Hello, and good start of the week for all american traders and welcome to the weekly fundamental overview.
This last week was very interesting for international market because of the update of relevant information on the health of U.S.A. economy, such as non-farm payrolls, which were way below the expected, but still Unemployment rates and continous jobless claims met expectations, just that the expectations doesn't necessarily mean objectives.
The information presented last week was very important because it will affect for sure the "outlook for the economy" for the FOMC members, and Janet Yellen will take it into consideration to raise or not the U.S. interest rate, last week data wasn't enough to say that the overall U.S. economy is doing well, and if international volatility continues we might not see an interest hike 'til next year.
Also it is important to say the trust issues the Fed caused last monetary policy announcement, after strong signals of an interest hike past months inversionist are taking less seriously the words of the Fed, and some are even considering them as guilty of the international market volatility.
So far the ECB, the People's bank of China, RBNZ, and other minor banks around the world need that interest hike as soon as possible before they have to do what the Swiss have done, to make their interest rates negative in order to keep their economies growing; meanwhile other banks are fiercely opening new analysis and discussions session in order to know when the interest hike might come and therefore to increase theirs as soon as possible.
Also we gotta say that december rate hike has a fundamental barrier, which is the purchases from Mexico, while not one of the most important economies in the world is a very important partner of the U.S.A.
In Europe inflation indicates that ECB is just waiting to act, personally I'm pretty sure they will increase their QE program if a rate hike is not given in december, the european crisis, if not yet called that way, may finally get really critical if ECB just stands there and wait 3 more months.
Other important data is that the Reserve Bank of India keeps decreasing the interest rates, and even when not harmful to their very healthy economy, might hit them in their most critical area: the social impact.
In conclusion last week was very important for the Fed and upcoming meetings will most likely discuss about that data and it's impact in order to make a decision if it would be good for the economy to have an interest rate hike, also Europe needs attention, at this moment the most important is the economy so they can have back the social status they had 15 years ago, but lack of action will lead to social instability, the world is changing, specially in third world economies, where social impact seems to be gaining economic status over monetary policies and if government is not aware of that, economy could be hit in a very hard way.
Therefore the Fundamental analysis for next week is as follows:
USD - Bearish
EUR - Bearish
GBP - Neutral
CAD - Neutral/Bullish
CHF - Neutral
NZD - Bullish
AUD - Neutral / Bullish
JPY - Bullish
MXN - Bearish
