Press review - page 108

[Sergey Golubev]

Forex Weekly Outlook March 17-21

The yen is the winner of a turbulent trading week which saw new highs for the euro and the kiwi. The first rate decision by Janet Yellen is the main event. Among other highlights are the German Economic Sentiment, speeches by heads of central banks, UK employment data, as well as US employment and housing data. These are the main market movers on Forex calendar. Here is an outlook on the influential events for the coming week.

1. German ZEW Economic Sentiment: Tuesday, 10:00. German economic climate dropped more than expected in February, reaching 55.7 from 61.7 in the previous month, thanks to emerging market concerns. This release marked the second consecutive fall; economists expected a small decline to 61.3. Nevertheless, analysts expect Germany to continue its growth trend this year leading its Eurozone members to recovery. German economic climate is forecasted to decline further to 52.3.
2. US Building Permits: Tuesday, 12:30. Building permits plunged in January to 937,000, falling 5.4% from December. The release was considerably weaker than the 980,000 expected by analysts. The unusually cold weather and snow storms stopped growth in the housing sector. On an annual basis, starts fell 2.0% from January 2013, to 898,000, the lowest level since August 2011, while building permits, were up 2.4% from a year ago. A stronger reading of 970,000 is expected this time.
3. US inflation data: Tuesday, 12:30. U.S. consumer prices increased in January, thanks to a rise in demand for electricity and heating fuel, caused by the cold winter. Consumer Price Index climbed 0.1%, following a 0.3% in December. In the 12 months to January, consumer prices edged up 1.6% after increasing 1.5% in December. Meanwhile, core CPI, excluding volatile energy and food components, also rose 0.1% for a second consecutive month. In the 12 months to January, core CPI rose 1.6%, following a 1.7% increase in December. Both CPI and core CPI are expected to gain 0.1%.
4. UK employment data: Wednesday, 9:30. The British unemployment rate unexpectedly climbed in the fourth quarter, reaching 7.2% from 7.1% in the third quarter a fact that compelled the BOE to keep interest rates unchanged. Meantime, jobless claims fell 27,600 in January, beating economists forecast of 18,300. However the pace of decline will moderate in the coming months due to a certain decline in economic activity. For as long as unemployment remains above the 7% threshold, monetary policy will not be changed. Jobless claims are expected to decline by 23,300 while unemployment rate is expected to remain unchanged at 7.2%.
5. Fed decision: Wednesday, 18:00, press conference at 18:30. The taper train is on track and the Fed is very likely to reduce its bond buys by another $10 billion. After the Fed prepared markets for the tapering during a long period of time, only a major disaster could change the course. The recent OK NFP left little doubts. In addition, the composition of the FOMC is more hawkish, and Yellen would need to prove she is tough enough. It is her first decision and being a woman probably also plays a role. In the press conference, she is expected to show continuity, following in the footsteps of Bernanke, and in line with her recent lengthy testimonies in Washington. The move is largely priced in, and a strengthening of the dollar in the aftermath of the decision could be quite limited.
6. NZ GDP: Wednesday, 12:45. New Zealand economy expanded more than expected in the third quarter, rising 1.4% following a revised 0.3% increase in the preceding quarter. The main contributors were agriculture and the dairy sector. The strong growth and rising inflation prompted the RBNZ to raise rates in March to 2.75% making New Zealand the first major developed economy to tighten in the current cycle. New Zealand economy is expected to expand by 1.0% this time,1%
7. Haruhiko Kuroda speaks: Thursday, 7:15. BOE Governor Haruhiko Kuroda will speak in Tokyo. Kuroda said in a news conference in March that he rules out the need for further easing measures at this point, unless economic conditions worsen. Market volatility is expected. Analysis: Temporary Insanity and USDJPY
8. US Unemployment Claims: Thursday, 12:30. The number of new claims for unemployment benefits unexpectedly dropped 9,000 last week to a seasonally adjusted 315,000.This was the best reading since November. Economists expected a rise in claims to a level of 334,000. The four-week average fell 6,250 to 330,500, the lowest since early December. Improved weather conditions have contributed to the improvement in the job data. The number of people still receiving benefits after an initial week of aid fell 48,000 to 2.86 million in the week ended March 1. That was the lowest level since December. A small rise to 327,000 is forecasted.
9. US Existing Home Sales: Thursday, 14:00. U.S. existing home sales dropped more than expected in January, reaching an 18 month-low of 4.62 million unit’s annual rate following 4.87 million in the previous month. The cold weather and house shortage were behind this decline. Economists projected a higher figure of 4.73 million. A rise to 4.65 million is predicted now.
10. US Philly Fed Manufacturing Index: Thursday, 14:00. Factory activity in the U.S. mid-Atlantic region contracted in February reaching -6.3 after posting 9.4 in January, amid a fall in new orders. Analysts expected a high reading of 9.2. New orders plunged to -5.2 from 5.1 increase and the employment component contracted to 4.8 from 10.0. However, economists believe manufacturing will pick-up in the coming months. Factory activity is expected to increase to 4.2.

[Sergey Golubev]

EURUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Euro: Neutral

• The Euro melt-up was in full swing this week until ECB President Draghi spoke on Thursday.
  
• Forex seasonality over the past 20 years favors a stronger EURUSD in March

[Sergey Golubev]

AUDUSD Fundamentals (based on dailyfx article)

Fundamental Forecast for Australian Dollar: Neutral

• Australian Dollar May Face Selling Pressure on Pro-Taper FOMC Outcom
• Geopolitical Tensions Threaten to Unleash Sentiment-Driven Aussie Volatility

[Sergey Golubev]

Forex Fundamentals - Weekly outlook: March 17 - 21

The yen rose against the dollar and the euro on Friday as safe haven demand was bolstered by fears over an economic slowdown in China and tensions over the crisis in Ukraine, ahead of a referendum in Crimea.

Monday, March 17

• The euro zone is to release data on consumer price inflation, which accounts for the majority of overall inflation.
• Canada is to produce data on foreign investments.
• The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.

Tuesday, March 18

• The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
• 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 Tuesday, Bank of Canada Governor Steven Poloz is to speak, his comments will be closely watched.
• The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.
• Bank of England Governor Mark Carney is to speak at an event in London.

Wednesday, March 19

• Japan is to publish data on the trade balance, the difference in value between imports and exports. Meanwhile, Bank of Japan Governor Haruhiko Kuroda is to speak at an event in Tokyo.
• The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings and public sector borrowing. Meanwhile, the Bank of England is to publish the minutes of its most recent policy setting meeting.
• The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
• Canada is to release data on wholesale sales.
• The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.
• Later Wednesday, New Zealand is to publish data on fourth quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth.

Thursday, March 20

• Germany is to release data on producer price inflation.
• BoJ Governor Haruhiko Kuroda is to speak at an event in Tokyo.
• The Swiss National Bank is to announce its libor rate. The bank is also to publish its quarterly monetary policy assessment.
• Political leaders and finance ministers from the EU are to hold the first day of an economic summit in Brussels.
• The U.K. is to release private sector data on industrial order expectations. The U.K. government is to make its annual budget statement.
• The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.

Friday, March 21

• Markets in Japan are to remain closed for a national holiday.
• The euro zone is to release data on the current account.
• Meanwhile, political leaders and finance ministers from the European Union are to hold the second day of an economic summit in Brussels.
• The U.K. is to produce data on public sector net borrowing.
• Canada is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on consumer inflation.

[Sergey Golubev]

USD/JPY Fundamentals - weekly outlook: March 17 - 21

The yen ended the week at two-week highs against the dollar on Friday, as concerns over slowing growth in China and heightened tensions between the West and Russia over Ukraine underpinned safe haven demand.

Monday, March 17

• The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.

Tuesday, March 18

• The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.

Wednesday, March 19

• Japan is to publish data on the trade balance, the difference in value between imports and exports. Meanwhile, Bank of Japan Governor Haruhiko Kuroda is to speak at an event in Tokyo; his comments will be closely watched.
• The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.

Thursday, March 20

• BoJ Governor Haruhiko Kuroda is to speak at an event in Tokyo.
• The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.

Friday, March 21

• Markets in Japan are to remain closed for a national holiday.

[Sergey Golubev]

USD/CHF Fundamentals - weekly outlook: March 17 - 21

The dollar ended the week close to two-and-a-half year lows against the traditional safe haven Swiss franc as a combination of fears over the crisis in Ukraine and a slowdown in China’s economy sapped risk appetite.

Monday, March 17

• The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.

Tuesday, March 18

• The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.

Wednesday, March 19

• The ZEW Institute is to publish a report on economic expectations in Switzerland, a leading indicator of economic health.
• The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.

Thursday, March 20

• The SNB is to announce its libor rate. The bank is also to publish its quarterly monetary policy assessment.
• The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.

[Sergey Golubev]

USD/CAD Fundamentals - weekly outlook: March 17 - 21

The U.S. dollar moved higher against the Canadian dollar on Friday as investors shied away from risk sensitive currencies amid ongoing concerns over the crisis in Ukraine and slowing growth in China.

Monday, March 17

• Canada is to produce data on foreign investments.
• The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.

Tuesday, March 18

• Canada is to publish data on manufacturing sales. Later Tuesday, BoC Governor Steven Poloz is to speak, his comments will be closely watched.
• The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.

Wednesday, March 19

• Canada is to release data on wholesale sales.
• The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.

Thursday, March 20

• The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.

Friday, March 21

• Canada is to round up the week with official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as data on consumer inflation.

[Sergey Golubev]

NZD/USD Fundamentals - weekly outlook: March 17 - 21

The New Zealand ended the week close to an 11-month high against its U.S. counterpart on Friday, after the Reserve Bank of New Zealand raised interest rates and said it will end stimulus measures earlier than expected.

Monday, March 17

• The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.

Tuesday, March 18

• The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.

Wednesday, March 19

• The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.
• Later Wednesday, New Zealand is to publish data on fourth quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic growth.

Thursday, March 20

• The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.

[Sergey Golubev]

AUD/USD Fundamentals - weekly outlook: March 17 - 21

The Australian dollar ended Friday’s session little changed against its U.S. counterpart, as investors were reluctant to make big moves ahead of Sunday's closely-watched referendum in Ukraine’s Crimea region.

Monday, March 17

• The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.

Tuesday, March 18

• The Reserve Bank of Australia is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.
• The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.

Wednesday, March 19

• The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.

Thursday, March 20

• The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.

[Sergey Golubev]

GBP/USD Fundamentals - weekly outlook: March 17 - 21

The pound ended the week little changed against the dollar on Friday as concerns over the crisis in Ukraine and fears over an economic slowdown in China dampened risk appetite.

Monday, March 17

• The U.S. is to publish data on manufacturing activity in the Empire State, as well as reports on industrial production and long term securities transactions.

Tuesday, March 18

• The U.S. is to produce data on consumer inflation, in addition to reports on building permits and housing starts.
• Bank of England Governor Mark Carney is to speak at an event in London.

Wednesday, March 19

• The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings and public sector borrowing. Meanwhile, the Bank of England is to publish the minutes of its most recent policy setting meeting.
• The Federal Reserve is to announce its federal funds rate and publish economic forecasts for inflation and growth. The Fed statement is to be followed by a press conference with Chair Janet Yellen.

Thursday, March 20

• The U.K. is to release private sector data on industrial order expectations. The U.K. government is to make its annual budget statement.
• The U.S. is to publish the weekly report on initial jobless claims, as well as data on existing home sales and manufacturing activity in the Philadelphia region.

Friday, March 21

• The U.K. is round up the week with data on public sector net borrowing.