MORNING ROLL CALL
USA equities stage modest recovery, gold continues its recent bullish run, WTI oil falls on glut of supply news.
In a relatively quiet economic calendar day, USA data releases, concerning the domestic housing and mortgage markets and USA oil inventories, dominated the financial landscape on Wednesday. Mortgage applications fell by -2.7%, from the previous reading of 3.1%. Whilst the house price index for January was flat at 0.00%, falling from a previous 0.4% rise and missing expectations of a 0.4% rise. Existing home sales fell and missed expectations, falling by -3.7% in February. With the current average 30 year mortgage rate being 4.46%, wage rises stagnant and house prices in many key USA cities being out of the reach of median level paid workers, many analysts are forecasting a slump in house sales and values (in the short to medium term), due to affordability issues.
WTI oil continued its recent prolonged price slump, as data revealed that USA crude oil inventories came in at 4.954m barrels, versus forecasts of 2.801m, some distance ahead of the previous reading of -0.237m. The effect of the stockpile build up data was immediate, with the price of oil plunging to $46.50 per barrel, to then stage a modest recovery to end the day at circa $47.64 a barrel. The $46.50 price was a level not witnessed since shortly after the OPEC supply intervention agreement took effect in December. Gold continued its recent bullish trend, closing the day at circa $1247 per ounce, at one stage reaching $1252, representing the highest price witnessed since the beginning of the month.
The SPX closed up 0.19%, the NASDAQ closed up 0.48%, whilst the DJIA closed down by a marginal 0.03%. In Europe the main markets sold off, most had registered losses before the terrorist incident occurred in London at approx. 2:30pm. Euro STOXX 50 closed down 0.26%, UK’s FTSE down 0.73%, DAX down 0.48% and France’s CAC down 0.15%. On Wednesday, the dollar index, which measures the U.S. dollar versus a basket of its six major peer currencies, was down 0.12% at 99.70, after reaching a near seven-week low of 99.547.
GBP/USD ended the day down by circa 0.1% at 1.2472, whilst sterling remained flat at the close of the day, versus the majority of its peers. USD/JPY recovered its early session losses to end the day at circa 111.36, at one point falling to a four month low of 110.75. EUR/USD ended the day close to flat, at 1.0790.
Economic calendar releases for March 23rd, all times quoted are London (GMT) time.
07:00, currency impacted EUR. German GfK Consumer Confidence Survey (APR). This critical survey, on the health of the Eurozone’s largest economy, is expected to reveal no change on the figure of 10.
09:00, currency impacted EUR. ECB Publishes Economic Bulletin. The bulletin sets out the vision the ECB has for the short to medium term for the Eurozone economy. Investors will be observing the content for any signs of a change in policy; away from negative interest rates and asset purchase programmes.
09:30, currency impacted GBP. Retail Sales (YoY). Retail is an incredibly valuable sector for the UK’s economy. There are tentative signs that consumers are beginning to feel stretched, due to rising inflation and stagnant wage rises. Therefore and despite predictions of 3.20% growth year on year, this release does have the ability to surprise, from the previous reading of 2.60%. Any significant miss could effect sterling’s value.
12:00, currency impacted USD. Fed’s Yellen Speaks at Community Development Conference. Any appearance by Janet Yellen is destined to feature as a high impact news event, given the Fed’s interchanging hawkish/doveish stance changes on a regular basis.
12:30, currency impacted USD. Initial Jobless Claims (MAR 18). Weekly claims are forecast to remain similar at 240k, versus the previous reading of 241k.
14:00, currency impacted USD. New Home Sales (MoM) (FEB). New home sales growth is predicted to have contracted to 2.0% growth, from 3.7% in January.
15:00, currency impacted EUR. Euro-Zone Consumer Confidence (MAR). Confidence levels are forecast to have improved to -5.8, from a -6.2 reading in February.
