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Weekly Economic & Financial Commentary: Mixed Fortunes for the Global Economy

U.S. Review Housing Remains at the Forefront of the Recovery Housing starts jumped 5.8% during December. Single-family starts soared 12%, while multifamily starts dropped 13.6%. Total starts are running at a 1.67 million-unit pace, the strongest pace since 2006. Existing home sales rose 0.7% to a 6.76 million-unit pace in...

The Weekly Bottom Line: Biden’s Stimulus Would Boost Growth

U.S. Highlights President Biden's inauguration was the marque event this week. Previous market optimism on the stimulus potential of the new administration seemed to run out of steam at week's end. The current administration has ambitious plans for further Covid-19 relief, but it remains uncertain what Congress will agree...

Forward Guidance: Economic Recovery Stalled by Second COVID Wave

The economic impact of the second wave of virus spread will take center stage next week with the release of November Canadian GDP data – and preliminary estimate for December. We expect a 0.2% increase in November GDP – half Statistics Canada’s earlier 0.4% advance estimate. A pullback in...

Week Ahead: Coronavirus and FOMC in Focus

In a ceremonial event, Joe Biden was sworn in as President of the United States on Wednesday, and the day went off without a glitch.  Immediately, he must deal with the problem that his processor couldn’t get a grip on – controlling the coronavirus and getting the vaccines distributed. ...

Week Ahead – Earnings to Dominate

Big tech in focus Earnings season is up and running and next week will see some huge names reporting on the fourth quarter including Facebook, Apple and Tesla. Covid-19 is becoming more of a focus for investors as lockdowns take their toll and it becomes clear that restrictions won’t be...

Week Ahead – Fed Meeting, Barrage of Data, and Tech Earnings

With President Biden now in office, markets will be on alert for any remarks from US Senators about whether they’d support the massive stimulus bill he proposed. A tough negotiating battle could see the final proposal being watered down. The Federal Reserve will meet as well. No policy changes...

Weekly Focus – Momentum Setback

The strong start in markets from early January experienced some setback this week on rising infections, as countries are hit by a second wave of COVID-19 despite vaccinations gathering pace as well as bond markets falling back (in yields). With President Biden taking office and the significant fiscal expansion...

Cliff Notes: Gauging Economic Strength at the Turn of the Year

Key insights from the week that was. This week saw a number of key data updates globally, most notably consumer sentiment and the labour force survey in Australia and GDP for China. In Washington DC, Joe Biden was also sworn in as the 46th US President. Beginning with Australian Westpac-MI consumer...

Canada: Retail Sales Post a Strong Gain in November Even as Restrictions Intensify   

Retail sales surged by 1.3% in November, defying Statistics Canada's preliminary forecast which called for a flat reading. Adjusting for price effects, the performance was relatively similar with the volume of sales up 1.2%. October's gain was revised lower to 0.1%, down from 0.4% reported originally. Taken together...

Sunset Market Commentary

Markets January PMI’s confirmed the gut feeling of an economic setback caused by fresh and extended lockdown measures to fight Covid-19 (mutants). The EMU composite PMI declined from 49.1 to 47.5, broadly in line with consensus. The underlying divide between strength in the export-oriented manufacturing sector (54.7 from 55.2) and...

A Tough End to the Week

Stock markets are ending the week on a negative note after a period of consolidation so far this month. It’s been a strange start to the year following a bumper two months, with vaccine optimism keeping sentiment upbeat despite the growing near-term Covid risks. The political distraction in the US...

NZ Dollar Slips on Soft Manufacturing Data

The New Zealand dollar has reversed directions on Friday and recorded considerable losses. Currently, NZD/USD is trading at 0.7176, down 0.55% on the day. New Zealand CPI was stronger than expected in the fourth quarter of 2020. Inflation climbed 0.5%, well above the RBNZ forecast of 0.2%. Westpac Banking had...

Oil Pulls Back, Gold Edges Lower

Oil may see a minor correction Oil prices are pulling back a little today after failing to break through previous highs on Wednesday. WTI is seeing serious resistance around USD54 which may drain momentum out of the rally that was looking in good shape. Perhaps we’re finally seeing some profit-taking...

Oil Dips Lower, Gold Yawns

Oil corrects lower in Asia markets Oil prices were mostly steady overnight with Brent crude and WTI almost unchanged at USD56.00 and USD53.00 a barrel respectively. In line with the more cautious tone displayed by financial markets today in Asia, both contracts have retreated. Brent crude is down 1.05% to...

US Dollar Retreats On Stimulus Hopes

The dollar wilts before the stimulus trade The US dollar index retreated overnight as markets continued to rotate out of US dollars and into global recovery facing commodity and Asian currencies. The dollar index fell 0.40% to 90.04, leaving it squarely in the middle of its 89.00 to 91.00 two-month...

Equity Markets Retreat In Asia

Asian markets lower as caution is the word Wall Street was marked by a mixed session overnight. The S&P 500 was almost unchanged, while the Nasdaq got an Apple VR boost, rising 0.55%. The Dow Jones suffered big-oil executive order fatigue, finishing 0.04% lower. The bickering between the Senate leaders...

Stay Safe Friday

Wall Street positive but Asia cautious Wall Street had another positive session overnight, but a few swirling doubts have crept into Asian markets, with equities across the region indicating that regional investors prefer caution as the week closes. Hong Kong has announced a complete lockdown of part of Kowloon this...

USD Continues Its Slide Lower

The USD seems to be heading for the worst week in the month today as the markets seem to be characterized by a positive mood, probably spurred also by the change of government and its big spending plans. Against EUR, the greenback is in the back foot as the...

GBP/USD Outlook: Sterling Is At A Crossroads As Weak Data Hurt Bulls

Cable pulled back from new high in early European trading on Friday, pressured by weaker than expected UK data which showed weak recovery in retail sales in December after November’s plunge on lockdowns and downbeat PMI’s, as services sector was hit much more than expected and activity in manufacturing...

UK Economic Data Highlighted That Coronavirus Continued To Weigh On The Economy

Notes/Observations Major European Jan Preliminary PMI readings remain in expansion despite lockdown restrictions (Beat: Euro Zone, France; Misses: Germany, UK) UK economic data highlighted that coronavirus continued to weigh on the economy (retail sales missed while govt borrowing data rose to record levels). Italian politics remain in focus with...

Stocks Retreat, Dollar Edges Up As Virus Concerns Creep In Again

Equity rally loses steam after strong weekly gains amid renewed virus jitters Talk of Biden tax increases also undermines risk appetite, lifting the dollar Poor data pull down pound and aussie but euro fares better after ECB stays put Virus outbreaks, recession fears cap risk rally The stimulus-led stock market...

Stocks Cool Off From Record Highs

US futures in the red. Major events next week could dictate risk sentiment. Bullish case for equities still valid. Oil benchmarks pare weekly advance. The rally in global stocks is taking a breather before the weekend, having posted a new record high on Thursday. Most Asian benchmark indices are...

Markets Await Important Data To Be Published Today

Markets The ECB kept policy unchanged yesterday. During an overall cautiously optimistic but not very informative press conference, ECB president Lagarde said the bank's aims is to preserve favourable financing conditions across the euro zone and will adjust policy accordingly. For the first time however, the policy statement formally notes...

ECB On Hold And Hoping To Stay There

As expected, no policy change delivered or signalled. ECB emphasises mixed signs in current oulook. Obstacles to early policy changes look immense. Preserving ‘favourable financing conditions' the key current focus for ECB. But guidance lacking on what ‘favourable conditions' might mean in practice. Markets may explore ECB's tolerance...

Crude Oil Price Points Lower Ahead Of EIA Inventories

The New Zealand dollar declined in early trading even after relatively strong inflation numbers from the country. According to the statistics bureau, consumer prices rose by 0.5% in the fourth quarter. This was better than the expected increase of 0.1%. The prices increased by 1.4% on an annualised basis....

Ineffective Vaccines A Key Tail Risk For Global Recovery

Market movers today Today's focus is on preliminary PMIs for the euro area (including Germany and France), the UK and the US. Most PMIs are likely to show that we are still in the middle of a manufacturing boom, while the service sector is struggling due to restrictions. This...

Asian Equities Trade Generally Lower After Mixed US Session

General Trend Financial and Property firms decline in HK and Shanghai; Chinese press commented on additional property-related curbs, HK said to plan to lock down part of a district CNOOC declines on MSCI index removals Topix Iron/Steel, Insurance and Securities indices drop, Marine Transportation rises; Tokyo Steel is expected...

US: Housing Starts End the Year on Strong Footing 

U.S. housing starts rose by 5.8% to 1.67 million units (annualized) in December from an upwardly revised 1.59 million units in November. The December outturn beat market expectations for a much more staid increase to 1.56 million units. Last month's strong performance was once again powered by single-family...

Central Banks Ready and Willing

Stock markets are broadly flat on Thursday as numerous central banks held their first policy meetings of the year and earnings season continued. So much focus has been on the transition in Washington and Joe Biden's inauguration but today we've had multiple major monetary policy meetings, albeit no action from...

Sunset Market Commentary

Markets The ECB left key policy parameters unchanged. The deposit rate remains at a negative -0.5%. APP runs at a €20bn pace/month. Net bond buying under PEPP will continue until March 2022 while maturing securities will be rolled-over at least until end 2023. The ECB has repeatedly said they could...