Press review - page 100

[Sergey Golubev]

GBPUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for the British Pound: Bullish

• British Pound Will Soon Find Yield, Rate Outlook Guidance
• GBP/USD Quiet as a Mouse; Prepping for Next Move

[Sergey Golubev]

USDJPY Fundamentals (based on dailyfx article)

Fundamental Forecast for Japanese Yen: Bullish

• Yen crosses correlation to S&P 500 collapse – which is the better bellwether for sentiment
• Last week’s data allows for the BoJ to maintain a wait-and-see, but time is running out

[Sergey Golubev]

Forex Weekly Fundamentals March 3-7 (based on forexcrunch article)

The US dollar was generally on the back foot, with the euro emerging as the big winner. The all important ECB rate decision is one of four rate decisions and the Non-Farm Payrolls with their build up also stand out in a very busy week. These are the highlights of this week. Here is an outlook on the major events at hand.

1. Mario Draghi speaks: Monday, 14:00. ECB President Mario Draghi is scheduled to speak at the European Parliament in Brussels. Draghi may talk about the ongoing growth trend in the Eurozone but may also give clues on the possibility of further rate cuts in the ECB’s next monetary policy meeting in light of better, but still slow inflation. Market volatility is expected. It will be interesting to hear how he sees the surprising rise in inflation. Here is one possible explanation.
2. US ISM Manufacturing PMI: Monday, 15:00. U.S. manufacturing activity weakened in January to 51.3 compared to 56.5 in December, amid low inventories. Economists expected a higher reading of 56.2 points. Many blamed weather conditions for the fall in January while some are even optimistic regarding future outlook in 2014. A rise to 52.3 is expected this time.
3. Australian rate decision: Tuesday, 0:30. The official rate was maintained at 2.5% after the meeting of the Reserve Bank of Australia board on February, as the RBA shifted to a neutral bias and boosted the Aussie. RBA Governor Glenn Stevens remarked that growth remained below RBA’s projections but is expected to rise this year. The RBA’s decision was widely anticipated by markets in accordance to the current economic conditions. No change in rates od forecast, but the Bank might talk about rising unemployment.
4. Australian GDP: Wednesday, 0:30. Australia’s economy expanded less than expected in the third quarter, growing 0.6% compared to 0.7% in the second quarter. The reading was below market forecast of a 0.7% rise. On a yearly base GDP increased 2.6%. Economic growth in Australia remains at low levels and is highly reliant on mining investment. Furthermore, Reserve Bank of Australia Gov. Glenn Stevens reiterated that the Australian dollar was still “uncomfortably high,” making the nation’s exports less competitive in global markets. An expansion rate of 0.7% is predicted now.
5. US ADP Non-Farm Payrolls: Wednesday, 13:15. US Private sector job market rose by 175,000 jobs in January according to the ADP National Employment Report. The main contribution to job growth came from the construction industry which added 25,000 jobs. Manufacturing sector narrowed in January with a 12,000 decline following a revised gain of 16,000 in the previous month. A smaller job gain of 159,000 is anticipated now.
6. Canadian rate decision: Wednesday, 15:00. The bank of Canada maintained rates at 1.0% and the BOC statement hurt the loonie. Bank of Canada governor Stephen Poloz reiterated that the bank’s key rate will not be changed. A change may be possible only if new information influences this balance of risks. However despite worries about slow inflation, Mr. Poloz remarked that the depreciation of the Canadian dollar may help exporters. The bank expects inflation to return to the 2% target within two years, but the current lo leveled inflation is a downside rise as well as the ongoing elevated household imbalances. Rates are expected to remain unchanged.
7. US ISM Non-Manufacturing PMI: Wednesday, 15:00. US service sector picked up in January, advancing to 54.0 from 53.0 in December, amid better business conditions and jobs gain. However the PMI remained below the12-month average of 54.6. New orders edged up 0.5 point to 50.9 and most responders reported improvement in business conditions. A small decline to 53.8 is expected this time.
8. UK rate decision: Thursday, 12:00. No change is expected from the BOE at this meeting. After presenting the second iteration of forward guidance in February and practically bringing forward rate hike expectations to Q2 2015, the upcoming rate decision could unfortunately turn into a non-event. The meeting minutes will probably have a bigger effect, as they will reflect the members’ thoughts about the recent reports about higher unemployment and lower inflation.
9. Eurozone rate decision: Thursday, 12:45, press conference at 13:30. There is a now a low chance that the ECB will lower the lending rate to 0.10-0.15% and set a negative deposit rate of 0.10%. While there is a danger that low inflation might move from the short term to the medium term, and that the ECB could act according to its mandate, as it did in November, the small rise in core inflation gives breathing space to Mario Draghi and company. The high exchange rate of the euro in recent months weighs on exports and lowers prices. With the high exchange rate of the euro, the growing pressure from the IMF and others and the exhaustion of the talk about of negative rates without action, the ECB could have better chances to act.. A negative rate would send the euro tumbling down, while no action would send the euro a bit higher. However, Draghi is more lightly to try to talk the currency down or allow the non-sterilization of bonds in the SMP program before going into the uncharted territory of negative rates.
10. US Unemployment Claims: Thursday, 13:30. The number of Americans filing unemployment applications increased unexpectedly by 14,000 last week to 348,000, Cold weather and winter storms slowed economic activity in the two first months of 2014 increasing the amount of unemployment applications. However labor market is expected to climb now that the weather conditions have improved. The number of clain is expected to decline to 336,000.
11. Canadian employment data: Friday, 13:30. The Canadian economy recovered 29,400 jobs in January after contracting 44,000 in December, pushing the unemployment rate down to 7.0% from 7.2%. Full-time positions edged up by an estimated 50,500, the largest rise since May. However, 28,300 of the new jobs were in self-employment. The rise shows that the Canadian job market is not entering a downturn trend. The job addition was well above market estimate of 19,700. A job gain of 16,900 is expected and unemployment rate is predicted to remain at 7%.
12. US Non-Farm Payrolls and Unemployment rate: Friday, 13:30. US non-farm payrolls gained 113,000 jobs in January far from the 180,000 increase projected by analysts but enough to lower the unemployment rate to 6.6% from 6.7% in December. Labor force participation rate, rose, to 63% from 62.8% in December indicating a positive change. Economists anticipate moderate job growth will continue, enabling the Fed to carry on with their tapering plan. Non-farm payrolls is expected to reach 151,000 while, unemployment rate is expected to remain 6.6%.
13. US Trade balance: Friday, 13:30. The U.S. trade deficit widened more than anticipated in December increasing 12 % to $38.7 billion compared to a revised $34.6 billion in November. Exports fell .8 % to $191.3 billion despite a sharp rise in petroleum exports. For all of 2013, the trade deficit reached $471.5 billion, the smallest since 2009. The improvement in US trade deficit also contributed to the fourth quarter GDP of 3.2% annual growth pace. However the slowdown in China raises doubts regarding a sustainable growth in exports in the foreseeable future. U.S. trade deficit is expected to widen further to 39.1 billion.

[Sergey Golubev]

EURUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Euro: Bullish

• The Euro’s bullish expectations have been boosted after faster than expected February Euro-Zone inflation data.
• Higher inflation diminishes the chance of new non-standard easing measures by the ECB.

[Sergey Golubev]

Forex Fundamentals - Weekly outlook: March 3 - 7

The U.S. dollar ended the week lower against most of the other main currencies on Friday after data showed that U.S. fourth quarter growth was revised lower, adding to worries that the Federal Reserve may slow the pace of reductions to its stimulus program.

Monday, March 3

• Japan is to release data on capital spending. Australia is to publish a report on company operating profits. China is to produce data on service sector activity, as well as a revised reading on the HSBC manufacturing index.
• The U.K. is to release data on manufacturing activity and net lending to individuals, while Switzerland is to publish its SVME index.
• In the euro zone, Spain and Italy are to release data on manufacturing activity. Meanwhile, ECB President Mario Draghi is to speak in the European Parliament in Brussels.
• Canada is to produce data on raw material price inflation.
• The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.

Tuesday, March 4

• The RBA is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision.
• Australia is also to publish data on building approvals and the current account. Japan is to produce a report on average cash earnings.
• In the euro zone, Spain is to release data on the change in the number of people unemployed.
• The U.K. is to release data on construction sector activity.

Wednesday, March 5

• Australia is to publish data on fourth quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
• The euro zone is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Spain and Italy are to release data on service sector activity.
• The U.K. is to produce data on service sector activity, a leading indicator of economic health.
• The BoC is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision.
• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.

Thursday, March 6

• Australia is to publish data on retail sales and the trade balance, the difference in value between imports and exports.
• Germany is to publish data on factory orders.
• The BoE is to announce its benchmark interest rate.
• Later in the day, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
• The U.S. is to publish the weekly report on initial jobless claims and data on factory orders. Canada is to publish a report on building permits and the Ivey PMI.

Friday, March 7

• RBA Governor Glenn Stevens is to testify before the House of Representatives Economic Committee, in Sydney; his comments will be closely watched.
• The Swiss National Bank is to release data on foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets. Switzerland is also to release data on consumer inflation.
• The U.K. is to release data on consumer inflation expectations.
• In the euro zone, Germany is to publish data on industrial production.
• Canada is to publish data on the change in the number of people employed and the unemployment rate, as well as a report on the trade balance.
• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

[Sergey Golubev]

USD/JPY Fundamentals - weekly outlook: March 3 - 7

The dollar fell to two-week lows against the yen on Friday after data showed that U.S. fourth quarter growth was revised down, while concerns over tensions in Ukraine and a weaker Chinese yuan also supported safe haven demand for the yen.

Monday, March 3

• Japan is to release data on capital spending.
• The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.

Tuesday, March 4

• Japan is to produce a report on average cash earnings.

Wednesday, March 5

• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.

Thursday, March 6

• The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.

Friday, March 7

• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

[Sergey Golubev]

USD/CHF Fundamentals - weekly outlook: March 3 - 7

The dollar fell to more than one-year lows against the Swiss franc on Friday after data showed that U.S. fourth quarter growth was revised lower, while rising tensions in Ukraine and a weaker Chinese yuan also underpinned safe haven demand.

Monday, March 3

• Switzerland is to publish its SVME PMI.
• The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.

Wednesday, March 5

• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.

Thursday, March 6

• The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.

Friday, March 7

• The Swiss National Bank is to release data on foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets. Switzerland is also to release data on consumer inflation.
• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

[Sergey Golubev]

USD/CAD Fundamentals - weekly outlook: March 3 - 7

The Canadian dollar ended Friday’s session higher against the U.S. dollar, after data showed that the Canadian economy grew more than forecast in the final three months of 2013, while U.S. growth was revised lower.

Monday, March 3

• Canada is to produce data on raw material price inflation.
• The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.

Wednesday, March 5

• The BoC is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision.
• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.

Thursday, March 6

• The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.
• Canada is to publish a report on building permits and the Ivey PMI.

Friday, March 7

• Canada is to publish data on the change in the number of people employed and the unemployment rate, as well as a report on the trade balance.
• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

[Sergey Golubev]

AUD/USD Fundamentals - weekly outlook: March 3 - 7

The Australian dollar ended Friday’s session close to a four-week low against its U.S. counterpart, as lingering concerns over the health of China’s economy and a weakening Chinese Yuan dampened sentiment.

Monday, March 3

• Australia is to publish a report on company operating profits.
• China is to produce data on service sector activity, as well as a revised reading on the HSBC manufacturing index.
• The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.

Tuesday, March 4

• The RBA is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision.
• Australia is also to publish data on building approvals and the current account. Japan is to produce a report on average cash earnings.

Wednesday, March 5

• Australia is to publish data on fourth quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.

Thursday, March 6

• Australia is to publish data on retail sales and the trade balance, the difference in value between imports and exports.
• The U.S. is to publish the weekly report on initial jobless claims and data on factory orders. Canada is to publish a report on building permits and the Ivey PMI.

Friday, March 7

• RBA Governor Glenn Stevens is to testify before the House of Representatives Economic Committee, in Sydney; his comments will be closely watched.
• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

[Sergey Golubev]

NZD/USD Fundamentals- weekly outlook: March 3 - 7

The New Zealand rose to a six-week high against its U.S. counterpart on Friday, after data showed that U.S. fourth quarter growth was revised lower, adding to worries that the Federal Reserve may slow the pace of reductions to its stimulus program.

Monday, March 3

• The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.

Wednesday, March 5

• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.

Thursday, March 6

• The U.S. is to publish the weekly report on initial jobless claims and data on factory orders.

Friday, March 7

• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.