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...
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...
Dollar Rebounds Broadly as Risk Appetite Recedes
Dollar rebounds broadly today following receding risk appetite. Investors are apparently paring their gains in stocks. Swiss Franc and Euro are the next strongest, followed by Yen. On the other hand, Australian Dollar and Sterling are the worst performing. In particular, the Pound was weighed down by sharp deterioration...
Canada retail sales rose 1.3% in Nov, up in 7 of 11 subsectors
Canada retail sales rose 1.3% mom to CAD 55.2B in November, well above expectation of 0.0% mom/ That's the seventh consecutive monthly gain, led by sales at food and beverage stores, along with an uptick in e-commerce sales. Ex-auto sales rose 2.1% mom, above expectation of 0.3% mom.
Sales were...
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...
NZDUSD Fluctuates Around MAs But Upside Risks Remain
NZDUSD’s slide back under the 100-period simple moving average (SMA) at 0.7196 seems to have cemented the price within the confines of 0.7082-0.7240, of a sideways move. The range bound demeanour, after the price retracted from the multi-year high of 0.7314, looks to be nourished by the impaired and...
GBPJPY Rests Near 4½-Month High, Remains In Bullish Channel
GBPJPY has been moving higher within an upward sloping channel over the last four months, remaining above the 20- and 40-day simple moving averages (SMAs).
The price reached a four-and-a-half-month peak around 142.40, however, the technical indicators are mixed. The MACD is moving horizontally in the positive territory, while the...
USDCAD Calls For An Upside Reversal After New 33-Month Low
USDCAD stretched its March downtrend to a fresh 33-month low of 1.2588 on Thursday before completing the day with a bullish doji candle.
The positive candle formation is an indication of a coming upside breakout, which the price is currently pushing to confirm, as it is recovering towards its 20-day...
UK PMI composite dropped to 40.6 in Jan, sharp contraction in Q1
UK PMI manufacturing dropped sharply to 52.9 in January, down from 57, missed expectation of 53.0, a 7-month low. PMI Services dropped to 38.8, down from 49.4, missed expectation of 45.3, an 8-month low. PMI Composite dropped to 40.6, down from 50.4, an 8-month low.
Chris Williamson, Chief Business Economist...
Eurozone PMI composite dropped to 47.5, double-dip recession increasingly inevitable
Eurozone PMI Manufacturing dropped to 54.7 in January, down from 55.2, missed expectation of 55.0. PMI Services dropped to 45.0, down from 46.4, above expectation of 44.8. PMI Composite dropped to 47.5, down from 49.1.
Chris Williamson, Chief Business Economist at IHS Markit said: "A double-dip recession for the eurozone...
Germany PMI manufacturing dropped to 57.0, services down to 46.8
Germany PMI Manufacturing dropped to 57.0 in December, down from 58.3, missed expectation of 58.0. PMI services dropped to 46.8, down from 47.0, above expectation of 46.8. PMI Composite dropped to 50.8, down form 52.0, hitting a 7-month low.
Phil Smith, Associate Director at IHS Markit said: "There were few...
France PMI composite dropped to 47 in Jan, but return of employment growth a big positive
France PMI Manufacturing rose to 51.5 in January, up from 51.5, a 6-month high and beat expectation of 50.8. PMI services. on the other hand, dropped to 46.5, down from 49.1, missed expectation of 48.3. PMI Composite dropped to 47.0, down from 49.5.
Eliot Kerr, Economist at IHS Markit said:...
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...
Euro Rebounds Against While Stock Traders Take Profit
The forex markets are reversing some of this week moves today, as stock investors are also taking some profits ahead of the weekend. Euro is the better performing so far, followed by Swiss Franc, Dollar and Yen. Meanwhile, Sterling and commodity currencies are the weaker ones. As for the...
Elliott Wave View: Impulsive Rally In NZDUSD
Short Term Elliott Wave view in NZDUSD suggests the pair ended wave ((2)) pullback at 0.7093. This pullback ended correction of the cycle from September 24 low. Internal of wave ((2)) unfolded as a double three Elliott Wave structure. Wave (W) ended at 0.7144, wave (X) ended at 0.7239,...
Japan CPI core dropped to -1% yoy in Dec, worst since 2010
Japan CPI core (all item ex-fresh food) dropped further to -1.0% yoy in December, down from -0.2% yoy, but was above expectation of -1.1% yoy. That's still the biggest annual decline in core inflation since September 2010. Headline CPI (all items) dropped to -1.2% yoy, down from -0.9% yoy....
Japan PMI manufacturing dropped to 49.7 in Jan, short-term activity undoubtedly hampered by rising coronavirus cases
Japan PMI Manufacturing dropped to 49.7 in January, down from 50.0, back in contraction. PMI Services dropped to 45.7, down from 47.7. PMI Composite dropped to 46.7, down from 48.5.
Usamah Bhatti, Economist at IHS Markit, said: "Short-term activity will undoubtedly be hampered by rising coronavirus disease 2019 (COVID-19) cases,...
Australia retail sales dropped -4.2% mom in Dec, Victoria down -7%
Australia retail sales dropped -4.2% mom in December, much worse than expectation of -1.5% mom. Over than year, sales rose 9.4% yoy. Victoria led the falls by state, down -7% following a 22% rise in November, while New South Wales fell -5% as localized restrictions in Sydney impacted turnover....
Australia CBA PMI manufacturing rose to 57.2, 49-month high
Australia CBA PMI manufacturing rose to 57.2 in January, up from 55.7. That's also the highest level in 49 months. PMI Services dropped to 55.8, down from 57.0. PMI Composite dropped slightly to 56.0, down from 56.6.
Pollyanna De Lima, Economics Associate Director at IHS Markit, said: "The Australian private...
New Zealand CPI unchanged at 1.4% yoy in Q4, underlying inflation higher
New Zealand CPI rose 0.5% qoq in Q4, above expectation of 0.2% qoq. Annually, CPI was unchanged at 1.4% yoy, above expectation of 1.0% yoy.
The trimmed means CPI, which exclude extreme price movements, ranged from 1.7% to 2.1% yoy, indicating that underlying inflation is higher than the 1.4% overall...
USD/JPY Extends Losses, Recovery Could Face Hurdles
Key Highlights
USD/JPY extended its decline below the 103.50 support.
A major bearish trend line is forming with resistance near 103.80 on the 4-hours chart.
The US Initial Jobless Claims in the week ending Jan 16, 2021 declined from 926K to 900K.
The US Manufacturing PMI could decline from...
New Zealand BusinessNZ manufacturing dropped to 48.7, caution heading into the New Year
New Zealand BusinessNZ Manufacturing index dropped to 48.7 in December, down from 54.7. The manufacturing was back in contraction after staying in expansion territory for six straight months. Looking at some details, production dropped from 55.0 to 51.5. Employment dropped from 51.3 to 49.9. New orders dropped from 56.5...
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...
ECB Gets Slightly More Hawkish, Revealing that it might Not Use All of PEPP Envelope
The ECB left its powder dry in January. While continuing to warn of the downside risks on the Eurozone and global economy, the central bank delivered a hawkish tweak about operation of the Pandemic Emergency Purchase Program (PEPP). On the monetary policy measures, the central bank left the size...
US: Initial Jobless Claims Fall, but Still Point to Fragile Labor Market
The larger-than-expected decline in initial jobless claims last week is a welcome development, but at 900K, new filings remain elevated. Another negative print for payrolls in January remains within the realm of possibility.
Down, but Perhaps Not Enough to Escape Another Negative Payroll Print
After leaping over the first full week...
ECB Recap: EUR/USD Rallies as Lagarde Shrugs off Euro Strength
As my colleague Fiona Cincotta anticipated yesterday, the European Central Bank made no changes to monetary policy, determining that no additional stimulus was warranted (yet) despite another extension to pandemic-related lockdowns on the continent.
The headlines from the decision follow:
ECB Leaves Deposit Rate Unchanged at -0.50%
ECB Affirms Size...
Euro Recovers as ECB Sees Less Pronounced Downside Risk, Dollar Softens after Jobless Claims
Euro recovers mildly in early US session, after ECB said downside risks to the economic outlook are less pronounced. Though, it remains one of the worst performing for the week, together with Dollar, Yen and Swiss Franc. The greenback is clearly still under pressure for now, after worst than...
USDCHF’s Bullish Pressures Pause around Vicinity of 200-MA
USDCHF has poked back underneath the 200- and 100-period simple moving averages (SMAs) at 0.8866 and 0.8857. Its recent attempts to decisively surpass the 200-period SMA have ended up consolidating the price around it, thus keeping hopes of the bear market alive. The flattening 100-period SMA and the falling...