitters eased again. The Gilt curve flattened as the long end outperformed, while in Germany it was the short end that benefited most today, with the 2-year Schatz yield down -2.0 bp, while the 2-year Gilt was up 0.2 bp and the French up 1.0 bp.
US reports: revealed a lean round of March core PPI figures, alongside another super-tight claims reading of 234k, an April Michigan sentiment bounce to 98.0 that sits just below its 13-year high of 98.5 in January, and a bounce in the weekly Bloomberg Consumer Comfort index to 51.0 that also sits just below its 10-year high of 51.3 in mid-March. For March PPI, a 0.1% headline drop with a flat core price figure reflected an expected energy hit but a 0.1% service price decline. For claims, a 1k downtick leaves an April average of just 234k, versus higher prior averages of 251k in March, 241k in February, and 246k in January, leaving upside risk for our 190k April payroll estimate.
The Aussie was the biggest winner yesterday out of the main currencies, showing a 1.2% advance on the euro, which is the day’s loser, and a 0.7% gain versus the U.S. dollar and just over a 1% advance on the yen. The rebound was initially sparked in AUDUSD by Trump’s remarks on forex levels, coming with the Aussie ripe for an upward snap after a period of pronounced underperformance into a long weekend. AUDUSD clocked a nine-day peak at 0.7595. The pair has retraced about one third of declines seen from March highs. AUDUSD and AUDJPY, on the view that geopolitical tensions are likely to remain elevated in the weeks ahead (there are reports of satellite evidence showing that North Korea is preparing another nuclear test, and Japanese PM Abe said today that Pyongyang may have the capability to launch sarin nerve gas warheads).
Canada: Risk aversion remained the general trend on Thursday. Though some short covering into the long holiday weekend helped pare the losses in stocks, news that the U.S. dropped the massive and largest non-nuclear bomb (MOAB) on the caves in the Nangarhar Province of Afghanistan, targeting a “series of Islamic State caves,” extended the selloff. The S&P/TSX was the underperformer in North America, in part as energy weighed. Wall Street’s recovery was undone by the blast and prices resumed their downturn after a prior short covering bid was halted. Thin trading ahead of the long Easter weekend may have added to some of the markets’ moves too. There was little reaction to the manufacturing and home price data. Canada’s new housing price index grew 0.4% m/m in February after the 0.1% gain in January. Canada manufacturing dipped just 0.2% m/m in February after a revised 0.1% gain in January (was +0.6%). The decline in February was shallower than expected (median -0.9%) given the 2.4% plunge in export values.
Main Macro Events Today
US Retail Sales – March retail sales data is out today and should reveal a flat headline (median unchanged) with a 0.3% ex-autos rate. This compares to February figures which had the headline up 0.1% and the ex-autos rate at 0.2%.
US Business Inventories – February business inventory data should post a 0.3% increase for inventories, sales should also be up by 0.3%. This follows a 0.3% January inventory figure and 0.2% for shipments that month.
US CPI – March CPI is out today and we expect to see a 0.0% headline from 0.1% with the core flat at 0.2%.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 17th April 2017.
FX News Today
Political events and will remain firmly in focus this week. The market resurrection since the November election is being assaulted from all angles as the asset allocation pendulum swings back in favour of safety and away from risk. Divergent signals are evident from “hard data” such as weak retail sales and GDP versus “soft data” like surging consumer confidence and ISMs. After campaigning against U.S. globalism and interventionism, Trump continues to speak loudly on Twitter, but is now carrying a big stick. Intervention in Syria and Afghanistan and now with a US Strike Group off the Korean peninsula risks signals continue to ramp up. Elsewhere France goes to the polls at the weekend and President Erdogan appears to have won the referendum in Turkey. Gold trades at $1,290.00
United States: The economic calendar resumes with the Empire State index forecast to slip (Monday) to 15.0 in April from 16.4 in March, along with an update on the NAHB housing market index, seen easing to 70 in April from 71. Housing starts are expected to sink 0.6% in March to a 1,280k pace (Tuesday), though permits are seen rising to 1,260k from 1,216k. Industrial production is set to grow 0.3% in March from 0.1% (Tuesday), while capacity use rises to 76.1% from 75.9%. MBA mortgage applications may again be positively impacted (Wednesday) by the drop in rates with increased geopolitical risks, while EIA energy inventories remain fluid. The Philly Fed index may take a hit (Thursday) and decline to 25.0 in April after the surge to 32.8 in March. Initial jobless claims are forecast to rebound (Thursday) 14k to 248k for the week ending April 15, while the leading indicators index may rise 0.2% in March (median 0.2%) vs 0.6%. The week rounds out (Friday) with April Markit PMI and March existing home sales set to rebound 3.1% to a 5.65 mln pace from 5.48 mln in February. A small handful of Fedspeakers will be on hand this week including, George, Resengren and Kaskari . Earnings continue this week and include; Bank of America, Goldman Sachs, IBM, Morgan Stanley and Verizon.
Canada: Only CPI and Homes sales of note this week. We expect CPI (Friday) to expand 0.5% m/m in March after the 0.2% gain in February. Gasoline prices tracked higher through March. Meanwhile, total CPI is seen slowing to a 1.9% y/y pace in March from 2.0% in February. The trio of core measures remained muted in February, consistent with a tame backdrop of underlying inflation growth. The March existing home sales report is also due Tuesday. Total existing home sales jumped 5.2% m/m on a seasonally adjusted basis in February, and another firm reading would not be a shock.
Europe: Another holiday-shortened week, with most markets still closed Monday for Easter holiday celebrations. Political event risks are moving back into focus meanwhile as the first round of the French Presidential Election on April 23 draws nearer. The data calendar has the final reading of Eurozone March HICP inflation, which is widely expected to confirm the headline rate at 1.5% and core inflation at just 0.7%. The fall back clearly below the 2% limit in March is partly due to the later timing of Easter this year, which saw holiday related prices rising in April rather than March, so the data doesn’t change the picture of gradually rising headline rates, which will keep pressure on Draghi and Co to at least drop the implicit easing bias from the statement, even if the QE schedule is confirmed until the end of the year.
UK: London markets reopen after the Easter break on Tuesday. The calendar is quiet, and Brexit related developments are likely to remain limited ahead of the April-29 EU summit, while negotiations aren’t likely to start in earnest until after German elections in September. The only data release of note this week is retail sales for March (Friday), which we expect to decline 0.3% m/m (median same) and February’s 1.4% m/m gain..
Japan: The March trade report (Thursday) is expected to reveal a narrowed JPY 500.0 bln surplus, versus the revised 813.5 bln in February.
Australia: The Reserve Bank of Australia’s minutes to the April meeting (Tuesday) is the main event, and there may be little of interest in the minutes. The RBA left its cash rate at 1.50% and stuck with dovish guidance in April, as had been general expected. Economic data is in short supply.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 18th April 2017.
FX News Today
European Outlook: Asian markets were mixed after returning from the holidays, with ASX and Hang Seng selling off, while the Nikkei close up 0.35% at 18,418. Australia’s market was hit by a drop in the mining sector amid the slump in iron ore and as concerns about the housing sector is denting the recent optimism in financials. The Hang Seng was hit by catch up trades after losses on mainland exchanges. FTSE 100 futures are also down, while U.S. futures are narrowly mixed. Oil prices are little changed, with the front end WTI future trading at USD 52.65 per barrel. Geopolitical factors continue to weigh and European markets have to digest Erdogan’s narrow victory in his bid to extend the presidential powers and the prospect of a tight Presidential election in France on the weekend. Amid this core bond markets are likely to remain supported and Draghi will keep a close eye on spread amid lingering risk aversion. Today’s calendar is unlikely to bring major surprises, with the final Eurozone HICP reading for March expected to be confirmed at 1.5% and EMU trade numbers usually not a market mover.
RBA Minutes: Steady rates consistent with growth and inflation targets, labour and housing markets “warranted careful monitoring” in coming months, Labour market somewhat weaker than expected, keeping wage growth low, Household consumption growth little weaker than expected in early 2017. CPI expected to pick up above 2 pct in 2017, core inflation to rise more slowly. RBA minutes repeats a rising in A$ would complicate economic adjustment, GDP likely expanded at moderate pace in Q1, impact of cyclone Debbie unlikely to be large. Commodity prices to boost national income in Q1, but terms of trade to decline from here, saw rising risks in household debt, housing markets. Finally – global growth accelerating broadly, Chinese economy appeared to have strengthened; protectionist policies in US still a risk. AUD sold off overnight and AUD USD currently trades at 0.7554 down from Mondays high at 0.7610.
US Data Yesterday: The NAHB homebuilder sentiment index fell 3 points to 68 in April after climbing 6 points to 71 in March (revised from 71), which was the highest since June 2005. It was 58 a year ago too. The single family sales index dipped 3 points to 74 after surging 6 points to 77 previously (revised from 78). But it’s been over 70 for five straight months, a sign of continued demand for new construction, according to the report. The future single family index fell 3 points to 75 after a 5 point pick up in March to 78. The index of prospective buyer traffic slipped 1 point to 52 from 53 (revised from 54). The Empire State headline plunged to a 5-month low of 5.2 from 16.4 in March and a 29-month high of 18.7 in February, versus a similar 6.5 in January. Yet the component data were mostly solid, and the ISM-adjusted Empire State remained unchanged at the 6-year high of 55.2 in March, versus 54.5 in February and 50.7 in January. The April headline drop coincided with declines in the orders and workweek components after big March increases, but all the remaining components rose.
Fedspeak: Fed VC Fischer did not discuss the policy course in his prepared remarks on “Monetary Policy Expectations and Surprises.” Rather it was a more academic summation of the Fed’s communications. He also pondered, can the Fed be too predictable, to which he answered “it is hard to argue that predictability in our reaction to economic data could be anything but positive” and he noted the clarity of the Fed’s reaction function allows the market to anticipate Fed actions and smoothly adjust. However, there could be some difficulties with respect to unexpected shocks to the economy if it appeared the FOMC was not being sufficiently responsive to incoming data that might affect the outlook. He does not look for a major market disturbance akin to the taper tantrum this time around as the FOMC shrinks its balance sheet, especially given the limited market reaction to the indication in the March FOMC minutes that a wind-down.
Main Macro Events Today
U.S. Housing Starts – March housing starts data is out later and should reveal a 1,256k pace for starts, up from 1,246k in January and 1,279k in December. Permits for the month should be 1,260k, up from 1,216k in February and completions should be 1,120k from 1,114k in February. The March NAHB posted an increase to 71, up from 65 in February before dipping back to 68 in April.
U.S. Industrial Production – March industrial production data is also out today expectations are for a 0.4% headline gain after a 0.1% headline in February and -0.1% in January. The capacity utilization rate should rise to 76.1% from 75.9% in February. Mining and manufacturing hours worked from the March employment report were firm which could lend some upside risk to the headline.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Stuart Cowell
Senior Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 19th April 2017.
FX News Today
European Outlook: The global sell off in equities continued in Asia overnight, as commodities continued to slide. Most Asian markets are in the red, with the Nikkei managing to outperform and holding on to slight gains as the Yen retreats and helps to underpin exporters. U.S. stock futures are higher, but U.K. futures are signaling a further slide in U.K. stocks, which were hit by a stronger Pound and May’s surprise announcement of a snap election on June 8 yesterday. The FTSE 100 closed with a nearly 2.5% loss on Tuesday and while Eurozone markets also headed south, losses were much more muted. Core bond futures had a bumpy ride yesterday, but Bund and Gilts managed to close higher in the end and with the Bund contract consolidating gains in after hour trade and U.K. stock futures still in the doldrums, it seems likely that Bund futures will remain supported at the open. French markets meanwhile remain under pressure ahead of Sunday’s first round of the Presidential election, as leftist EU critic Melenchon threatens to throw a spanner in the works. The European calendar has final Eurozone inflation data for March and EU trade numbers for February.
US reports: industrial production data that closely tracked estimates and a housing starts report that modestly fell short, though both reports documented a rebounding factory sector and a housing market that continues to grow despite March setbacks, with big winter distortions from a mild winter and weakness in the vehicle sector. For industrial production, a 0.5% headline rise reflected an 8.6% March surge in utility output after a 13.4% 6-month drop to a 13-year low, alongside a 3.8% vehicle assembly rate drop that partly explains the weak March jobs report. For housing, starts fell 6.8% in March alongside a 3.6% permits rise and a 3.2% climb for completions that proved particularly strong through the winter months.
UK: UK PM announced a snap general election for June 8, clearly looking for a strong mandate from the public as she heads into negotiations to take the UK out of the EU. May, having replaced Cameron mid-term as PM, would strength her position in the event that her Tory party wins the election, which does seem likely given the prevailing disarray of the opposition and with the economy having held up well since the vote to leave the EU last June. The political opposition in the UK is in a mess and the UK economy has performed robustly since the Brexit vote last June. The main opposition party, Labour, have formally supported Brexit in the wake of the referendum, while the much small Liberal Party, is against. The election doesn’t therefore seem likely to derail Brexit. The pound dove on news that PM was to make an announcement, though has recovered most of the losses and held steady when May confirmed the election. Sterling showed gain on the dollar and when averaged against the G3 currencies. The IMF has also raised its 2017 forecast for UK growth to 2.0% from 1.5% forecast in January, and up from the 1.0% growth it was forecast back in October. The IMF still warned that the eventuality of Brexit will dent trade, while there is a risk that Scottish independence will find further impetus as a consequence of the election.
Main Macro Events Today
Eurozone CPI – Eurozone March HICP inflation, which is widely expected to confirm the headline rate at 1.5% and core inflation at just 0.7%. The fall back clearly below the 2% limit in March is partly due to the later timing of Easter this year, which saw holiday related prices rising in April rather than March, so the data doesn’t change the picture of gradually rising headline rates.
NZD CPI (Q1) – Q1 CPI, expected to reveal a 0.8% gain (q/q, sa) after the 0.4% rise in Q4. The annual pace is projected to accelerate from 1.3% y/y in Q4, which would be supportive of our projection for the Reserve Bank of New Zealand to hold rates steady at 1.75% though year end.
Japan Trade Balance – In Japan, the March trade report is expected to reveal a narrowed JPY 575.8 bln surplus, versus the revised 813.5 bln in February.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 20th April 2017.
FX News Today
European Outlook: Stock markets moved higher in Asia overnight, as oil recovered some of its recent losses and amid better than expected trade data out of Japan, which underpinned global growth optimism. U.S. stock futures are also moving higher, U.K. stock futures continue to underperform and remain in the red as ongoing Sterling strength weighs on the index. Elsewhere in Europe stock markets already moved higher yesterday and are likely to join the global stock rebound, which is likely to keep upward pressure on core European yields. Gilt futures have been underperforming in tandem with the FTSE 100 in recent days and in the Eurozone spreads are coming in, as policy markets indicate that its too early for a change in central bank policy thus laying the ground for a steady hand policy decision next week. French markets remain jittery ahead of Sunday’s election, which is turning into a four-way race. Today’s calendar is quiet. Germany has PPI inflation at the start of the session, the Eurozone releases construction output data and there is supply from Spain and France.
German PPI inflation steady at 3.1% y/y in March, unchanged from the previous month. Energy prices dropped over the month in March and contributed to a large extend to the steady headline rate. Excluding energy, however, PPI accelerated markedly to 2.6% y/y from 2.2% y/y in the previous month and versus just 0.6% y/y in December. Clearly underlying inflation pressures are making a comeback, and more so in Germany than in some other parts of the Eurozone and while it is clear that the majority at the ECB doesn’t want to remove the insurance policy against geo-political risks and the flaring up of the debt crisis yet, the discussion about tapering and a gradual removal of the ECB’s policy support won’t go away.
Fed’s Beige Book repeated the economy rose at a modest to moderate pace, as is the usual characterization. Manufacturing grew at a modest to moderate clip, as did employment, though the labor market remains tight. Modest wage increases broadened, and there were bigger increases for skilled workers. Prices rose modestly with input prices generally outpacing gains in selling prices. Consumer spending was varied, with stronger auto sales somewhat offset by softer non-auto retail spending. Residential construction spending accelerated somewhat, even as home sales slowed, partly on a lack of inventory. Nonresidential construction remained strong, but became more mixed in some regions. The report surely keeps the Fed in play, but there’s no urgency for a hike next month, especially given some uncertainties noted over fiscal policy.
The UK parliament voted in favour of the June 8 election, a formality that had been widely anticipated following the prime minister’s calling of it. The vote was 522 to 13. The pound was consolidating gains since Tuesday, following the PM’s call for a snap election. The thinking in markets is that the Tory Party would likely win a much a bigger majority than present, if polls are to be believed, which would give the Prime Minister much more flexibility in upcoming negotiations with the EU. May will also have three years clear after actual Brexit in 2019 before having to hold a general election, which pundits reckon will also give her much greater leeway in forming a possible transitional trade agreement with the EU.
Main Macro Events Today
U.S. Initial Jobless Claims – Claims data for the week of April 15 are out today and should post an increase to 240k from 234k last week and 235k the week prior. Claims continue to remain remarkably tight.
U.S. Philly Fed Index – The April Philly Fed expected to decline to 25.0 from 32.8 in March and 43.3 in February. The Empire State is already out and posted a decline to 5.2 from 16.4 in March.
BOE Gov. Carney – BOE Gov. Carney speech starts at 12:30 GMT at the Institute of International Finance Policy Summit, in Washington DC.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
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Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 21st April 2017.
FX News Today
European Outlook: Stock markets moved higher in Asia overnight, with Japan outperformed as the Yen weakened following indications from BoJ Governor Kuroda that he will keep the accommodative policy in place. Hopes of progress on Trump’s tax reform following comments from Treasury Secretary Munchin helped to underpin gains elsewhere. The move higher in Asia followed gains in the U.S. yesterday, but it remains to be seen how European markets, which mostly managed to close slightly higher, while the French CAC rallied on hopes that Macron will emerge as the winner in Sunday’s election, will react to the latest shootings in France. The EUR seemed little phased, but to close to the election, the incident could underpin support for Le Pen’s hard line stance in what already looks like a very tight race. US. and U.K. stock futures are higher and oil prices are also extending gains with the front end WTI future at USD 52.75 per barrel. Today’s calendar focuses on preliminary PMI readings out of the Eurozone, which also has current account and BoP data. The U.K. releases retail sales for March.
FX Update: The majors have continued to hold narrow ranges into the risk event that is Sunday’s French presidential election, which presents polarized risks for the euro. EURUSD is holding in the lower 1.07s, consolidating after failing to sustain yesterday’s run to a three-week high at 1.077. USDJPY has settled around 109.00. The yen was briefly bid following news of the terrorist attack in Paris, which left two police dead, though impact proved limited. The yen subsequently dipped after BoJ’s Governor Kuroda made dovish remarks during an interview with Bloomberg TV, where he said, “we will stick with yield curve control” and that “we think the current pace of purchases and monetary base increase will continue for some time.” The reaffirmation that the BoJ is sticking to its dovish course, which contrasts with the Fed, and even the ECB, was enough to prompt a wave of yen selling, with USDJPY logged an intraday high at 107.42 before impetus faltered, leaving yesterday’s nine-day peal at 109.49 untested.
U.S. reports: initial jobless claims rose 10k to 244k in the week ended April 15 after slipping 1k to 234k previously, which followed the 24k plunge to 235k for the April 1 week. Continuing claims declined 49k to 1,979k in the April 8 week after dropping 7k to 2,028k previously. That’s a 17-year low. Claims may have been impacted by the Good Friday holiday. Meanwhile, despite the uptick in jobless claims, the data remain near historic lows and reflect a strong labor market, as noted in the Fed’s April Beige Book. U.S. Philly Fed manufacturing index fell 10.8 points to 22.0 in April following the 10.5 point drop to 32.8 in March. Those follow the surprisingly strong 19.7 point surge to 43.3 in February which was the highest level since January1984, and compares to the record high of 49.5 in July 1983.
Main Macro Events Today
EU PMI – The Easter effect may also have an impact on preliminary PMI readings for April, and manufacturing and services sector numbers differently. Eurozone’s manufacturing readings expected at 56.3 from 56.2, while the services sector number expected to be remain unchanged at 56.0, which should leave the composite marginally at 56.3 from 56.4 in March.
UK Retail sales – Retail sales for March, expected to decline 0.3% m/m and February’s 1.4% m/m gain. Meanwhile, total Retail Sales are seen slowing to a 3.4% y/y pace in March from 3.7% in February.
Canadian CPI – CPI, expected to expand 0.4% m/m in March after the 0.2% gain in February. Gasoline prices tracked higher through March. Meanwhile, total CPI is seen slowing to a 1.8% y/y pace in March from 2.0% in February. The Bank of Canada expressed cautious optimism that underlying CPI will gradually move back towards the 2% target.
US PMI & Existing Home Sales – The week rounds out with April Markit PMI and March existing home sales data expected at 2.5% increase in the headline pace to 5.60M from 5.480M in February.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 24th April 2017.
FX News Today
Geopolitics have continued to dominate global markets long after the June 23 Brexit vote and the November 8 Trump victory. And the emphasis will remain on POLITICS this week too following the outcome of France’s presidential election (round 1), and ahead of a “big announcement” Wednesday from President Trump on his tax plan. Eurozone and especially French markets are likely to take a sigh of relief after Macon managed to beat Le Pen in the first round of the French election and Frexit risks subside. Macron will have to wait until the second round on May 7 where he is set to beat Le Pen by a wide margin, before he officially becomes President, but markets are likely to celebrate his victory already today.
United States: U.S. markets will quickly turn to domestic politics as President Trump plans an announcement Wednesday on his tax code overhaul. However, the White House said late Friday that it would be more of a broad outline, and hence not heavy on details. The economic calendar will generally take a back seat this week. The Advance Q1 GDP report (Friday) should be one of the more interesting releases. Growth is expected to slow to a 1.3% pace, from Q4’s 2.1% pace, and continuing the trend over the last several years of measurable erosion in Q1. More timely data includes the April Dallas Fed index (Monday), the Richmond Fed index (Tuesday), the KC Fed survey (Thursday), and the Chicago PMI (Friday). March new home sales (Tuesday) are forecast falling 1.2% to 585k. Also on Tuesday are the February Case-Shiller and FHFA home price indexes, with pending home sales due Thursday. Consumer confidence (Tuesday) should slip to a still strong 124.0 in April after the surprise surge to 125.6 in March. The final April print on consumer sentiment (Friday) is expected to inch up to 98.5. March durable goods orders (Thursday) are expected to be unchanged. Finally, Q1 ECI (Friday) is forecast holding at a 0.5% pace.
Canada: Canada awaits the first look at February GDP (Friday), expected to reveal a flat (0.0%) reading after the 0.6% surge in January. But before that, some additional ingredients for the GDP projection will be released, with wholesale shipment figures (Monday) and retails sales (Wednesday). Wholesale shipments are expected to fall 0.5% m/m in February after the 3.3% surge in January. Retail sales are projected to improve 0.1% after the 2.2% jump in January. The industrial product price index (Friday) is seen rising 0.2% m/m in March after the 0.1% gain in February. Average weekly earnings for February (Thursday) and the CFIB’s Business Barometer for April (Thursday) round out the calendar.
Europe: Today,Even as the markets will be busy digesting the outcome of the first round of the French Presidential election from Sunday, traders will also have a bumper crop of data to analyze, along with the outcome of the ECB meeting. The outcome of the ECB meeting (Thursday) will also hinge to some extent on the French election result. Growth is picking up and this week’s data round is likely to add further to signs that the recovery is not just strengthening, but broadening, and that the slowing in the March HICP to 1.5% y/y from 2.0% was due to special factors. The very full data calendar has first Q1 GDP readings from France and Spain, as well as more April confidence surveys in the form of the German Ifo and the EMU ESI. There also will be a full round of preliminary April inflation numbers. The French HICP (Friday) is expected to bounce back to 1.7% y/y in April from 1.4%, while the Italian reading (Friday) is seen at 1.7% y/y from 1.4%. Spain’s price figure (Thursday) should rise to a 2.4% y/y clip from 2.1%. These should boost the overall April Eurozone CPI (Friday) to 1.8% y/y, up from 1.5% in s month. Even core inflation will be impacted by the Easter effect. Also on the week’s slate are German March retail sales, import price inflation, and GfK consumer confidence, along with French consumer spending data. The ECB meanwhile publishes the latest bank lending survey on Tuesday.
UK: Sterling rallied over 2% last week after British PM May called a snap election, which will take place on June 8 and is widely expected to see her Tory Party greatly increase its majority. Market focus will be on incoming polls, and while the main Labor Party opposition is in disarray, there is a risk that the SNP might win the vote strongly at the election, which would increase the odds for Scottish independence. After a quiet week previously, the UK data schedule picks up, highlighted by the preliminary Q1 GDP estimate (Friday) where we expect growth to slow to 0.4% q/q from 0.7%. Other data include the April CBI surveys on industrial trends (Monday) and the distributive sector (Thursday), both of which we expect to show moderation from respective April readings. Overall, the reports are expected to fit an emerging picture of stagnating economic growth, which the ONS stats office, in explaining unexpected weakness in official March retail sales data on Friday, blamed mostly on rising prices and declining real income.
Japan: Japan’s BoJ meets (Wednesday, Thursday). The Bank is widely expected to keep its very accommodative stance in place with its -0.100% policy rate, while maintaining its control over the yield curve via QE and the asset purchase program. Indeed, BoJ Governor Kuroda confirmed last week that easy policy and steady asset purchases would continue to some time. The data calendar kicks off with March services PPI (Tuesday). That’s followed by the February all-industry index (Wednesday). The balance of releases are out on Friday, beginning with March National CPI, March unemployment, preliminary March industrial production, March personal income is due, along with March PCE, March overall retail sales, March housing starts and March construction orders are also on tap.
New Zealand: New Zealand’s slate has the March trade report, expected to show a NZ$200 mln surplus after the NZ$18 mln deficit in February. Building permits for March are also due Friday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 25th April 2017.
FX News Today
European Outlook: The global stock market rally continued in Asia overnight. In the absence of further news from North Korea global jitters have abated somewhat and with Macron advancing as the favourite in the runoff to the final round of the election, the focus is turning to corporate earnings, the ECB meeting Thursday, and once again Trump’s tax package. The Nikkei remained underpinned by a weaker Yen, Chinese stocks stabilized, after yesterday’s sell off, while Australia and New Zealand were closed for a holiday. U.S. and U.K. stock futures are moving higher and Bund futures, which sold off sharply yesterday as save haven trades were being reversed, already started to stabilize later in the session. Eurozone spreads, which came in sharply yesterday as French and peripheral yields dropped, should also start to stabilize again, especially as more stability in France also means there is less need for Draghi’s insurance policy on rates and QE. Today’s calendar has business confidence data from France, the ECB’s bank lending survey, a German Schatz auction and U.K. borrowing numbers.
Fed’s Kashkari said bank regulations made ending too-big-to-fail worse by raising compliance costs on small and medium sized lenders. Kashkari is speaking at an investment conference at UCLA. And he noted big banks likely hate his call for a higher capital cushion. Dodd-Frank legislation was probably a net-positive for the system, but looking back on it, he added it wasn’t perfect and didn’t really address too-big-to-fail. He’s not real sure of the benefits of negative rates. While they may have helped spur people to invest and spend more, and save less, he’s simultaneously concerned that the psychological channel of negative rates may scare people. He didn’t really address monetary policy given his speech falls within the FOMC’s 10-day blackout period.
European markets continued to celebrate Macron’s victory in the first round of the French election during the European session yesterday. Frexit and Eurozone breakup concerns were being priced out, which triggered a broad rally on European stock markets. The FTSE 100 underperformed but still managed to gain more than 2%, and in the Eurozone, it is the Italian MIB rather than the French CAC 40, which is leading the way by rising nearly 4.5%. The revival of risk appetite saw Bund and Gilt yields spiking higher, while Eurozone peripheral yields dropped sharply and spreads came in. The German 10-year Bund yield is up 9.3 bp while the Gilt yield is up 4.1bp. By contrast the French 10-year is down -8.8 bp, the Italian down -4.5 bp, the Spanish down -5.4 bp and the Portuguese a whopping 14.9 bp. At the short end France clearly outperformed and the French yield curve steepened as the 2-year yield lost -11.2 bp . Macron still has to take on Le Pen in the second round of the contest on May 7, but he is tipped to beat the far right, EU critic by a wide margin.
Main Macro Events Today
UK Public Borrowing – March’s Public borrowing data is also up today, and expected to go up to 1.5B from 1.1B last time.
US Consumer Confidence – April consumer confidence is out today and should fall to 124.0 from 125.6 in March and 116.1 in February. Michigan Sentiment rose in its first release, climbing to 98.0 from 96.9 in March and 96.3 in March. However, the IBD/TIPP Poll for April declined to 51.7 from 55.3 in March.
US New Home Sales – March new home sales data expected at 1.2% headline decline to a 585k pace from 592k in February and 558k in January. The other major housing reports were mixed with starts falling to 1.215 mln from 1.202 mln in February whereas existing home sales rose to 5.710 mln from 5.470 mln in February.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 26th April 2017.
FX News Today
European Outlook: Asian stock markets managed another broad move higher, after gains on Wall Street yesterday. Hopes for U.S. tax cuts and a weak Yen underpinned a nearly 1% rise in the Yen. Gains in Europe had moderated on Tuesday after the initial rally following the French election result, but global equity markets still seem more relaxed. In the Eurozone though more stability on the political front also means that the pressure on Draghi to change the forward guidance is increasing and a Reuters source story yesterday confirmed that while the ECB may want to wait for the second round in France, it could change tack and start laying the ground for exit strategies at the June Meeting. We don’t expect Draghi to tweak the already announced QE schedule for this year, but real tapering will be on the cards in 2018 and the easing bias is likely to be finally scrapped in June. Today’s calendar is empty. German preliminary HICP, EMU ESI economic confidence and the U.K. CBI retailing survey are all due alongside the ECB meeting tomorrow.
U.S. reports: revealed a strong data set for housing, confidence and sentiment. For new home sales, we saw a 5.8% March surge to a robust 621k rate after net upward revisions, though the pace remained a tick below the 622k cycle-high in July of 2016 despite the winter weather-lift. Both the FHFA and S&P/Case-Shiller home price indexes rose in February by 0.8% and 0.4% respectively. Consumer confidence fell in April to a still-robust 120.3 after a March pop to a 16-year high of 124.9 (was 125.6), as confidence fluctuates around its highest levels since December of 2000. Producer sentiment has remained firm in April despite headline drops, as seen with a Richmond Fed downtick to 20.0 from a 7-year high of 22.0 in March and 17.0 in February, versus a 3-year low of -11.0 last August, and Dallas Fed downtick to 16.8 from 16.9 in March and an 11-year high of 24.5 in February. Treasury receipts thus far in April are slightly disappointing however, with a 7% y/y gain despite a lift from last year’s big capital gains.
Australia: Today Australia reported a rise in CPI at 0.5% in Q1 (q/q, sa), matching the growth rate in Q4 and undershooting projections. CPI did accelerate to a 2.1% y/y pace in Q1 from the 1.5% y/y rate in Q4. But that was a touch below projections, but does regardless lift the annual rate above 2.0%. The annual core CPI measures improved: the trimmed mean CPI accelerated to a 1.9% y/y clip in Q1 from 1.6%, while the weighted median CPI picked up to a 1.7% rate from a revised 1.4% growth rate in Q4 (was +1.5%). Notably, the trimmed mean is nearing the bottom of the RBA’s 2.0% to 3.0% target band. The report underpins expectations for steady rates from the RBA through the turn of the year. AUDUSD has dropped to 0.7511 from the 0.7545 level seen just ahead of the report.
Main Macro Events Today
Canadian Retail Sales – Expected at 0.1% gain in February retail sales values. The report, is expected to reveal a 0.2% dip in the ex-autos sales aggregate. There is more forecast risk than usual around this report, as Statistics Canada will present revised figures going back to 2012 that are based on a new sample for the survey.
Pr. Trump Tax Announcement – President Trump plans an announcement Wednesday on his tax code overhaul. As Reuters reported that maybe the biggest Tax Cut since he will propose small business partnerships and sole proprietorships to 15% from 39.6 %.
US Crude Oil Inventories – US Crude Oil Inventories expected to slightly fall to -1.1M from 1M last week.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 27th April 2017.
FX News Today
European Outlook: Asian stock markets are narrowly mixed, with Japan’s stock rally running out of steam and Chinese equities underperforming as Xi stressed that financial security is “strategically important” to the country’s economic and social development, thus adding to signs that the government is stepping up its crackdown on leverage. The BoJ presented an upbeat picture of the economy, but left policy unchanged, giving markets little reason to move as investors digest Trump’s tax plan that was released yesterday. The Nikkei is down -0.19%, CSI 300 down -0.55%, while Hang Seng and ASX manage marginal gains. FTSE 100 futures are down, while U.S. futures are moving higher. In Europe, the focus shifts to the ECB meeting, with Draghi likely to follow the BoJ’s example and refrain from rocking the boat although the hawks will step up their pressure, especially as German and Spanish HICP rates today are set to accelerate, while ESI economic confidence is seen rising further. The calendar also has the U.K. CBI retailing survey. as well as Spanish unemployment and German consumer confidence at the start of the session.
Trump E.O. on NAFTA (North American Free Trade Agreement) withdrawal is being mulled according to a Politico.com article posted earlier: “The Trump administration is considering an executive order on withdrawing the U.S. from NAFTA, according to two White House officials. A draft order has been submitted for the final stages of review and could be unveiled late this week or early next week, the officials said. The effort, which still could change in the coming days as more officials weigh in, would indicate the administration’s intent to withdraw from the sweeping pact by triggering the timeline set forth in the deal.” Additionally, House Freedom Caucus endorses the revised ACA repeal plan, noting “while the revised version still does not fully repeal Obamacare, we are prepared to support it to keep our promise to the American people to lower health-care costs.” It was the very conservative Freedom Caucus that generally derailed President Trumps initial plan. So far this week equity markets have gotten bullish news from France, taxes, and now the ACA. Wall Street remains in the green, but gains are limited so far after the surges on Monday, Tuesday, although a close here on the S&P at 2,398 would be a new record high. This latest news should particularly benefit healthcare and insurance stocks.
U.S. NEC Director Cohn is introducing the Trump tax cuts with some historic comparisons, as rates and the system are stuck at 1986 levels even as other countries have gotten more competitive and gone to a territorial basis. He will hand over the podium to Treasury Secretary Mnuchin next. There will be 3 brackets, 10%, 25% and 35% (reduced from 7) and double standard deductions, repeal the death tax, tax relief for families with child and dependent care, married couples won’t pay tax on the first $24k in income. They will repeal the estate tax and the alternative minimum tax, with a 15% business tax rate. Home ownership and charitable deductions will be retained, but most other tax breaks will be eliminated.
Canada: Retail sales volume dip tracks a February GDP stall-out.The 0.1% decline in retail sales volumes followed a 1.4% surge in January and a 0.6% decline in December. A 0.4% decline in wholesale shipment volumes joined the 0.1% gain in manufacturing volumes. Housing starts improved 2.3% to a 214.3k unit pace in February, suggestive of another positive contribution from construction production. Mining, oil and gas production are on track to make a substantial negative contribution to February GDP. The lack of growth in February GDP should be followed by a resumption of activity in March GDP.
Main Macro Events Today
ECB Confidence & Rate Decision – Confidence indicators continue to look good, inflation is expected to bounce back with the April reading and Macron’s advance in the French election means Frexit and Eurozone breakup risks seem banned for now. Against that background, the hawks at the ECB council will likely intensify their push for a change in the forward guidance at the council meeting tomorrow and Draghi will be under fresh pressure to at least drop the implicit easing bias.
ECB meeting – ECB Monetary policy statement and press conference have been scheduled for 12:30 GMT today.
US Durable Goods – March durable goods orders are expected to be unchanged (i.e. 1.2%) following February’s 1.7% increase, on top of the 2.3% January gain which were supported by transportation.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 28th April 2017.
FX News Today
European Outlook: Asian stock markets are mostly lower, disappointing earnings reports out of Japan underpinned the correction from the two-week rally and investors are holding back ahead of the Golden Holiday. The ASX is a notable outperformer and clinging on to marginal gains. U.K. stock futures are moving higher but U.S. futures are heading south. After pushing stock indices to new highs investors need further impetus to drive the rally further and are likely to remain cautious ahead of the long weekend in Europe. Yields headed south yesterday, especially in the Eurozone, after Draghi did his best to assure markets that nothing has changed and that should help to cushion the impact of the likely jump in HICP inflation today. Today’s bumper data already includes Spanish GDP, UK Preliminary GDP and CPI Flash Estimate. U.S. calendar includes Q1 GDP, Q1 ECI, Chicago PMI and consumer sentiment.
U.S. reports revealed largely expected durable orders figures for March, but with lean inventory data that combined with a downside surprise for advance trade in goods, with weakness in both exports and imports, to trim our Q1 GDP growth estimate to 1.1% from 1.2%. The advance indicators report also revealed weak wholesale inventory data, though with an upside retail inventory surprise that left a slightly stronger inventory path on net. We also saw a 14k pop in initial claims to 257k in the Easter week, though claims remain tight overall despite holiday-related volatility over the past month, leaving an average thus far in April of a lean 244k. Pending home sales fell 0.8% as expected in March after a 5.5% February pop, and the Bloomberg comfort index rose to a sturdy 50.8. More generally, the durables, trade, and claims data have sustained their firming pattern that implies a pick-up in 2017 growth beyond the disappointing outlook for tomorrow’s Q1 GDP report, which appears to reflect the odd recent pattern of Q1 seasonal weakness.
Japan’s data dump revealed tepid inflation and mixed growth figures. Hence, nothing surprising from the CPI, retail sales, employment, consumption, and industrial production reports. The yen is little changed relative to the New York close, with USDJPY at 111.30. The core CPI measure (excludes fresh food but not energy) grew at a 0.2% y/y pace in March, matching the 0.2% pace in February and remaining well below the BoJ’s 2% target. The employment backdrop remains strong, with the unemployment rate at 2.8% in March, matching February’s 2.8%. But wages and income growth are weak, holding back consumption. Granted, retail sales surged 2.1% y/y in March after the 0.2% gain in February. But month comparable sales were a rather anemic 0.2% in March after the 0.3% gain in February. And household spending contracted 1.3% y/y in March after the 3.8% tumble in February. Industrial production fell 2.1% m/m in March (preliminary) after a 3.2% gain in February. Yet the measure grew at a 3.3% y/y pace in March after the 4.7% y/y gain in February, continuing the run of strong y/y gains (3.1% to 4.7%) seen since November. Unfortunately, Japan’s pick-up in industrial production is due to external demand, as the domestic demand backdrop remains rather weak.
Main Macro Events Today
US Advance GDP & UoM Consumer – The Advance Q1 GDP report should be one of the more interesting releases. Growth is expected to slow to a 1.3% pace from Q4’s 2.1% pace, and continuing the trend over the last several years of measurable erosion in Q1.More timely data includes Chicago PMI and the final April print on consumer sentiment which is expected unchanged at 98.
UK Prelim GDP – The UK data schedule picks up, highlighted by the preliminary Q1 GDP estimate where growth expected to slow to 0.4% q/q from 0.7%.
EU CPI – April Eurozone CPI expected at 1.8% y/y, up from 1.5% last month.
Canadian GDP – Canada awaits the first look at February GDP, expected to reveal 0.1% reading after the 0.6% surge in January.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 1st May 2017.
FX News Today
A convergence of politics, as well as monetary and fiscal policy will collide this week after President Trump finishes commemorating his first 100-days in office over the weekend. Despite lobbying Congress hard for a second vote on the ACA repeal and a Continuing Resolution (CR) on government funding, those cans were kicked down the round with a delayed vote on the former and successful one-week funding bill that will buy a little more time on both fronts. Passed by the House, the CR will keep the government running next week allowing lawmakers more time to debate on a long-term bill to take operations through the rest of the fiscal year. The Senate also unanimously passed the CR to keep the government funded for one more week, while leadership of both houses indicated they are close to a broad spending plan. Markets will weigh these developments closely ahead of the FOMC meeting and April payrolls. Asia cools off this week at least in terms of data, if not geopolitics, after N. Korea fired another failed test missile. In Europe, in wake of the mixed messages from the more bullish-but-dovish ECB last week focus will be returning to eurozone politics with the second round of presidential elections in France at the end of the week
United States: The U.S. economic calendar will be overshadowed by the April employment report, which looms at the end of the week. April nonfarm payrolls are forecast to increase by 188k vs the subpar 98k reading in March, with a 98k private payroll gain. The unemployment rate is expected to hold steady from 4.5% last month. The week will start out with March personal income (Monday), seen rising 0.3% vs 0.4%, while April ISM is forecast to dip to 56.6 from 57.2 (Monday). April vehicle sales are projected to rebound (Tuesday) and MBA mortgage market indices are due (Wednesday) following the rebound in rates from post-election lows, which could crimp refits. The April ADP Employment report (Wednesday) should post a 190k gain (median 200k), below the March figure of 263k. April ISM services may bounce (Wednesday) to 55.9 from 55.2, while EIA energy inventory data is due. The March trade deficit is set to widen to -$44.7 bln from -$43.6 bln (Thursday) and Q1 productivity is seen flat, down from 1.3% in Q4. Initial jobless claims may dip 11k to 246k (Thursday) for the week ended April 29, while March factory goods are expected to be flat vs 1.0%. In addition to the jobs report (Friday), consumer credit is forecast to increase $16.0 bln from $15.2 bln.
Canada: Canadian calendar is rather lean in terms of the number of top tier releases this week, the reports that are out have the potential to move the market. Employment (Friday) is expected to rise 20.0k in April after the 19.4k gain in March. The risk remains for a pull-back in jobs given the robust gains in total jobs that stretch back to August with only one interruption (November’s jobs tally slipped 2.4k). The earnings figures will be of as much interest as the total jobs figures, with another anemic month of earnings growth consistent with the Bank of Canada’s view that “material excess capacity remains” in Canada’s economy. The March trade report (Thursday) is projected to show a trimming in the deficit to -C$0.8 bln from the -C$1.0 shortfall in February that ended the upbeat run of trade surpluses that lasted from November of 2016 to January of this year. Exports are seen making some headway (+0.7%) after the 2.4% tumble in January. The loonie was weaker against the U.S. dollar, which is supportive of export growth. The Ivey PMI for April is due Friday while the Markit manufacturing PMI is scheduled for Monday. Dealer reported vehicle sales for April are expected on Tuesday. BoC Governor Poloz delivers a speech (Thursday) in Mexico City to the CanCham Mexico and Club de industrials. The speech will be available on the Bank’s website at 16:10 ET.
Europe: Data releases this week are unlikely to change the overall picture of a cyclical recovery that is also starting to lead to broad improvements on the labour market. After French and Spanish GDP numbers are looking for an overall Eurozone GDP growth (Wednesday) of 0.5% q/q, unchanged from Q4. The second quarter started with a strong round of confidence data and an encouraging revival in France which is catching up and adding to signs that the recovery is not just focused on Germany. The final round of April PMI readings should confirm the Eurozone Manufacturing PMI at 56.8, and the Services reading at 56.2 which should leave the composite at 56.7, indicating a strong expansion of economic activity. Markit reported with the release of preliminary numbers that employment growth continues to be strong Especially the German labour market is looking quite tight already and we are looking for a further improvement in the sa jobless number of -11K leaving the April jobless rate unchanged at a record low of 5.8%. Overall Eurozone numbers are more backward looking but the March reading should fall to 9.4% from 9.5%, although developments remain uneven across countries and the high rate of youth unemployment remains a key challenge for politicians going ahead.
The calendar also has Eurozone PPI and supply from France and Spain, while Germany sells EUR 3 bln of 10-year Bunds on Wednesday. There is plenty of ECB speak from Lautenschlaeger, Praet and Draghi among others, but comments are likely to focus on Draghi’s main message from last Thursday, namely that nothing has changed so far.
UK: The business week in London markets starts on Tuesday after the May Day holiday on Monday. The calendar this week is highlighted by the April PMI surveys. The manufacturing PMI (Tuesday) expected at a 52.0 reading after the 52.0 outcome in March. A similar abatement is anticipated in the construction and services PMIs (due Wednesday and Thursday, respectively), seeing the former at 52.0, down from 52.0, and the latter at 54.5, down from 55.0 in March. In-line data would reaffirm a picture of an economy in the early throws of stagnation, amid eroding real household incomes, ongoing government austerity, political uncertainty, and declining investment.
Australia: Australia’s calendar features the Reserve Bank of Australia’s meeting (Tuesday), expected to reveal no change in the current 1.50% rate setting. The statement is projected to be consistent with no change in rates through year end. The Bank’s Statement on Monetary Policy (Friday) will provide updated growth and inflation projections. Governor Lowe speaks (Thursday) on “Household Debt, Housing Prices and Resilience.” Economic data is headlined by the March trade report (Thursday), projected to show a A$3.5 bln surplus in March after the A$3.6 surplus in February. The Melbourne Institute Inflation Index for April is due Monday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
MACRO EVENTS & NEWS OF 2nd May 2017.
FX News Today
European Outlook: Asian stock markets tried to move higher after the holidays, but Hang Seng and ASX are now slightly in the red, as is the CSI 300, while the Nikkei outperforms and is posting a 0.58% gain, helped by a weaker Yen and testing the ceiling that has been in place since December ahead of the holidays. The RBA left the cash rate unchanged, while highlighting the high level of debt in China as a medium term risk. FTSE 100 futures are moving higher after yesterday’s holiday, while U.S. futures are down, with investors looking ahead to the FOMC decision. Today’s European calendar has the final readings of Eurozone manufacturing PMIs, which are expected to confirm preliminary numbers, while the U.K. manufacturing PMI is expected to dip slightly to 54.0 from 54.2 in the previous month. The Eurozone also has Eurozone unemployment data for March and there is ECB speak from Noy and Nowotny.
FX Update: USDJPY has lifted for a second consecutive day, this time logging a new six-month peak at 112.10. EURJPY and other yen crosses are also up quite sharply, reflecting general underperformance of the Japanese currency. EUR-PY clocked a seven-week high at 122.46. The reflects rising global investor risk appetite, which has been weighting on the safe haven yen in accordance with the normal pattern. This comes with various bellwether Wall Street and global indexes trading at or near record highs, with the CBOE implied vols “fear gauge” tipping to the lowest level since 2007 yesterday. News that Greece reached a deal with the IMF and EU, along with a continued strong lead in French opinion polls for pro-EU presidential candidate Macron, have helped maintain a general risk-on vibe, though stock markets have been mixed in Asia today, while U.S. and European equity indexes are slightly lower. The RBA did the expected and left monetary policy unchanged following its latest meeting, and upgraded the language on its outlook for employment in the statement, noting unemployment should “decline gradually over time” while saying that it expects a “gradual further increase in underlying inflation” as the economy strengthens. AUDUSD rallied to an eight-day high of 0.7556 in the wake of the statement, since ebbing to the 0.7530 area.
U.S. reports revealed weaker headlines than expected, but massive upward revisions in the January and February construction spending data left a stronger than expected data mix that lifted our Q1 GDP growth forecast to 0.9% from 0.7%. For construction, a 0.2% March drop followed boosts in the nonresidential, public, and home improvement components, with a firm new home construction trajectory. This accompanied a 0.2% personal income rise with flat consumption that modestly undershot assumptions, alongside a big 0.3% “real” increase thanks to weather-led firmness in service consumption and an expected 0.2% headline PCE chain price drop. An ISM drop to a 4-month low of 54.8 from 57.2 in March and a 30-month high of 57.7 in February still left a firm level, and the ISM-adjusted average of the major surveys is still on track for a solid 56 reading from a 57 cycle-high in February and March.
Main Macro Events Today
UK Manufacturing PMI – The manufacturing PMI expected to reveal a fractional ebb to a 54.0 reading after the 54.2 outcome in March.
EU Manufacturing PMI and Unemployment Rate – The final round of April PMI readings should confirm the Eurozone Manufacturing PMI at 56.8, while March’s unemployment rate expected to fall at 9.4% from 9.5% last time, although developments remain uneven across countries and the high rate of youth unemployment remains a key challenge for politicians going ahead.
NZD employment report – New Zealand’s calendar has the Q1 employment report, projected to show a 0.8% gain (q/q, sa). The unemployment rate is seen to be unchanged at 5.2%.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 3rd May 2017.
FX News Today
European Outlook: Asian markets were thinned out by holidays with Japan, South Korea and Hong Kong closed, CSI and ASX are in negative territory ahead of the Fed announcement. Poor Apple Inc earnings results weighed on sentiment but this didn’t prevent Taiwan markets to move slightly higher. No surprises are expected from the FOMC — not any change in rates nor any clear hint of the timing of the next move, but surveys suggest another rate hike in June. There’s no press conference or release of estimates this time around, thus the only update on Fed thinking will be via the policy statement, and that shouldn’t be too revealing. U.K. and U.S. stock futures are also down, pointing to a correction in European markets, which managed to extend gains into the close on Tuesday. The DAX cleared the 12500 mark yesterday and was at new all-time highs. The European calendar has German unemployment data for April as well as the first reading of Eurozone Q1 GDP, a German 10-year Bund sale and the U.K. Construction PMI for April.
FX Update: The dollar majors have been plying narrow ranges into the Fed’s policy announcement later today, where Bloomberg calculates there is a 12.8% chance for a 25 bp rate hike. EURUSD eked out a three-session peak at 1.0936, and is presently settled near net unchanged on the day at 1.0921 bid. USDJPY has settled to an orbit of the 112.00 level, below the one-month peak seen yesterday at 112.30. Sterling has come under pressure heading into the London open, with Cable have shed over 50 pips in making a 1.2884 low. This follows yesterday’s failure to test last week’s six-month high in the wake of a strong UK manufacturing report, and with all the signs suggesting that the Britain and the EU are heading into tough Brexit negotiations. Market conditions have been thin so far today, with Japan and Hong Kong out.
U.S. ACA repeal update: “very good progress” is being made on Obamacare repeal, said House Speaker Ryan, following remarks from Majority Whip Scalise that the modified healthcare plan would still protect those with pre-existing conditions. A vote on the bi-partisan intermediate government funding bill is scheduled for tomorrow, while a vote on ACA repeal has yet to be set. Meanwhile stocks and yields are heading lower after soft initial auto sales figures for April.
Main Macro Events Today
EU GDP – Eurozone GDP growth of 0.5% q/q, from 0.4% of Q4. In the past, variations in the timing of Easter have had an impact on quarterly growth rates and maybe it’s better to see Q1 and Q2 in conjunction to better assess the underlying trend.
US ADP Employment & ISM Services – The April ADP Employment report should post a 180k gain, below the March figure of 263k. April ISM services may bounce to 55.8 from 55.2, while EIA energy inventory data is due.
FOMC Statement – FOMC began its meeting and will announce its decision today. No change is widely expected. There’s no press conference this time around, or release of economic and dot-plot forecasts, so the statement will be scrutinized for hints on the normalization path.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 4th May 2017.
FX News Today
European Outlook: Bund futures headed south in after hour trade yesterday and yields spiked in the wake of the FOMC announcement, which saw the Fed reiterating plans for gradual rate hikes. Asian stock markets were mostly down, the CSI managed to hang on to marginal gains however, and Japan remained closed for this week’s holidays. Metals dragged markets down as iron ore futures tumbled amid inventory concerns. U.S. and U.K. stock futures are moving higher though, pointing to opening gains, while the drop-in Bund futures late yesterday suggests opening losses on bond markets. Today’s calendar has services PMIs from the Eurozone and the U.K. as well as the Norges Bank decision. The U.K. also has lending data and the Eurozone retail sales numbers for March.
U.S. reports: revealed a solid round of April ISM-NMI figures that highlighted the upside risk for our 190k April payroll estimate, though we also saw a restrained round of April ADP figures after an outsized March gain. For sentiment, a 57.5 April reading sat just below the 16-month high of 57.6 in February, versus an interim 55.2 figure in March, while the ISM-adjusted measure similarly returned to the 18-month high of 56.5 from February, versus an interim 53.9 figure in March. For ADP, a 177k April rise slightly above expectations, though the March ADP surge was only modestly trimmed to 255k from 263k, leaving substantial room for “catch up” in Friday’s jobs data. The March payroll data may have been depressed by bad weather in the BLS survey week, and ADP figures aren’t impacted by weather disruptions as inactive workers generally remain on company’s payrolls, so the big net-rise for ADP over the March-April period suggests upside risk on Friday.
FOMC left policy unchanged with a 0.75% to 1.00% target band. The Fed’s statement acknowledged the slowing in Q1 growth but said it was “likely to be transitory.” There was no new information on the balance sheet. For more of the guts of the statement, the Fed added that the labor market continue to strengthen, even as the economy slowed. Household spending rose only modestly but the fundamentals underpinning the continued growth of consumption remained solid. Business fixed investment firmed. Meanwhile, annual inflation has been “running close to the Committee’s 2% longer-run objective,” said the Fed, which was a small but important shift from March where the Fed said “inflation was “moving close to the…2% target.” It looks like price pressures are even nearer the goal. Near term risks to the economic outlook remain in balance. The vote was a unanimous 9-0. The outcome is as was expected. The door was left wide open for a tightening in June if the data tracks the expected Q2 rebound.
Europe: EMU Q1 GDP growth came in at 0.5% q/q, while the annual rate fell back to 1.7% y/y from 1.8% y/y. There was no breakdown with the preliminary release but in any case, it is likely that the different timing of Easter this year has led to some distortions, as the services sector will have gotten a boost in April this year, rather than in March, while production will have been stronger without the holiday period in March this year compared to 2016. Hence it is widely expected to see the ECB removing its easing bias at the June meeting, when the updated set of staff forecasts are also due. The UK April construction PMI beat expectations in rising to a headline reading of 53.1. Residential construction and civil engineering activity drove the uptick in expansion in the sector. Both construction and the manufacturing PMI’s have beaten expectations, rebounding from a recent soft patch and showing once again that the UK economy is performing resiliently as the sharp end of the Brexit process draws closer. Attention will now fall on the services PMI release today, as this sector accounts for nearly 80% of the economy.
Main Macro Events Today
US Data – The March trade deficit is set to widen to -$44.5 bln from -$43.6 bln and Q1 productivity is seen flat down from 1.3% in Q4. Initial jobless claims may dip 10k to 247k for the week ended April 29, while March factory goods are expected to be at 0.4% vs 1.0%.
Canadian Trade balance and BoC Governor Speech – The March trade report is projected to show a trimming in the deficit to -C$0.8 bln from the -C$1.0 shortfall in February that ended the upbeat run of trade surpluses that lasted from November of 2016 to January of this year. Also, BoC Governor Poloz delivers a speech in Mexico City to the CanCham Mexico and Club de industrials.
ECB’s Draghi Speech – There is plenty of ECB speak from Lautenschlaeger, Praet and Draghi among others, but comments are likely to focus on Draghi’s main message from last Thursday, namely that nothing has changed so far.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 5th May 2017.
FX News Today
European Outlook: Asian stock markets headed south as oil dropped below USD 45 per barrel for the first time since November last year. Chinese equities meanwhile continued to decline amid ongoing efforts by regulators to curb leverage and speculation. Japan and South Korea remained closed for holiday and investors are looking ahead to today’s U.S. jobs report. With a pretty empty data calendar in Europe, the latter will remain in focus and it remains to be seen whether Eurozone markets, which already “celebrated” Macron’s clear lead in the polls ahead of Sunday’s presidential election yesterday, can push things further today, or whether caution returns, especially ahead of the U.S. numbers. Bund futures, which sold off sharply yesterday, moved sideways in after hour trade and FTSE 100 and U.S. stock futures are heading south and after the DAX reached new all time highs yesterday there may be some profit taking.
U.S. reports: revealed a better than expected round of March trade figures but downside surprises for the nondurable data in the March factory goods report that trimmed our Q1 GDP estimate back to the 0.7% advance figure despite firm equipment readings, with an $8 bln downward inventory revision that offsets an expected $8 bln construction boost. We also saw a tight round of initial claims figures at the close of April that added to the upside risk for 185k April nonfarm payroll estimate in tomorrow’s jobs report. The Q1 productivity figures revealed the expected 0.6% Q1 drop after a Q4 boost to 1.8% from 1.3%, while the weekly Bloomberg consumer comfort index rose to a 50.9 figure that sits just below the 51.3 cycle-high from mid-March. All the data support the narrative that the Q1 growth figures were depressed by seasonal weakness that will be sharply reversed in Q2 and Q3.
U.S. House “narrowly passed” the healthcare reform bill that aims to replace ACA with a new program, though the final shape of the package will be determined by the Senate, which just signed off on the temporary government funding bill through September. U.S. Senate has passed the $1.1 tln spending bill to fund the government through the rest of the fiscal year. The vote was 79-18. It has been passed on to the president for his signature which will finalize the legislation (the current CR expires Friday). He sign it, even though it doesn’t include many of his campaign priorities, including funding the border wall. It also doesn’t include the proposed $18 bln in spending cuts for healthcare, the environment, and other programs. But, it provides some $21 bln of the requested $30 bln in additional military funding.
Main Macro Events Today
US Employment – April employment data is out today and expected at 185k headline that exceeds the 98k headline and March but falls short of February’s 219k bounce.
Canada Employment – Employment is expected to rise 20.0k in April after the 19.4k gain in March. The risk remains for a pull-back in jobs given the robust gains in total jobs that stretch back to August with only one interruption. The Ivey PMI for April is due today as well.
Fedspeak – Fedspeak resumes today with speeches from Chair Yellen, her Vice Chair Fischer and SF Fed’s Williams. Chicago’s Evans, Boston’s Rosengren and St. Louis’ Bullard will take part in a panel discussion. Yellen is slated to speak on “125 Years of Women’s Participation in the Economy” at 13:30 ET.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 8th May 2017.
FX News Today
Global growth has become less of a worry, even though there are still plenty of challenges ahead. The solid U.S. April jobs report supports the view that Q1 weakness was transitory. And it adds to the growing body of evidence that shows the smaller Eurozone economies are catching up to Germany’s drive such that the expansion is deepening and broadening. The U.K. has been surprisingly resilient to Brexit fallout. And though Asia is more of a question mark with some slowing in China and still weak consumption in Japan, the region looks to remain rather robust.
United States: The U.S. employment report went a long way toward restoring confidence in the expansion, and even hinted that the Trump bump and rise in producer sentiment might be working their way into the real sector given the broad-based nature of the gains. There are a couple of important indicators due out this week, including CPI and retail sales, though neither are likely to materially change the view that the weakness in Q1 was temporary. Along with data, the $62 bln May refunding is on tap. Some concessions were made into the weekend, but the offerings could prove difficult amid rising risk appetite. Earnings reports will remain a factor too, but the calendar is considerably lighter this week as the season dies down. Other data reports out this week include the April NFIB Small Business Optimism Index (Tuesday), which has improved significantly since the Trump election. JOLTS job openings for March (Tuesday) will give the markets another angle on the labor market. Then trade prices (Wednesday) will provide another view on inflation parameters. The April Treasury budget (Wednesday) will give a more complete view on the important tax season inflows and outflows. PPI for April (Thursday) will highlight inflation developments from the producer side.
Canada: The Canadian calendar has a limited amount of economic data and nothing from the Bank of Canada this week. Housing starts (Monday) are expected to moderate to a still elevated 220.0k pace in April from the 253.7k pace in March. Building permit values (Tuesday) are projected to expand 5.0% m/m in March after the 2.5% drop in February. The March new home price index (Thursday) is seen rising 0.3% m/m in March after the 0.4% gain in February. The next event on the BoC calendar is the policy announcement (May 24), which no change to the current 0.50% rate setting expected alongside a still cautiously constructive outlook for growth and inflation that maintains our ongoing view that no change in rates will prevail through year end.
Europe: With markets digesting the French election, German manufacturing orders for March (Monday) may attract less attention than usual at least if there is no major negative surprise in the wings. The German orders data will be the most forward looking of this week’s data round, which otherwise focuses mostly on Q1. German industrial production (Tuesday) is expected to have corrected -0.4% m/m in March, after expanding strongly in February, while French production should rebound from the drop-in February and rise 1.0% m/m. This should leave the Eurozone number up 0.4% m/m. German trade data for March will complete the German Q1 cycle ahead of the preliminary GDP release (Friday). After the robust Eurozone release, the German growth number is expected to come in at 0.6% q/q, up from 0.4% q/q in Q4 last year.
UK: The stellar set of April PMI surveys of last week showed that the UK economy remains resilient in the face of Brexit uncertainties. The UK calendar this week includes the May BoE MPC meeting and publication of the central bank’s latest quarterly Inflation Report (Thursday). No change to prevailing policy settings is widely anticipated, while the recent signs of accelerating economic activity after a relative soft patch in Q1, along with robust global growth, should feature in both the policy meeting’s minutes and the inflation report narrative. Data include the April BRC retail sales report (Tuesday), where expected to rise by 0.4% y/y after the -1.0% figure in the month prior. The late timing of Easter this year has messed with seasonal adjustments somewhat, so markets will be looking at the underlying three-month figure for better clarity. Industrial production data for March are also up (Thursday), which expected to be improved to a -0.4% m/m figure after -0.7% in February. Trade data will be released at the same time.
Japan: In Japan, April consumer confidence (Monday) should slip back to 43.5 from 43.9, while the March current account surplus (Thursday) is expected to narrow to JPY 2,400 bln from 2,813.6 bln. April bank loan figures are also due Thursday.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 9th May 2017.
FX News Today
European Outlook: Asian stock markets outside of Hong Long slipped after yesterday’s rally, which saw Japan’s Topix rising to the highest level since December 2015. The Nikkei is little changed on the day and Chinese stocks fluctuated. Weak retail sales data from Australia weighed on forex and equity markets and investors are taking stock while waiting for a catalyst before making further headway. In Europe FTSE 100 futures are moving higher, despite a stronger Pound ahead of the BoE meeting and as PM May is heading for a convincing victory in the June election. The DAX may have risen above 12700 for the first time ever last Friday, but is struggling to keep that level amid bouts of profit taking as the Macron rally peters out and the focus turns to ECB tapering. Mersch yesterday all but confirmed that the ECB will change its forward guidance in June and tapering announcements are now being expected for September. With that in mind Eurozone spreads are likely to remain volatile, as markets try to assess what the withdrawal of the ECB’s support measures means for peripherals. Today’s calendar has Italian retail sales data. Already released U.K. BRC retail sales were much stronger than anticipated, but March/April are likely to have been impacted by the different timing of Easter this year.
Fedspeak: Fed’s Mester discussed yesterday the economic outlook before the Chicago Council of Global Affairs. As she stated, she wants rate action taken before the Fed’s goals are met as she’s worried about falling behind the curve, according to her prepared remarks on the economic outlook. It’s important for the FOMC to remain “very vigilant against falling behind.” If price pressures become excessive as the labor market becomes unsustainably tight, policymakers may have to “move rates up steeply,” and that could risk recession. And she believes the Fed has achieved its maximum employment goal. She would also like the Fed to start normalizing its balance sheet this year. She is a hawk, but doesn’t vote this year. Fed’s Bullard on the other hand, believes the current rate setting is appropriate, according to a speech on the natural rate at an Atlanta Fed conference. He stated that the “natural rate of interest, and hence the appropriate policy rate, is low and unlikely to change very much over the forecast horizon.” And he added the U.S. seems to be in a low-growth state, though “a case could be made that some recent observations have been more consistent with the high-growth state.” Bullard is not a voter this year.
Germany: posted a sa trade surplus of 19.6 bln in March, down from EUR 21.2 bln in the previous month. Exports dropped 0.4% m/m , while imports surged 2.4% m/m, the latter after falling -1.6% m/m in February. March data brought the total for the first quarter of the year to EUR 59.7 bln, down from EUR 60.0 bln in the previous quarter. These are nominal numbers, that do not account for fluctuations in exchange rates and oil prices. And with import prices picking up that suggests real data will look somewhat better. Overall though net exports actually detracted from overall growth last year, and are still pretty subdued. The current account surplus widened in March, and rose 1.2% y/y in Q1, thus adding further ammunition to the critics of Germany’s large surplus.
Main Macro Events Today
US NFIB & JOLTS – Today, the April NFIB Small Business Optimism Index is out, which has improved significantly since the Trump election. Also, we will see JOLTS job openings for March will give the markets another angle on the labor market.
Canadian Building Permit – Building permit values are projected to expand 5.0% m/m in March after the 2.5% drop in February. Looking back, the 2.5% decline in building permit values in February came after a revised 5.8% gain in January (was +5.4%).
Fedspeak – St Louis Fed’s Bullard will be on a panel discussing interest rates today. The dove Kashkari will speak at a high-tech conference. Rosengren speaks at an NYU conference on risk management. Kaplan will speak at an interest rate summit.
AU Budget Report – Australia’s calendar has Annual Budget Release today.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
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Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 10th May 2017.
FX News Today
European Outlook: Asian stock markets moved higher, led by shares in Hong Kong, which rose to a 21 month high led by financials. Strong leads from the U.S. underpinned markets, although elsewhere gains were more muted and U.S. and FTSE 100 futures are heading south, indicating a correction from yesterday’s surge higher that saw the DAX climbing further above the 12700 mark and the FTSE 100 closing above 7300. European yields moved higher yesterday as investors flocked into stocks, with the Bund still outperforming Gilts, as Eurozone markets price in tapering and rate steps amid strong growth indicators and receding political risks. Mersch all but confirmed the expected change in guidance on Monday and Draghi will have a further chance to clarify the central bank’s stance at his speech to Dutch lawmakers today. In the U.K. the BoE starts its two day meeting, with expectations for an unchanged policy stance. The European data calendar has production data out of Italy and France as well as Norwegian inflation numbers and French trade.
FX Update: The dollar has traded modestly lower so far today, which some market narratives link with Trump’s firing of FBI Director Comey. USDJPY settled back under 114.00 after clocking a two-month peak at 114.33 yesterday. The high caps an impressive winning streak, with the pair having climbed in every session bar three over the last three weeks as it lifted out of the 108.12 six-month low posted on April 17. EURUSD settled in the upper 1.08s after logging a 12-day low yesterday at 1.0863. The narrow USD index is down by 0.2%, correcting some after logging a 19-day high yesterday. Oil prices have continued to see relatively steady price action, near $46.0 in the case of the WTI future, while most Asian stock markets have gained today following a flat session on Wall Street yesterday.
US reports: report revealed divergent surprises, with a disappointing flat figure for March wholesale sales after a 0.7% February increase, but a 0.2% inventory rise that beat the 0.1% drop in the advance indicators report, after a 0.3% February rise. Sales undershot inventories after beating inventories for three consecutive months, hence slowing the downtrend in the inventory-to-sales (I/S) ratio to leave a 1.28 ratio for a third consecutive month. Now a Q1 GDP growth boost expected to 0.9% from 0.7%, with a $7 bln boost in wholesale inventories that accompanies an $8 bln downward factory inventory revision, U.S. JOLTS showed March job openings rose 61k to 5,743k from a downwardly revised 5,682k (was 5,743k). But the job openings rate was steady at a solid 3.8%. Hirings rebounded 11k to 5,260, also from a downward revision to 5,249k (was 5,314k). The rate was flat at 3.6%. Quitters, a favorite stat of Chair Yellen, increased 80k to 3,116k from 3,036k, with the rate holding at 2.1%. Data aren’t new and will be taken in stride, though they continue to show a tight labor market.
Fedspeak: Fed hawk Rosengren warned that the jobless rate at 4.4% is below “natural full employment” estimates at 4.7% and a further drop below 4.0% “would likely be accompanied by higher inflation, overheating the economy and prompting higher rates.” Also, balance sheet shrinkage shouldn’t be disruptive, said the non-voting Fed president, in post speech Q&A. The market can absorb balance sheet shrinkage, if it’s done gradually. It should be highly tapered, and part of the intent is to let mortgage rates rise. The Fed is still discussing its portfolio strategy, it’s still pretty “speculative,” he admitted, but he hopes to normalize the balance sheet will begin relatively soon, repeating recent comments. He also said the Fed is likely to hit zero rates again in future recessions.
Main Macro Events Today
ECB Speech – ECB President Draghi speaks at the Dutch House of Representatives, in Netherlands, about the impact of Monetary policy.
US Imports and Exports & Budget Statement – April trade price data is out today and expected at 0.1% increase for exports with a matching 0.1% increase for imports. This would follow March data which had exports up 0.2% and imports down 0.2%. Oil prices rebounded in April after a dip in March which should help support the data. Also, April’s Treasury budget is out and will give a more complete view on the important tax season inflows and outflows.
RBNZ Rate Statement & Press Conference – Reserve Bank of New Zealand meeting. No change in the 1.75% rate setting is anticipated, along with a statement that is consistent with steady rates through year-end.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 11th May 2017.
FX News Today
European Outlook: Asian markets managed modest gains as higher oil prices underpinned energy producers and indices near multi-year highs. Mainland China underperformed once again amid official efforts to curb leverage. New Zeeland benchmarks meanwhile led the move higher after the central bank said it will keep rates at record lows for an extended period of time. U.S. futures are heading south but FTSE 100 futures are moving higher after already outperforming yesterday ahead of today’s BoE announcement. Expectations are for a steady policy decision, leaving the minutes and the inflation report in focus. In the Eurozone, Draghi managed to bring some calm into spreads, as he signaled that the forward guidance may be changed in June, but that real tapering is still a way off and won’t start before next year. The calendar today also has U.K. production data as well as inflation numbers out of Switzerland and Sweden, the ECB’s latest economic bulletin and the EU Commission’s updated set of forecasts.
ECB Outlook: Risk to price stability is “by and large gone” as President Draghi stated.He added that the forward guidance was meant to address tail risk and that some tail risks are less and less probable. The clearest sign yet from the ECB President that the easing bias will be scrapped in June and Bund futures are coming off intraday highs on the comments. With the risk of the French election out of the way the ECB is firmly on course to tweak the forward guidance in June, with Draghi following up Mersch’s comments from Monday, which show the central bank moving towards a more balanced view on growth and inflation and laying the ground for dropping the easing bias, that is still in place and adopting a neutral stance. The QE schedule for this year, which has already been announced, will remain in place and real tapering won’t start before 2018 and will be announced in September at the earliest. The key issue then for June is whether the statement tweaks the guidance in a way that would allow to lift the deposit rate out of negative territory even before asset purchases have been phased out. Given recent comments that seems increasingly likely, although it may not yet be announced in June, as Draghi and Co will be eager to move very gradual on policy normalization amid concerns that it could put undue pressure on peripherals.
RBNZ Rate Statement: RBNZ held rates steady at 1.75%, as expected. The statement by Governor Wheeler was similar to March, which was similar to February. Measured optimism remains in place, but with a recognition of ongoing uncertainties. Notably, Wheeler said developments since the February Monetary Policy Statement on balance are considered to be neutral for the stance of monetary policy. And a dovish bias was retained, as the Governor concluded that “Numerous uncertainties remain, and policy may need to adjust accordingly.” In March he said “Numerous uncertainties remain, particularly in respect to the international outlook, and policy will need to adjust accordingly.” But with “numerous uncertainties” remaining, is possible that an easing bias will remain in place at the RBNZ. But absent any downside surprises, the Bank should hold steady through year end.
Main Macro Events Today
BOE Rate Decision & Monetary Policy – No change to prevailing policy settings is widely anticipated. This will leave the focus on the minutes and the latest inflation report, which will likely feature the recent signs of accelerating economic activity after a relative soft patch in Q1, along with robust global growth.
UK Production Data – Industrial production data for March are also up today, which expected to improve to a -0.4% m/m figure after -0.7% in February. Trade data will be released at the same time.
US PPI & Unemployment Claims – PPI for April will highlight inflation developments from the producer side, and it is forecasted with gains of 0.1% and 0.2% for the headline and core, following a 0.1% overall decline in March and an unchanged reading on the ex-food and energy component. Unemployment Claims expected at 245K from 238K last week.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
MACRO EVENTS & NEWS OF 12th May 2017.
FX News Today
European Outlook: Asian markets were mixed overnight. Shares in Japan declined from a 17-month high amid a wealth of earnings reports today. Electronics and auto makers were under pressure as the Yen held gains and markets are taking stock after the recent rally. The Nikkei is down -0.54%, the Hang Seng managed a marginal 0.9% gain as stocks mainland markets moved higher, and the CSI 300 gained 0.63%, while the ASX was down -0.71%. U.S. futures are also heading south, while the FTSE 100 future is little changed. Yesterday’s BoE report may have hinted that markets are underestimating the BoE’s willingness to tighten policy, but with investors focusing on warnings of challenges for households and not buying into the assumption of a smooth Brexit Sterling declined and yields slipped while the FTSE 100 managed to outperform Eurozone markets. Today’s calendar has German GDP and inflation data at the start of the session as well as EMU production data.
U.S. reports: revealed a hot round of April PPI gains after yesterday’s firm trade price data and a surprisingly low 236k initial claims figure at the start of May that further solidifies Fed tightening expectations for June. For PPI, the expected big 0.5% goods price rise accompanied a solid 0.4% service price increase to leave a pop in the y/y rise to 2.5%, though gasoline price declines in early May should allow a 0.2% headline drop this month that leaves a drop-back in the y/y climb to a still-firm 2.1%. Claims tightness signals upside risk for our 195k May payroll estimate, alongside upside risk from firm consumer, producer, and small business confidence, a solid 237k average monthly ADP rise thus far in 2017, and a likely vehicle sales and assembly bounce in Q2 that accompanies a GDP growth bounce to 3.2%, after weak Q1 performances for both.
The BoE did the expected and kept policy unchanged, leaving the repo rate at 0.25% and QE totals unaltered (GBP 435 bln for government bond purchases, GBP 10 bln for corporate bonds). As last time, one member voted for an immediate hike in Bank Rate, and the updated Inflation Report noted that for some it would take relatively little further upside news on the prospects for activity or inflation to vote for a hike. Its 2017 growth forecast was trimmed to 1.9% from 2.0%, though the central bank’s projections for 2018 and 2019 were both upwardly nudged by 0.1 of a percentage point. At the same time the bank noted that the centrals scenarios of the May inflation report suggest that monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the very gently rising path implied by the market yield curve. However, the underlying assumption is a smooth Brexit transition to the new trading arrangements with the EU and that is a big if markets obviously disagree with. Markets though focused on the downside risks and didn’t buy into the assumption of a smooth Brexit transition so Sterling dropped and Gilt futures recovered losses on the back of the report.
Germany: Q1 GDP growth accelerated to 0.6% q/q in the first quarter of the year, from 0.4% q/q in Q4 last year and in line with expectations. The stats office reported that both domestic and external demand underpinned the quarterly growth rate and highlighted in particular that investment growth strengthened. Consumption growth was modest meanwhile and net exports improved. The annual rate rose 2.9% y/y. German Apr HICP confirmed at 2.0% y/y. The acceleration from just 1.5% y/y in March, was largely explained by the Easter effect, which lifted holiday related prices in April this year, rather than March as in 2016. All in all, pretty much as expected and confirming that the German recovery remains on track.
Main Macro Events Today
US CPI – April CPI is projected to rebound 0.2% for both the headline and the core, following respective declines of 0.3% and 0.1% in March. Weakness in energy prices was a major reason for the March declines and that should turn around for the April data.
US Retail Sales – Retail sales are seen bouncing 0.5% after dropping 0.3% in March, while the ex-auto figure should rise 0.4% after the 0.2% gain previously.
Fedspeak – FOMC Member Evans goes to Dublin to speak on economic conditions and monetary policy, while Harker speaks at Drexel University.
Always trade with strict risk management. Your capital is the single most important aspect of your trading business.
Please note that times displayed based on local time zone and are from time of writing this report.
Click HERE to access the full HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!
Click HERE to READ more Market news.
Andria Pichidi
Market Analyst
HotForex
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.