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Overview of the main economical events of the current day - 015/04/2014
The Euro Dropped amid Draghi’s Speech
On Monday 14 April the US dollar increased vs. the euro and the yen, having added 0.33% to the dollar index amid positive Retail Sales data in the USA, which were growing in March at maximum rate for over a year and a half. The euro dropped after ECB’s Mario Draghi’s speech. The pound sterling had almost no changes according to the results of the day amid Housing Market data in the UK.
Retail Sales in the USA increased in March by 1.1% comparing to the previous month, having exceeded the expectations of growth by 0.8% m/m – the rise appeared to be the highest since September, 2012. February data was upwardly revised. Retail Sales Ex Auto rose by 0.7% against the forecast of growth by 0.5%. The leading factor of growth became the increase of auto sales, which rocketed in March by 3.1% after the increase by 2.5% in February. Sales of 10 out of 13 main categories of retail goods increased in March.
The euro dropped during the first day of the week after ECB Mario Draghi’s speech on Saturday during which he pointed the danger of excessive strengthening of the euro. Strengthening of the European currency course may provoke ECB to taking additional measures of monetary policy easing, Draghi announced. Lately the strong euro bears pressure on the inflation. The course of the euro becomes more important factor in terms of estimation of price tendencies on the part of the ECB, Draghi added.
ECB's Christian Noyer also stated on Monday that the more intensely the euro grows the more soft the monetary policy should be. The strength of the euro is in obstacle on the way to achieving price stability. The growth of the euro which was observed last year, is unacceptable. At ECB’s disposal there is a series of policy instruments: assets purchase, interest rates decrease, and additional guide marks of monetary policy – Noyer announced.
According to the results of the day the pound sterling had almost no changes – the support is still rendered by the Housing Market data in the UK. The UK Rightmove House Prices reached in April new record high for the second month in a row. House Price Index increased in April by 2.6% - average price of the house put up for sale reached record £262,600. The growth composed 7.3% annual rate of increase in asking prices and became the highest since October, 2007. The prices grow due to lack of houses and mortgage availability.
The Australian dollar decrease after the Tuesday release of the last RBA Meeting Minutes. Reserve Bank of Australia pointed the period of interest rates stability. But the course of the Australian dollar still stays high according to historical standards. Its recent recovery doesn’t promote economy growth – and decrease of the AUD course still helps to return back to the balanced economy growth.
Reserve Bank of Australian noted that strong growth of investments to Housing Market is expected. However, the drop of investment to mining sphere and weak government expenditures will limit the growth. Labor Market indicators improved but more should be done for Unemployment Rate reduction. The New Zealand dollar was downwardly traded – Global Dairy Trade auction which will take place on Wednesday is among the risks for NZD. During the late auction milk prices reached the lowest level for over 13 months.
By MasterForex Company
Overview of the main economical events of the current day - 017/04/2014
The UK Unemployment Dropped to the 5-Years Low
On Wednesday April, 16 the US dollar was traded mixed, having almost no changes to the dollar index amid controversial statistic data in the USA. The US Industrial Output appeared to be better than expected, whereas Labor Market data appeared to be worse than expected. The pound sterling increased amid strong Labor Market data in the UK. The New Zealand dollar dropped after the release of weak Inflation Rate data.
The US dollar decreased vs. the pound sterling and the Australian dollar, but increased vs. the yen, the Canadian dollar, and the New Zealand dollar, having almost no changes vs. the euro. The US Industrial Output growth in March exceeded the expectations. Industrial Production increased in March by 0.7% m/m against the forecast of growth by 0.5%. The February growth of Industrial Production was revised from 0.6% m/m to 1.2%, which became the highest rise since May, 2010. Capacity utilization rate increased by 0.8% to 79.2% (it is the highest rate for over 15 months). Industrial Production increased for the second month in a row, and this fact is indicative of sector’s recovery after the winter recession.
At the same time Housing Market data didn’t reach the predictions. Building Permits dropped I March by 2.4% to 990,000, whereas decrease by 0.4% was expected. Housing Starts increase previous month only by 2.8% to 946,000 against the forecast of growth by 7%. New Housing Construction volume continued growing in March, but recovery is still unsteady and irregular due to mortgage loan rates increase and weak wages hike.
Fed’s Chair Janet Yellen announced on Wednesday that decisions regarding monetary policy will depend on three main factors: labor underutilization, low inflation, and possible disincentives for recovery. Yellen emphasized the weakness of Labor Market, its complicated dynamics and slow recovery, as well as the risk of low inflation. Economy prospects are not defined; Fed will watch the terms while policy formation.
On Wednesday the pound sterling almost exceeded the highs of 2009 after the release of strong Labor Market report in the UK, which demonstrated the decrease of Unemployment Rate to the lowest rate for over 5 years. ILO Unemployment Rate dropped in February to 6.9% from 7.2% in January. Decrease lower than 7% happened for the first time since 2009. Claimant Count Change reduced in March by 30,400 having coincided with the expectations – and reached the lowest rate since November, 2008.
The euro had almost no changes according to the results of the day. Final Inflation Rate data in the Euro-zone in March coincided with the initial estimations – Consumer Price Index growth decelerated in March to 0.5% y/y comparing to increase by 0.7% in February. Annual growth rate of Core Inflation Ex Energy and Food decreased to 0.7% from 1% in February, having slightly exceeded the forecast (+0.8% y/y).
The yen weakened its positions on Wednesday amid growth of Japanese stock market – Nikkei 225 rocketed by 3% after the most considerable weekly fall for over 3 years. BOJ’s Kuroda announced that the Central Bank will make every effort to achieve 2% target inflation rate.
The Canadian dollar decreased after the BOC decision to leave the key interest rate without changes. The Central Bank pointed downward risks for inflation and decreased the GDP growth forecast for 2014 due to deceleration of export and capital investment rate. BOC Poloz expressed neutral position in terms of interest rate, but he announced that on this very stage it is impossible to eliminate the possibility of its decrease.
The Australian dollar strengthened its positions amid Chinese economy growth data, which appeared to be better than it was expected. Chinese GDP growth rate in the first quarter decelerated to 7.4% y/y from 7.7% in the 4th quarter of 201, but appeared to be better than expected growth by 7.3%. At the same time, Industrial Output and Fixed Asset Investment in March appeared to be worse than expected. The New Zealand dollar dropped after the release of weak Inflation Rate data, but then it negated almost all the losses. Inflation increased in the 1st quarter only by 0.3% q/q against the forecast of +0.5%.
By MasterForex Company
Overview of the main economical events of the current day - 18/04/2014
Philadelphia Fed Manufacturing Index Rose to 7-Month High
On Thursday 17th April the US dollar strengthened its positions vs. most major currencies amid Philadelphia Fed Manufacturing Index growth to the highest level for over 7 months. The US Labor Market data also appeared to be better than expected.
The US dollar increased vs. the Australian dollar, the New Zealand dollar, the yen, and the Swiss franc, but had almost no changes vs. the euro, the pound sterling, and the Canadian dollar. The US dollar gained back the losses of the first half of the day after release of positive statistic data in the USA. Philadelphia Fed Manufacturing Index increased in April to 16.6 p. comparing to 9 p. in March, having considerably exceeded the expectations at the level of 10 p. New Orders, Shipments, and Employment considerably increase as well.
Initial Unemployment Claims appeared to be better than expected and still stay at low rates since May, 2007. Initial Unemployment Claims in the USA increased last week by just 2,000 to 304,000, whereas growth by 13,000 to 315,000 was predicted. Four-Week Moving Average of Initial Claims continued its reduction, having dropped by 4,750 from 316,750 to 312,000, which became the lowest reading since October, 2007.
On Thursday the pound sterling reached the highest rate vs. the US dollar since November, 2009, but then it decreased. The euro also had almost no changes according to the results of the day amid decrease of Producer Price Index in Germany, which dropped more than it was expected. Producer Prices decreased by 0.3% to the previous month, whereas no changes were expected. In an annual rate Producer Price Index dropped by 0.9% against expectations of decrease by 0.7% y/y.
The yen continued its weakening amid positive dynamics of stock markets and weakening of geopolitical tension after the start of negotiations about Ukraine in Geneva. The Japanese Government reduced the estimation of economy situation for the first time since November, 2012 due to the fact that consumers reduced spending after recent sales tax increase in the country. Consumer Confidence in Japan dropped in March to the lowest rate for over 2.5 years.
On Thursday AUD and NZD decrease most of all. The Australian dollar was traded downwards amid drop of Business Confidence in Australia and decrease of Chinese Actual Foreign Direct Investment. NAB Business Confidence decreased in the 1st quarter to 6 p. from 3-years high at the level of 8 p. in the previous quarter. New Motor Vehicle Sales dropped in Australia in March by 0.3% m/m after decrease by 0.1% in February. Actual Foreign Direct Investment in China in March reduced by 1.5% y/y against the expectations of growth.
The Canadian dollar had almost no changes according to the results of the day amid Consumer Price Index increase in Canada. Inflation annual growth rate accelerated in March to 1.5% from 1.1% in February, having exceeded the expectations of growth by 1.4% y/y. Core inflation increased by 1.3% comparing with the growth by 1.2% in the previous month, which coincided with the forecast. Canadian Inflation Rate data reduced the probability of taking measures for monetary policy easing.
By MasterForex Company
Overview of the main economical events of the current day - 22/04/2014
The Yen Dropped after the Release of Trade Balance in Japan
On Monday 21 April the US dollar was traded mixed amid Easter holidays in majority of developed countries and absence of any significant macro statistics. The yen dropped after the release of weak Trade Balance data in Japan.
The US dollar strengthened its positions vs. the euro and the yen, but had almost no changes vs. the pound sterling and major commodity currencies – having added 0.14$ to the dollar index. Chicago Fed National Activity Index considerably decreased in March, but February data was upwardly revised. CB Leading Indicator increased in March more than it was expected.
Chicago Fed National Activity Index dropped in March to 0.20 p. from 0.53 p., but not to 0.14 p. as it was forecasted earlier. The index’s three-month moving average (CFNAI-MA3) increased to a neutral reading in March from –0.14 in February. The index still marks the growth of the activity, though its deceleration was pointed. The biggest contribution was made by industrial indicators and Sales.
CB Leading Indicator increased in March by 0.8% after its strengthening by 0.5% in February; it has exceeded the expectations of growth by 0.7%. The index grows for the third month in a row. After the winter break the economy growth recovers. Steady growth of Employment, rise of Consumer Confidence, and Demand promote increase of household spending. Five out of ten readings of the index improved in March, but decrease of Building Permits didn’t let the indicator demonstrate a more significant growth.
The yen dropped to the lowest rate vs. the US dollar for over two weeks after the release of weak Trade Balance data in Japan. Trade Balance deficit in Japan expanded in March to 1.45 trillions of yen in comparison with the deficit of 0.80 trillions of yen in the previous month, having considerably exceeded the predictions at the level of 1.07 trillions of yen.
Increase of Trade Balance deficit in Japan was caused by weakening of export from Japan, which increased by 1.8% y/y against the expectations of growth by 6.3%. Import increased to 18.1% y/y having exceeded the forecasts of growth by 16.2%. Trade Balance deficit in Japan is fixed for the 21th month in a row – it is the longest period since 1979.
The euro dropped at the American session lower than the reading of $1.38 after several days of trading that was higher than this rate. Market volatility decreases: weekly range of the EURUSD pair last week appeared to be the lowest throughout the trading history of the common European currency – just 75 p.
German Ministry of Finance announced on Monday that there are no visible deflation tendencies in the country – German economy enjoys a boom which will expand in 2014. German GDP growth will be weaker in the 2nd quarter in comparison with strong rise in the 1st quarter on which the mild weather affected.
By MasterForex Company
Overview of the main economical events of the current day - 23/04/2014
The Australian Dollar Sharply Dropped Amid Inflation Rate Data
On Tuesday 22 April the US dollar was traded slightly downwards vs. most major currencies amid persisting fall of Existing Home Sales in the USA. The euro and the pound sterling were traded upwards. The Australian dollar sharply dropped after the release of weak Inflation Rate report in Australia.
The US dollar decreased vs. the euro, the pound sterling, the Australian dollar, and the New Zealand dollar; increased vs. the Canadian dollar ad had almost no changes vs. the yen and the Swiss franc. The US dollar gained back part of the losses against the euro after the release of Housing Market data, which appeared to be better than expected.
Existing Home Sales in the USA decreased in March by 0.2% in comparison with the previous month – to 4.59 m of houses, whereas decrease by 0.9% m/m was expected. Sales stayed at the lowest level since July 2012 as it was in the previous month – and they decrease for seven months in a row from the last eight months. Persistent fall of Existing Home Sales points that the recovery of Housing Market will be slower than it was expected earlier.
FHFA House Price Index increased in February by 0.6% m/m which coincided with the expectations. Richmond Manufacturing Index appeared to be better than forecasted – it increased to 7 p. in April against -7 p. in March, whereas growth only to 0 p. was expected. The Richmond Fed's regional manufacturing activity recovers after the reduction in February and March.
On Tuesday the euro was traded upwardly amid increase of Consumer Sentiment in the Euro-zone, the pound sterling also strengthened its positions. Preliminary Consumer Confidence in the Euro-zone increased in April to -8.7 p. against -9.3 p. in March, having exceeded the expectations of growth to -9.1 p. The reading became the best since October 2007 before the financial crisis. Consumers of the Euro-zone started evaluating their prospects in a more optimistic way; improvement of the Labor Market situation promotes increase of confidence supporting the economy recovery.
Construction volume in the Euro-zone increased in February by 0.1% m/m after the growth by 1.6% in January. Increase of Construction decelerated in February, though it continues for the third month in a row. ECB’s Benoit Coeure announced on Tuesday that ECB follows the euro’s course in order to evaluate the influence of persistent power of the European currency for the strong inflation rate in the Euro-zone. Citigroup estimates more than 50% possibility of ECB’s asset purchase this year.
The Australian dollar strengthened its positions on Tuesday before the key Inflation Rate report in Australia. CB Leading Index increased in February by 0.3% m/m, the growth continues for the sixth month in a row. However Inflation data appeared to be worse than expected, and AUD sharply dropped. Consumer Price Index increased in the 1st quarter by 0.6% q/q, whereas growth by 0.8% was predicted. Preliminary HSBC Manufacturing PMI also increased in April less than expected (48.4 p.) – to 48.3 p.
The Canadian dollar slightly decreased after the release of the US data, which appeared to be better than expected. CAD had almost no reaction for Wholesale Sales data in Canada, which exceeded the expectations. Wholesales Sales increased in February by 1.1% m/m against the expectations of growth by 0.7%. The growth rate appeared to be the highest for over seven months.
By MasterForex Company
Overview of the main economical events of the current day - 29/04/2014
The Pound Sterling Hits the Year Highs
On Monday 28 April the US dollar was traded mixed amid the US Pending Home Sales data which appeared to be better than expected. The pound sterling and the euro increased before the start of two-days FOMC Meeting on Tuesday, the results of which will be announced on Wednesday.
The US dollar increased vs. the New Zealand dollar, the Australian dollar, and the yen, but decreased vs. the euro, the pound sterling, and the Canadian dollar, having lost slightly less than 0.1% to the dollar index. The US dollar was decreasing in the first half of the day vs. the European currencies, but gained back almost all the losses to DX after the release of the US Pending Home Sales data, which increased for the first time after 8-month reduction.
NAR Pending Home Sales increased in March by 3.4% m/m after the decrease by 0.5% in February – whereas growth by only 1% was expected in March. Monthly growth rate became the highest since January, 2012. Pending Home Sales Index increased in March to 97.4 from upwardly revised 94.2 in February, which was the lowest reading of the index since autumn 2011.
The March growth of Pending Home Sales is the sign of stabilization possibilities and quit of sector out of the weakness period. Dallas Fed Manufacturing Activity also appeared to be better than expected and increased to 7-months high. The index increased in April to 11.7 against 4.9 in March, having exceeded the forecasts of growth to 6. At that Production and New Orders strengthened their positions to 4-years high, and Employment – to 2-years high.
The euro was in requisition during the European session on Monday and strengthened its positions to 2-week high vs. the US dollar. According to analysts of CitiFX China, which diversified its foreign exchange reserves, stood for purchase of the euro and the pound sterling. Growth of the Italian Consumer Confidence to the highest rate for over more than 4 years supported the strengthening of the euro. Italian Consumer Confidence jumped in April to 105.4 p. in comparison with 101.9 p. in March, whereas the decrease of the index was expected.
ECB’s President Mario Draghi announced on Monday that he doesn’t expect any deflation continuity for the Euro-zone in the economy of which he sees positive signs – but the growth of the economy is still weak. Draghi expects for the continuation of the problem of low inflation, but QE is far from being realized. QE is still a possible variant of monetary policy, but it is considerably relative. ECB’s Noyer also eliminated the risk of deflation in the Euro-zone, but he marked that the high course of the euro pressurizes the prices and promotes inflation slowdown.
The pound sterling refreshed the high of the year and reached new 4.5 year high vs. the US dollar before the release of GDP growth data on Tuesday. The UK Hometrack House Prices continued its growth for the 15th month in a row due to the fact the impulse at the Housing Market expanded beyond London. House Prices growth is driven by low interest rates of the Bank of England, real estate deficit for sales and economy strengthening, which creates new working places.
Economic growth continued to gather pace in April, alongside predictions of even stronger growth in the next quarter, according to the latest CBI Growth Indicator. Growth strengthened across the retail and service sectors, while manufacturing output growth remained solid. The outlook for the next three months points extremely strong broad-based growth.
On Monday the New Zealand dollar was traded downwards and reached the lowest rate vs. the US dollar for over almost a month before the release of New Zealand Trade Balance data. The released data almost coincided with the expectations – Trade Balance proficit increased in March to 920 m of New Zealand dollars against the forecast of 937 m. the yen weakened its positions amid positive dynamics of stock markets and absence of signs of aggravation of situation around Ukraine, which led to decrease of demand for save heaven currency.
By MasterForex Company
Overview of the main economical events of the current day - 06/05/2014
The US Non-Manufacturing PMI Still Grows
On Monday 5 May the US dollar was traded with a slight decrease vs. most major currencies, having almost o changes to the dollar index amid Non-Manufacturing Growth in the USA.
Released data of Non-Manufacturing PMI growth to 8-month high didn’t have impact to trades which passed on Monday at thin volume with low activity. Market participants still evaluate Non-Farm Payrolls released at the end of the last week, the data considerably exceeded the forecasts – speech of Fed’s Chair Janet Yellen with possible comments to the recent data is also expected on Wednesday.
US Non-Manufacturing PMI continued in April for the second month in a row and exceeded the expectations. ISM Non-Manufacturing PMI increased in April to 55.2 p. in comparison with 53.1 p. in March, whereas growth only to 54.1 p. was expected. Production, Inventories, New Orders, and Import demonstrated the largest growth, whereas Employment demonstrated decrease after considerable growth of the previous month. The data indicates resuming of the US economy acceleration.
At the same time Markit demonstrated decrease of Services PMI in the USA in April. Final Markit Services PMI decreased in April to 55 p. from 55.3 p. in March, though it exceeded the initial estimations of 54.2 p. The Conference Board Employment Trends Index continued its growth in April for the sixth month in a row and strengthened its positions to 118 p. against the upwardly revised 117.77 p. in March. Five out of ten index components increased in April.
The euro inconsiderably increased on Monday amid release of quarterly EU Economic Forecasts. European Commission forecasts gradual recovery of the region’s economy till the end of 2015, but it also warns that low inflation and strain in relations with Russia may prevent the region’s overcoming the crisis.
European Commission decreased the forecasts of the Euro-zone economy for 2015, and also decreased the forecasts of inflation and unemployment for the nearest two years. GDP growth forecast for 2015 is reduced to 1.7% from 1.8% (the forecast for the current year is left without changes). Inflation forecasts are decreased for 2014 to 0.8% from 1% and forecasts for 2015 – to 1.2% from 1.3%. Unemployment in 2014-2015 is expected at the level of 11.8% and 11.4% respectively against the previous forecast of 12% and 11.7%.
Sentix Investor Confidence sharply decreased in May after 4 months of growth. The index dropped to 12.8 p. in comparison with 14.1 p. in April against the expectations of growth. In March Euro-zone Producer Price Index continued reduction for the third month in a row, having decreased by 0.2% m/m which added concerns of low inflation which may prevent region’s economy recovery. Producer Price Index dropped in March by 1.6% in an annual rate after the decrease by 1.7% in February which was the largest decrease since December 2009. At the same time ECB’s Mersch announced that ECB doesn’t see inflation or deflation risks in mid-term.
On Monday the Australian dollar appeared to be under pressure after release of weak Chinese data and Australian Labor Market, but till the end of the day it gained back all the decrease. HSBC Final Manufacturing PMI strengthened its positions in April only to 48.1 p. from 48 p. in March, whereas it was conveyed about the growth to 48.3 p. The index increased after 5 months of reduction when it dropped to 8-month low.
Building Approvals in Australia dropped in March by 3.5% m/m after the reduction by 5.4% in February, whereas growth of the reading was expected. The New Zealand dollar was traded upwards on Monday continuing the tendency of growth of the last week. The Canadian dollar also rose amid general weakness of the US dollar.
By MasterForex Company
Overview of the main economical events of the current day - 12/05/2014
Main Events of the Coming Week
On Friday 9 May the US dollar increased vs. all major currencies, having added 0.56% to the dollar index amid large-scale growth of the American currency against the euro and European currencies. The euro and the pound sterling continued its reduction on Friday. The Canadian dollar dropped after the release of Employment Change in Canada.
The euro continued its decrease on Friday, having dropped to monthly low vs. the US dollar – after on Friday ECB’s Mario Draghi signaled that ECB is ready to soften monetary policy during the next Meeting in June. German Trade Balance and Industrial Output in Italy also appeared to be worse than expected. German Trade Balance proficit decreased in March to 10-month low at the level of €14.8 m from €15.8 m in February against the expectations of growth. German Export reduced in March for the second month in a row. Industrial production in Italy dropped in March by 0.5% m/m against the expectations of growth by 0.3%.
The pound sterling decreased after the release of the UK March Industrial Output, which dropped by 0.1% m/m, whereas no changes were expected. Manufacturing Output increased by 0.5% m/m, having exceeded the forecasts by 0.3% - for the 1st quarter of this year the manufacturing growth became the highest for over 15 years (+1.4% q/q). The pound sterling rallied after the release of NIESR GDP Estimate, according to which the growth of the British economy accelerated. The UK GDP growth for three month till April composed 1% (against +0.8 in the previous month), which is the highest growth since June 2010.
The Canadian dollar sharply dropped after release of the Canadian Employment Change. Employment rate dropped in April by 28,900 against the expectations of growth by 12,000 which became the worst result for over 4 months. Unemployment had no changes at the level of 6.9% as it was forecasted. The Australian dollar slightly decreased on Friday and had almost no reaction for the release of quarterly RBA monetary policy report in which the forecasts of inflation growth for this year were slightly decreased, whereas forecasts of GDP growth were increased.
According to the results of the week the US dollar demonstrated mixed dynamics vs. major currencies, having added 0.46% to the dollar index (the highest growth for 7 weeks). The US dollar increased vs. The Swiss franc, the euro, the pound sterling, and NZD, but decreased vs. AUD, CAD, and the yen. The most considerable growth to the dollar index was accounted for the last two days of the week after Mario Draghi’s announcement of possible softening measures in June.
On Monday in the USA Federal Budget Balance will be released; on Tuesday – Retail Sales and Import Prices; on Wednesday – Producer Price Index; on Thursday – Philadelphia Fed Manufacturing Index, NAHB Housing Market Index, Consumer Price Index, Treasury International Capital (TIC) Flows, and Industrial Output; and on Friday – Building Permits, Housing Starts, and Preliminary U. of Michigan Consumer Sentiment. On Friday Fed Chair Janet Yellen is due to speak at the US Chamber of Commerce and US Small Business Administration as part of National Small Business Week, in Washington DC.
The main event of the week in the Euro-zone will be the Thursday release of preliminary GDP of France, Germany, Italy, and the whole Euro-zone for the 1st quarter to 0.4% q/q against 0.3% in the previous quarter. On Wednesday the Euro-zone Industrial Output will be released; on Thursday – Final Inflation Rate and monthly ECB’s report; and on Friday the Euro-zone Trade Balance will be also released. On Tuesday German ZEW Economic Sentiment is going to be released; and on Wednesday – Final Inflation Rate. On Tuesday Inflation Rate data will be released in Italy as well, and on Wednesday it will be released in France and Spain.
The most important day for pound sterling will be Wednesday when the UK Labor Market will be released – and Quarterly BOE Inflation report will be released with new forecasts about Unemployment, GDP, and Inflation Rate; after that BOE’s Governor will have a report. On Thursday in Japan Preliminary GDP for the 1st quarter will be released. On Tuesday in China Industrial Output, Retail Sales, and Fixed Asset Investment will be released.
On Monday in Australia NAB Business Confidence will be released; on Tuesday – House Price Index and Home Loans; and on Thursday – New Motor Vehicle Sales. On Tuesday Annual Budget Release will be performed in Australia. On Wednesday in New Zealand quarterly Retail Sales report and semiannual RBNZ Financial Stability Report will be released; and RBNZ Wheeler’s press-conference will also take place. On Thursday Annual Budget Release of New Zealand will be performed as well.
By MasterForex Company
Overview of the main economical events of the current day - 15/05/2014
Pound Sterling Dropped After Double Impact
On Wednesday 14 May the US dollar was traded downwards vs. most major currencies, having lost slightly less than 0.1% to the dollar index amid the US Producer Price Index. The pound sterling dropped after the release of the UK Labor Market and BOE Inflation Reports.
On Wednesday the index dollar stopped its 5-day growth despite released Producer Price Index which appeared to be better than expected. The US dollar was pressed by 10-year US Treasury Yield till the lowest rate since October.
Producer Price Index increased in April by 0.6% in comparison with the previous month having thrice exceeded the expectations. PPI increased in April by 2.1% in an annual rate, having exceeded the forecasts by 1.7%. Annual PPI Growth Rate appeared to be the highest for over two years. Core Consumer Price Index ex Food and Energy increased in April by 1.9% against the expectations of growth by 1.4%.
The euro stopped the decrease and slightly increased amid Industrial Production. Euro-zone Industrial Production decreased in March by 0.3% m/m which coincided with expectations. Industrial Production reduced by 0.1% in an annual rate, whereas growth by 0.9% y/y was predicted. ECB’s Praet announced that ECB is preparing whole range of measures of fighting with inflation deceleration. Among the measures Praet mentioned decrease of core interest rate, introduction of negative deposit rate, and new round of loan program. He also mentioned that asset purchase new program launch similar to FOMC’s program should not be expected from ECB.
The pound sterling dropped to 4-week low vs. the US dollar after release of the UK Labor Market. Unemployment decreased in accordance with the expectations; however decrease of unemployed and increase of average earnings index appeared to be worse than expected. The UK Unemployment Rate dropped by 0.1% in the 1st quarter to 6.8% - this is the lowest rate for over 5 years. Claimant Count Change reduced in April by 25,100 and didn’t manage to reach the forecasted 30,000. Average Earnings Index increased in the 1st quarter by 1.7% against the expectations of growth by 2.1%.
Additional pressure for the pound sterling was brought by the report of BOE which spoke for tendency of soft policy. BOE left the GDP and Inflation Rate forecasts without changes. The report market further improvement of economy and Labor Market, but all in all it saved its mild tune. Capacity Utilization Rate had almost no changes since February, having composed 1%-1.5% despite recent improvement of Labor Market and increase of economy growth forecasts. The report dispelled hopes for earlier increase of interest rate pointing the fact that it will be increased in the end of the 1st quarter or in the beginning of the 2nd quarter of 2015. Many market participants expected it in the end of the current year.
The Australian dollar increased to monthly high vs. the US dollar after the Tuesday release of Budget Execution Review of Australia for the next financial year, which was positively accepted by the investors. Australia switches to policy of tax increase and reduction of spending for the fight with deficit budget. New Zealand dollar also strengthened its positions after the release of RBNZ Financial Stability Report. RBNZ’s Wheeler announced that financial system of New Zealand will stay strong despite the risks.
By MasterForex Company
Overview of the main economical events of the current day - 19/05/2014
Main Events of the Coming Week
On Friday 16 May the US dollar was traded mixed, having almost no changes to the dollar index amid controversial US data. Housing Market exceeded the expectations, whereas the US Consumer Confidence dropped.
On Friday the US dollar was traded with a slight change vs. major currencies, having strengthened its positions vs. the Swiss franc, the New Zealand dollar, and the euro, but having decreased vs. the Canadian dollar and the pound sterling. Building permits and Housing Starts increased last month which appears to be the sign of recovery after unfavorable winter.
Building Permits increased in April by 8% to 1.08 m of houses – this is the highest rate for over 6 years since June 2008. Housing Starts increased last month by 13.2% to 1.07 m of houses (5-month high). Building Permits increase by 1% and Housing Starts increased by 3.6% were predicted.
Consumer Confidence decreased in May from the highest rate of 10 months, which was reached in April despite the expectations of growth. Preliminary UoM Consumer Sentiment dropped in May to 81.8 p. in comparison with Final April reading of 84.1 p., whereas in May the growth to 84.5 p. was expected. Both Present Situation and Expectations decreased. Energy, petrol, and Food prices growth negatively influenced Consumer Sentiment.
The euro was traded with a slight decrease amid the Euro-zone Trade Balance. Euro-zone Trade Balance proficit with seasonal adjustment increased in March less than it was expected – to €15.2 B from €15.0 B in February, whereas growth to €17.3 B was predicted. At that export and import dropped for the first time since late 2013. The New Zealand dollar slightly decrease amid the speech of the Minister of Finance of New Zealand who announced that NZD course is still high, which makes economy rebalancing complicated.
According to the results of the week the US dollar demonstrated multidirectional dynamics vs. Major currencies, having added 0.24% to the dollar index and having strengthened its positions to DX for the second week in a row. The US dollar increased vs. the European currencies, but fell vs. the yen and commodity currencies, having no changes vs. AUD. The US dollar demonstrated the largest growth vs. the Swiss franc and the euro, and the most considerable fall vs. the yen and the Canadian dollar.
On Wednesday in the USA Last FOMC Meeting Minutes will be released; on Thursday – Existing Home Sales, Flash Markit Manufacturing PMI, Chicago Fed National Activity Index, and CB Leading Index; and on Friday – New Home Sales. On Wednesday Fed’s Chair Janet Yellen is due to deliver opening remarks at the New York University Graduates Commencement Ceremony.
On Monday in the Euro-zone Construction Output will be released; on Wednesday – Current Account and Preliminary Consumer Sentiment; on Thursday – Flash Manufacturing PMI and Flash Services PMI for France, Germany, and the whole Euro-zone (a slight decrease of the indices is predicted). From Thursday till Saturday European Parliamentary Elections will take place. On Tuesday in Germany Producer Price Index will be released, and on Friday – German IFO Business Survey, and Final GDP for the 1st quarter.
On Tuesday in the UK Inflation Rate data will be released; on Wednesday – Last Bank of England Meeting Minutes and Retail Sales; and on Thursday – second estimation of GDP for the 1st quarter, government finance, and Core Machinery Orders, and on Wednesday – Trade Balance. The results of two-days Bank of Japan Meeting will be announced on Wednesday. On Thursday in Flash HSBC Manufacturing PMI will be released.
On Tuesday in Australia Last Meeting Minutes of the Reserve Bank of Australia and CB Leading Index will be released; and on Wednesday – Westpac Consumer Confidence, and Wage Price Index. On Monday in New Zealand quarterly Producer Price Index will be released, and on Thursday – Inflation Expectations. On Wednesday in Canada Wholesale Sales will be released; on Thursday - Retail Sales, and on Friday – Inflation Rate.
By MasterForex Company