Press review - page 552

[Sergey Golubev]

Weekly EUR/USD Outlook: 2017, September 03 - September 10 (based on the article)

EUR/USD made a big breakout and topped 1.20 but fell quite quickly as well. Will it continue higher? The ECB meeting is undoubtedly the key event of the week, and there are other events as well. Here is an outlook for the highlights of this week.

1. Spanish Unemployment Change: Monday, 7:00. Another drop is likely now.
2. PPI: Monday, 9:00. In June, prices dropped by 0.1% m/m, as expected.
3. Services PMIs: Tuesday: 7:15 for Spain, 7:45 for Italy, final French data at 7:50, final German figures at 7:55 and the final euro-zone number at 8:00.
4. Retail Sales: Tuesday, 9:00. A rise of 0.5% was seen in June.
5. GDP (revised): Tuesday, 9:00. The updated version for Q2 GDP will likely confirm it.
6. German Factory Orders: Wednesday, 6:00.
7. Retail PMI: Wednesday, 8:10. 
8. German industrial output: Thursday, 6:00. Contrary to factory orders, this measure of industrial production disappointed with a drop of 1.1% in June.
9. French Trade Balance: Thursday, 6:45. France suffers from a chronic trade deficit. In June, this deficit widened to 4.7 billion. A similar figure is likely now.
10. ECB decision: Thursday, 11:45, press conference at 12:30. Will the ECB announce QE tapering? And what will the scale be?
11. German Trade Balance: Friday, 6:00. The surplus reached 21.2 billion.
12. French industrial output: Friday, 6:45.

[Sergey Golubev]

Weekly Fundamental Forecast for Dollar Index (based on the article)

Dollar Index - "The US Dollar continues to impress with its resilience last week. In the past three weeks, the greenback managed to navigate past political turmoil as well as Fed Chair Janet Yellen’s inconclusive performance at the Jackson Hole symposium, emerging relatively unscathed. It has now managed to shrug off August’s broadly disappointing employment report as well. The numbers showed that last month’s payrolls growth fell short of expectations and July’s increase was revised downward. Meanwhile, the unemployment rate unexpectedly ticked up and wage inflation held steady, falling short of consensus forecasts calling for an increase. On balance, this might’ve been expected to sink the benchmark currency, yet an initial plunge was promptly erased to put it flat by week-end."

[Sergey Golubev]

Weekly Fundamental Forecast for GBP/USD (based on the article)

GBP/USD - "The British Pound had a much better week at the end of August. It rallied against the US Dollar both before and after Friday’s weaker-than-expected payrolls data, and it firmed against the Euro both before and after signs emerged that the European Central Bank may not announce a decision on reducing its monetary stimulus program for the Euro-Zone economy until October at the earliest because of the Euro’s strength. The week ahead is another relatively quiet one for economic data but it will be interesting to see whether the construction and service-sector PMIs on Monday and Tuesday also come in better than expected ahead of Friday’s batch of official data on industrial production, construction output and international trade."

[Sergey Golubev]

Weekly Fundamental Forecast for AUD/USD (based on the article)

AUD/USD - "Investors can also look forward to news of the Australian current account position, job advertisements and service-sector performance, all of which have the potential to move the market. But the overall backdrop for the currency is one of at least relative investor support – even at record lows Aussie yields are attractive – countered by rising RBA watchfulness of the currency level. None of this is likely to change this week so, while AUD/USD may be in for a more volatile ride, the basic backdrop seems set to endure. That’s why I am making a neutral call yet again."

[Sergey Golubev]

Weekly Fundamental Forecast for USD/CNY (based on the article)

USD/CNY - "The Chinese regulator has been guiding the Yuan higher: The PBOC strengthened the Yuan reference rate for five consecutive days this week; on Friday, the Yuan fix was set to be 6.5909, the strongest level since June 2016. A key thing to watch next is how the PBOC will use the “counter-cyclical factor” to guide the Yuan when it is on an upward trend. On May 26, the regulator introduced this factor and added it into the reference rate formula, in the effort to curb one-way bets on the Yuan."

[Sergey Golubev]

Weekly Fundamental Forecast for Dax Index (based on the article)

Dax Index - "This coming week, the big event will be Thursday’s ECB meeting and how Mario Draghi and company plan to handle the current monetary policy and euro strength. Via Bloomberg on Friday, the ECB said it may not be ready to make a final decision until a couple of weeks before the current program expires. This put pressure on the euro after it initially rallied on weak U.S. jobs data. A euro decline could certainly help bolster European indices higher, and if general risk appetite picks up momentum there may be a double tailwind."

[Sergey Golubev]

Weekly Fundamental Forecast for GOLD (based on the article)

XAU/USD - "The reaction to the lackluster U.S. Non-Farm Payrolls (NFP) report suggests gold will continue to exhibit a bullish behavior ahead of the Federal Open Market Committee (FOMC) interest rate decision on September 20 as mixed data prints coming out of the economy sap bets for another rate-hike in 2017. Even though ‘the Committee expects to begin implementing its balance sheet normalization program relatively soon,’ the fresh forecasts from Chair Janet Yellen and Co. may ultimately heighten the appeal of gold if central bank officials attempt to buy more time and project a more shallow path for the Fed Funds rate."

[Sergey Golubev]

Does Bitcoin prices' recent pullback represent a warning or an opportunity? (based on the article)

Daily price is breaking 4,766 resistance level to above for the bullish breakout to be continuing with 5,000 psy resistance level as a nearest bullish target for example.

• "Bitcoin prices retreated today, approaching $4,500 after surpassing $5,000 for the first time ever. The price of Bitcoin fell to as little as $4,529.37 today, close to 10% below the all-time high of $5,013.91."
• "The technical traders were waiting to take profits at $5,000," said Brad Chun, chief investment officer of Shuttle Fund Advisor, a hedge fund that focuses on digital assets. Some of these traders even went so far as to open up short positions, he added. 

[Sergey Golubev]

Weekly Fundamental Forecast for Brent Crude Oil (based on the article)

Brent Crude Oil - "In short, Hurricane Harvey has transformed the global market for refined oil products. In addition to refining operations in the energy capital of the US (Houston, TX) remaining shut for an indefinite amount of time, there is an active port in Houston that takes Oil to the world (US exports have been a global dominating factor lately) that is inaccessible, and demand is uncertain. Some could argue the Broken Window Fallacy is good for demand. The theory argues demand is created from destruction, and thus Oil demand would benefit from the needed rebuilding. However, history tends to show that any gains are unevenly dispersed, and the economy as a whole is not better off with stronger demand than before."

[Sergey Golubev]

GBP/USD Intra-Day Fundamentals: United Kingdom Markit/CIPS Construction Purchasing Managers Index (PMI) and range price movement 

2017-09-04 09:30 GMT | [GBP - Construction PMI]

• past data is 51.9
• forecast data is 52.1
• actual data is 51.1 according to the latest press release

if actual > forecast (or previous one) = good for currency (for GBP in our case)

[GBP - Construction PMI] = Level of a diffusion index based on surveyed purchasing managers in the construction industry. 

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From official report :

• "August survey data indicated that the UK construction sector continued to experience a slowdown this summer. Reduced levels of commercial work were a key source of weakness, which offset robust growth in residential building. There were also signs of a sustained soft patch ahead, with new business volumes falling for the second month running. Survey respondents linked subdued demand to reduced business investment and heightened economic uncertainty. As a result, construction firms exerted greater caution in terms of their staff hiring, with employment numbers rising at the slowest pace since July 2016."
• "At 51.1 in August, the seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI® ) remained above the 50.0 no-change threshold for the twelfth month running. However, the latest reading was down from 51.9 in July and pointed to the weakest overall UK construction performance since August 2016. A key reason for the slowdown was a lack of new orders to replace completed projects, according the survey respondents."

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GBP/USD M5: range price movement by U.K. Construction PMI news event