MORNING ROLL CALL

Apr 7 • Morning Roll Call • 112 Views • No Comments

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European Markit PMIs miss forecasts, USA equity markets rise tentatively as Trump issues threats, U.S. dollar recovers, whilst euro sells off versus most peersbetween-the-lines1

Politics dominated the economic calendar landscape on Thursday, with the key figures of Trump and Draghi taking centre stage. Moving on from the frustrations of not being likely to undertake reforms such as: immigration, taxation and affordable health care, Trump turned his attention to threatening Syria and the visit of the Chinese premier to Washington. Presumably the inflammatory rhetoric, delivered during his election campaign versus China, won’t have been repeated face to face.

Despite flagging up as a high impact news event, these diplomatic meetings rarely provide definitive outcomes and this two day visit is unlikely to deliver any commercial framework. One notable economic calendar publication, delivered immediately prior to the Chinese delegation’s visit, came in the form of the Chinese Caixan composite and services PMIs, both missing forecasts.

Mario Draghi held court in Frankfurt on Thursday, during which he appeared to adopt a fairly ‘dovish’ tone in relation to tapering the current QE programme (asset purchase scheme), whilst failing to deliver any timetable, in relation to potentially raising interest rates from their current record lows. The effect on the value of the euro throughout the day was immediate; EUR/USD ended the day down at circa 1.06, EUR/GBP down to 0.853, EUR/JPY ending the day at circa 117.96.

Moving on from the political speeches and meetings of minds, Thursday was a relatively quiet day for medium to high impact news event and uneventful in terms of equity markets and FX market activity. However, Friday is an extremely busy schedule for calendar events, therefore traders need to remain vigilant throughout the day’s trading sessions.

A raft of Eurozone PMIs missed forecasts on Thursday, with the exception of annual German factory orders, which came in at 4.6%, ahead of the expectation of 3.9%. The various European retail PMIs missed forecasts, the Eurozone composite retail printing at 49.5, down from 49.9 previously registered in Feb.

In the USA the weekly unemployment claims beat the forecast of economists polled by Reuters and Bloomberg, coming in at 234k, versus expectations of 250k. Continuing claims also improved. This data, combined with the bullish ADP data published on Wednesday, suggests the NFP data published today (Friday), could beat forecasts of 180k jobs created in March.

Economic calendar events for April 7th, all times quoted are London (GMT) time

05:00, currency impacted JPY. Leading Index (FEB P). This composite index of several other economic metrics is expected to fall to 104.6, from 104.9 previously.

06:00, currency impacted EUR. German Industrial Production n.s.a. and w.d.a. (YoY) (FEB). An improved reading of 0.5%, from the figure of 0.0% registered in January, is forecast.

06:00, currency impacted EUR. German Exports s.a. (MoM) (FEB). Exports are anticipated to have fallen to -0.5%, from 2.6% in Jan.

06:00, currency impacted EUR. German Imports s.a. (MoM) (FEB). Imports are forecast to have fallen to 0.2%, from 2.8% in Jan.

08:30, currency impacted GBP. Industrial Production (YoY) (FEB). The forecast is for a rise to 3.7%, from 3.2% in Jan.

08:30, currency impacted GBP. Manufacturing Production (YoY) (FEB). The forecast is for a rise to 3.9%, from 2.7% in Jan.

08:30, currency impacted GBP. Construction Output SA (YoY) (FEB). The forecast is for a fall to 1.9%, from 2.0% previously.

08:30, currency impacted GBP. Total Trade Balance (Pounds) (FEB). The prediction is for a deterioration of the UK’s trade balance to -£2,200, from -£1,966 previously.

09:00, currency impacted GBP. BOE Governor Mark Carney Speaks in London. The UK’s BoE governor has plenty subject matter to cover; potential base rate rises, inflation and Brexit being three of the most outstanding issues.

12:30, currency impacted CAD. Unemployment Rate (MAR). Unemployment may have moved up a tick to 6.7%, from a reading of 6.6% in Feb.

12:30, currency impacted USD. Change in Non-farm Payrolls (MAR). The expectation is for a reading of 180k, from the 235k jobs created in Feb. However, given the bullish jobs data already delivered this week, many analysis believe this NFP forecast could be beaten by some margin.

12:30, currency impacted USD. Unemployment Rate (MAR). USA unemployment is exported to remain unchanged at 4.7%.

12:30, currency impacted USD Labor Force Participation Rate (MAR). The participation rate is not expected to change, from the previous reading of 63.0.

14:00, currency impacted USD. Wholesale Inventories (FEB). The forecast is no change from the 0.4% reading published in Jan.

19:00, currency impacted USD. Consumer Credit (FEB). The anticipation is that USA consumers will have indulged in their optimism, highlighted by the various soft data sentiment reports and as a consequence consumers are expected to have taken on considerably more credit in Feb. Up $15.000b, from a $8.794b rise in Jan.

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