AUDUSD Intra-Day Fundamentals - Chinese Retail Sales and 49 pips price movement

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Press review

newdigital, 2015.01.16 17:06

Forex Weekly Outlook January 19-23 (based on forexcrunch article)

German ZEW Economic Sentiment, Inflation data in New Zealand, Rate decision in Japan, the Eurozone and Canada, Employment data from the UK and the US and housing data from the US. These are the main market movers on Forex calendar. Join us as we explore the highlights of this week.

Last week, US data failed to raise optimism with a surprise 0.9% drop in retail sales registering their largest decline in 11 months and a 1.0% decline in core sales. In the manufacturing sector the Philly Fed index fell to 6.3 points, while expected to reach 20.3 points. Jobless claims increased unexpectedly to 316,000 from 297,000 crossing to 300,000 line. However, the Empire State index surged to 10 points from 5.3 in the prior month. Will we see better figures this week?

1. Eurozone German ZEW Economic Sentiment: Tuesday, 10:00. German investor sentiment edged up in December to 34.9 from 11.5 in November. This was the second consecutive rise, indicating increased optimism for a pickup in Europe’s largest economy. Economists expected a lower figure of 19.8. German economy expanded by a mere 0.1% in the third quarter, bit a boost in consumer spending is expected to improve growth in the final quarter of 2014. German analysts’ sentiment is expected to improve to 40.1.
2. NZ inflation data: Tuesday, 21:45. New Zealand consumer prices increased 0.3% from the second quarter, falling short of the 0.5% rise expected by analysts. On a yearly base, consumer price index rose 1% in the third quarter after a 1.6% rise in the previous quarter indicating slower inflation. The absence of inflationary pressures enabled Governor Graeme Wheeler to keep borrowing costs unchanged for longer. Consumer prices are expected to remain unchanged this time.
3. Japan rate decision: Wednesday. The Bank of Japan voted to keep its monetary policy unchanged at its December policy meeting, increasing its monetary base at an annual pace of JPY 80 trillion. The decision was in line with market forecast. The BOJ noted the improvement in exports and a recovery in industrial output as well as, rising inflation expectations. Rates are expected to remain unchanged this time.
4. UK employment data: Wednesday, 9:30. UK Jobless Claims dropped in November by 26,900 beating expectations for a 19,800 decline. Furthermore, on a quarterly basis, average earnings excluding bonuses edged up 1.6%. UK unemployment in the third quarter fell by 63,000 to 1.96 million indicating an improvement in British labor market. UK unemployment claims are expected to drop 24,200 in December.
5. US Building Permits: Wednesday, 13:30. The number of building permits issued in November fell 5.2% to a seasonally adjusted annual rate of 1.04 million, indicating weakness in construction of single-family homes. However, Analysts forecast the housing sector will maintain its momentum in 2015 as job growth continues and mortgage rates remain accommodative. The number of building permits is expected to increase to1.06 million.
6. Canadian rate decision: Wednesday, 15:00. The Bank of Canada kept its rate at 1% in December, amid stronger economic recovery in exports and business investment. BoC’s statement was more optimistic than before amid widening expansion on top of strong consumer spending, which may lead to self-sustaining growth. Poloz said the said the output gap is smaller and that the economy has sufficient room to grow before it reached full capacity. Rates are expected to remain at 1%.
7. Eurozone rate decision: Thursday, 12:45. The European Central Bank kept interest rates unchanged in December leaving deposit facility at negative 0.20%. Draghi said the central bank requires more time to assess the impact of dropping oil prices on inflation, growth and wages, before deciding the course of action. Falling energy costs will worsen deflation below the ECB’s target of just under 2%, but at the same time, may help the region’s economy by saving companies and consumers billions of euros. The ECB continued to examine a range of options for quantitative easing in case the measures it has already taken fail to boost prices. The ECB is expected to maintain rates this month.
8. US Unemployment Claims: Thursday, 13:30. The number of initial claims for unemployment benefits jumped last week by 19,000 to 316,000, from a revised 297,000 in the week before. Economists expected claims to rise moderately to 299,000. The sudden increase is typical for the first full week of the year when holiday workers are fired. The volatility makes it difficult for the government to determine whether the number of applications has truly picked up. The four-week moving average increased to 298,000 last week from 291,250. The number of jobless claims is expected to reach 301,000 this week.

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Press review

newdigital, 2015.01.18 12:55

Forex - Weekly outlook: January 19 - 23 (based on investing.com article)

The euro and the dollar pushed higher against the Swiss franc on Friday, a day after an unexpected move by the Swiss National Bank to abandon its currency peg against the euro, while the dollar rose to fresh 12-year highs against the euro ahead of expected monetary easing by the European Central Bank as early as next week.

The euro posted its largest ever single-day decline against the Swiss franc on Thursday after the SNB surprised markets by scrapping the 1.20 per euro exchange rate floor it imposed in September 2011.

The central bank also cut interest rates deeper into negative territory, a move intended to dissuade investors from buying the franc.

SNB Chairman Thomas Jordan said Thursday the exchange rate cap had “protected the Swiss economy from serious harm” but added that maintaining the policy was not “sustainable or sensible in the long term.”

EUR/CHF was trading at 0.9930 late Friday, up 1.75% for the day after falling to all-time lows of 0.8696 on Thursday, and ended the week with losses of more than 17%.

USD/CHF was up 2.25% to 0.8586 late Friday, having recovered from the lows of 0.7360 struck in the previous session. The franc still ended the week with gains of 15% against the dollar.

The shock move indicated that the SNB sees a high likelihood that the ECB will implement quantitative easing measures at its upcoming meeting on Thursday.

An interim ruling last Wednesday, which is likely to be accepted by the European Court of Justice, said the ECB was free to pursue a bond purchasing program without legal challenge.

EUR/USD was down 0.55% at 1.1567 in late trade on Friday, after falling to lows of 1.1461 earlier in the day, the weakest since November 2003.

In other trading, USD/JPY added 1.15% to hit 117.46 late Friday, recovering from overnight lows of 115.84.

The diverging monetary policy stance between the Federal Reserve, which is poised to raise interest rates and central banks in Europe and Japan has seen the dollar strengthen broadly in recent months.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.57% to 93.05 and notched up its fifth successive week of gains, supported by weakness in the euro.

In the week ahead, investors will be focusing on Thursday’s outcome of the ECB’s policy meeting and the banks post policy meeting press conference will be closely watched.

Meanwhile, China is to release data on economic growth while the Bank of Japan and the Bank of Canada are also to hold monetary policy meetings.

Monday, January 19

• Switzerland is to release data on producer price inflation.
• In the euro zone, Germany’s Bundesbank is to publish its monthly report.
• U.S. markets will remain closed for the Martin Luther King Day holiday.

Tuesday, January 20

• China is to release data on gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. The country is also to report on fixed asset investment, industrial production and retail sales.
• The ZEW Institute is to release its closely watched report on German economic sentiment, a leading indicator of economic health.
• Canada is to publish data on manufacturing sales.
• Later in the day, New Zealand is to release data on consumer price inflation.

Wednesday, January 21

• Australia is to release private sector data on consumer sentiment.
• The Bank of Japan is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The bank will hold a press conference following the announcement.
• The U.K. is to release its monthly employment report, as well as data on average earnings. Also Wednesday, the Bank of England is to publish its monthly meeting minutes.
• The U.S. is to release data on building permits and housing starts.
• The Bank of Canada is to announce its benchmark interest rate and hold a press conference to discuss the monetary policy decision. Meanwhile, Canada is to report on wholesale sales.

Thursday, January 22

• Spain is to release data on the unemployment rate.
• The ECB is to announce its benchmark interest rate. The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi.
• The U.S. is to release data on initial jobless claims.

Friday, January 23

• China is to publish the preliminary reading of its HSBC manufacturing index.
• The euro zone is to publish preliminary data on private sector activity, while Germany and France are to also to publish data on private sector growth.
• The U.K. is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
• Later in the day, Canada is to produce data on retail sales and consumer inflation.
• The U.S. is to round up the week with preliminary data on manufacturing activity and a private sector report on existing home sales.

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Press review

newdigital, 2015.01.18 15:54

AUD/USD weekly outlook: January 19 - 23 (based on investing.com article)

The Australian dollar edged higher against its U.S. counterpart on Friday, as investors digested a mixed bag of U.S. data.

AUD/USD rose to 0.8294 on Thursday, the pair's highest since December 12, before subsequently consolidating at 0.8228 by close of trade on Friday, up 0.18% for the day and 0.31% higher for the week.

The pair is likely to find support at 0.8067, the low from January 14, and resistance at 0.8294, the high from January 15.

In a preliminary report, the University of Michigan said Friday that its consumer sentiment index rose to 98.2 this month, the highest level since January 2004, from 93.6 in December, compared to expectations for a rise to 94.1.

However, a separate report showed that U.S. consumer price inflation fell 0.4% last month, in line with expectations and after a 0.3% decline in November.

Core CPI, which excludes food and energy, was flat in December, compared to expectations for a 0.1% rise, after a 0.1% uptick the previous month.

Muted inflation may prompt the Federal Reserve to delay any increases in interest rates to late-2015 from mid-2015.

Also Friday, data showed that U.S. industrial production slipped 0.1% in December, confounding expectations for a 0.1% rise, after an increase of 1.3% in November.

The Aussie was also boosted by the release of strong domestic employment data on Thursday.

The Australian Bureau of Statistics said that the number of employed people increased by 37,400 last month, beating expectations for a 3,800 rise, while the unemployment rate ticked down to 6.1% from 6.2% in November. Analysts had expected the unemployment rate to sit at 6.3% last month.

Elsewhere, AUD/CHF was up 2.61% to 0.7072 late Friday, having recovered from the lows of 0.6072 struck in the previous session.

The franc still ended the week with gains of 15% against the Australian dollar after the Swiss National Bank said Thursday that it would discontinue its minimum exchange rate of 1.20 per euro, while lowering interest rates further into negative territory.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.57% to 93.05 and notched up its fifth successive week of gains, supported by weakness in the euro.

The euro remained under pressure amid mounting expectations that the European Central Bank will embark on full blown quantitative easing as soon as its next policy meeting on January 22.

In the week ahead, investors will be focusing on Thursday’s outcome of the ECB’s policy meeting and the subsequent press conference with central bank governor Mario Draghi.

Traders are also looking ahead to a raft of Chinese economic data later this week, including reports on fourth quarter gross domestic product, as well as data on industrial production and retail sales.

The Asian nation is Australia's largest trade partner.

Monday, January 19

• U.S. markets will remain closed for the Martin Luther King Day holiday.
  

Tuesday, January 20

• China is to release data on gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth. The country is also to report on fixed asset investment, industrial production and retail sales.
  

Wednesday, January 21

• Australia is to release private sector data on consumer sentiment.
• The U.S. is to release data on building permits and housing starts.
  

Thursday, January 22

• The U.S. is to release data on initial jobless claims.
  

Friday, January 23

• China is to publish the preliminary reading of its HSBC manufacturing index.
• The U.S. is to round up the week with preliminary data on manufacturing activity and a private sector report on existing home sales.