MORNING ROLL CALL

Mar 1 • Morning Roll Call • 3254 Views • 9 Comments on MORNING ROLL CALL

DJIA snaps it’s record winning streak, SPX also closes lower, U.S. dollar rises, whilst markets were primed for Trump’s address to Congress.

From awaiting Trump’s tweets to movebetween-the-lines1 the markets, investors and traders now also have to focus on his regular addresses to lawmakers, or assembled decision makers, in order to gauge market sentiment and direction. Many in the analyst community are now scratching their collective heads, attempting to recall a time when a president of the USA could seemingly move markets at will.

Moreover, many analysts, whether they’re technical, fundamental, or advocates of both skill sets, are finding their skills sidelined by the “Trump put” currently dominating the USA equity markets and dollar value. The SPX closed down 0.26%, DJIA down by 0.12%, whilst the dollar index lost 0.1%.

Once again the fundamental economic data published for the USA on Tuesday was mixed and illustrated a further decoupling between reality and hope. For example; annual GDP remained static at 1.9%, missing the forecast consensus of a rise to 2.1%. In previous years annual growth of 1.9% for the globe’s largest economy would have been dismissed as poor and yet in the current rarified atmosphere, the main USA equity indices have seen rises of up to 25% year on year. Other poor data published on Tuesday included the trade balance coming in at -$69.2b, missing expectations of -$66b, rising significantly from the -$64.4b in December.

Personal consumption rose by 3% in the USA during the last quarter of 2016, whilst house prices, according to the Case Shiller index, rose by 5.58%. Perhaps the biggest indicator of the divergence between reality and hope comes in the form of consumer confidence rising to 114.8, from 111.8 previously. Quite where this optimism is being manufactured is a curious question, given that wages (in real terms) are still stuck back in the 1990’s and current wage rises are running just above 1.5% annually.

European economic calendar news was practically non existent on Tuesday, with the exception of the KOF leading indicator published in Switzerland. Although only ranking as a medium impact event, the unexpected rise to 107.2, from 102 in January’s report, may have caused the Swissie to gain versus the majority of its peers during Tuesday’s European and New York sessions. With the Swiss franc only giving up its gains versus the dollar late in the session, USD/CHF ending the day close to 1.0061.

European equity markets enjoyed modest gains throughout the day; STOXX 50 closing up 0.31%, UK’s FTSE up 0.14%, Germany’s DAX up 0.10% and France’s CAC closed up 0.28%. USD/JPY closed up at 113.10. GBP/USD fell by 0.4% on Tuesday to 1.2374. The currency pair was down circa 1.4% for the month of February.

WTI Crude fell by approx. 0.2% to $53.51 a barrel, a significant recovery from a fall below $52 earlier in the day. Gold initially rose, but then sold off later in the day, to end the day close to $1246 per ounce. The metal gained by circa 3% in February.

The relatively quiet day for economic calendar events on Tuesday is followed by an incredibly busy day on Wednesday which begins with Trump’s congress speech, then we have various European PMIs, interest rate decisions etc., ending with the release of the Fed’s beige book.

Economic calendar events for March 1st, all times quoted are London (GMT) time.

02:00, currency effected USD. President Trump Addresses Joint Congress.
08:55, currency effected EUR. Markit/BME Germany Manufacturing PMI. (FEB). The prediction is for the reading to remain static at 57.

08:55, currency effected EUR. German Unemployment Rate s.a.. The prediction is for the rate to remain static, at 5.9%.

09:00, currency effected EUR. Markit Eurozone Manufacturing PMI. There is no change forecast for this reading of 55.5.

09:00, currency effected EUR. Italian Annual Gross Domestic Product (2016). The prediction is for a rise to 1.0% growth, from 0.8% previously.

09:30, currency effected GBP. Markit UK PMI Manufacturing (FEB). The UK’s manufacturing reading is forecast to have shrunk slightly to 55.7, from 55.9 previously.

13:00, currency effected EUR. German Consumer Price Index (YoY). Germany’s key inflation figure is forecast to rise to 2.1%, from 1.9% previously.

13:30, currency effected USD. Personal Income (JAN). Personal income is predicted to have risen by 0.3%.

15:00, currency effected CAD. Bank of Canada Rate Decision (MAR 01). Canada’s central bank is not expected to raise the base rate, from the current 0.50%.

15:00, currency effected USD. ISM Manufacturing. The key manufacturing index for the USA is expected to have risen to 56.2, from 56.0 previously.

15:00, currency effected USD. Construction Spending (JAN). The anticipation is for a rise to 0.6%, from the previous -0.2% reading.

19:00, currency effected USD. U.S. Federal Reserve Releases Beige Book.

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