WEEKLY MARKET SNAPSHOT 26/2 – 2/3| A week of GDP figures for Canada, the USA, France and Italy, may indicate the strength of western global growth, whilst various CPIs will reveal the level of inflationary pressures

Feb 23 • Is The Trend Still Your Friend • 1870 Views • No Comments

North America’s GDPs will come into sharp focus during the week, Canada is currently producing excellent growth figures and at 3.5% growth, the Canadian economy is top of the growth charts, for the Western Hemisphere. The USA is currently printing GDP growth of 2.6% and economists are forecasting that both countries’ figures will be maintained, or improved upon. Any fall could see the price of the respective domestic dollars come under pressure.

The various ISM readings for the USA economy will indicate the strength underpinning the supposed economic strength the FOMC referred to, in their minutes published on Wednesday Feb. 21st. Various income and expenditure readings will be revealed by the BLS for the USA economy, whilst the Conference Board and university of Michigan consumer confidence readings, will also indicate the level of optimism amongst the U.S. population.

Europe’s high impact releases includes: Swiss, French and Italian GDP, and the CPI readings for Germany and the Eurozone. Analysts and investors will be looking towards consistent figures across the board, to provide proof of the single currency bloc’s continued economic improvement.

Monday starts with the results of Japan’s outright bond purchases, watched carefully in relation to the value of yen, also from Japan we receive the latest leading indicator and coincident data. Once European markets are opened the latest Swiss banking deposits data is published, the U.K. BoE’s latest figures on mortgages for home purchases is monitored closely for signs that consumers are reaching their peak ability and confidence, to take on loans of ever increasing amounts.

As attention shifts to the USA, new home sales data is forecast to rebound, after a seasonal slump. The Dallas and Chicago Feds will provide their latest activity readings, whilst the Fed’s Bullard will deliver a speech on monetary policy. The USA treasury will sell treasury bills of 3 and 6 months, a hot topic given the approx $260 billion sold during the week ending Friday 23rd Feb. New Zealand data is on the radar in late evening; exports, imports, trade balance (monthly and yearly metrics), could effect the value of the kiwi (NZD) if the figures miss, or beat forecasts.

On Tuesday German retail sales are the precursor of a raft of soft sentiment data metrics from the Eurozone including: consumer, industrial, services and economic confidence. German CPI is forecast to come in close to the current level of CPI at 1.6%, Bundesbank’s Weidmann will deliver a speech, on the performance of the German central bank. Once U.S. markets are open a raft of data, including: the advanced and durable goods orders, wholesale and retail inventories, will give an indication of consumer and business confidence. As will the Conference Board consumer confidence reading, forecast to rise by a 0.5 increment to 126. The Case Shiller house price reading for the twenty main cities in the USA and nationwide will be revealed, currently at 6.21% nationally, the figure will be watched carefully, for any signs of economic structural weakness.

Japan is back in focus late Tuesday evening, as retail sales figures are published, the industrial production figures will be closely monitored, for signs that Japan’s industrial heartlands are still performing.

Wednesday begins with the release of the latest Nationwide house price index for the U.K., forecast to remain close to the 3.2% YoY published in January. Consumer confidence, business confidence and the Lloyds business barometer readings, may deliver an insight into the overall state of sentiment in the U.K. Three PMIs for China are released, although unless they miss or beat forecast by some distance, Chinese data is currently having little impact on FX markets globally.

As European markets open, France’s GDP will come under scrutiny, currently at 2.4% the maintenance of this growth level will be anticipated. Germany’s unemployment level should remain at the 5.3% recorded for January, whilst the CPI figure for the Eurozone is forecast to remain at 1.3% YoY.

Economic calendar news for the USA concentrates mainly on the latest GDP figures, annualised QoQ the reading is forecast to remain at the 2.6% reading recorded for Q3. Pending home sales data for America will also be published, following the Case Shiller house price index published on the previous day, analysts will be able to develop an overview of the state of the USA housing market. Jerome Powell, the newly installed Fed chair, will testify in front of the House financial services committee and as his first major solo appearance, this performance is eagerly anticipated.

Thursday witnesses data from Japan released in the Asian session; official reserves, vehicle sales, manufacturing PMI and consumer confidence, whilst a BOJ official Mr. Kataoka will deliver a speech. The GDP figures for the Swiss economy will be published, currently at 1.2% YoY the prediction is for growth to be maintained at this level. Retail sales and the manufacturing PMI are the final metrics for the Swiss economy released on the day. Manufacturing PMIs for: France, Italy, Germany and the wider Eurozone will deliver an indication of the foundations upon which the recent manufacturing boost is built on. The U.K. manufacturing PMI will also be released, its base hasn’t performed as well as its European peers.

The U.K. stats agency the ONS will reveal the up to date levels of consumer credit, whilst mortgage lending and money supply data will also be delivered. From the Eurozone we’ll receive the latest data on Italy’s GDP, forecast to remain close to the current 0.9% YoY figure. The unemployment level for the single bloc zone is predicted to remain at 8.7% for January.

It’s an extremely busy afternoon for USA data; personal income and expenditure, jobless claims, construction spending, the Markit PMI for manufacturing, the ISM readings for manufacturing, employment, orders and prices paid.

In the evening New Zealand comes into focus; with consumer confidence and building permits data being released. Japan will deliver a cluster of data including: jobless rate (currently at 2.8%), overall household income and CPI. Inflation is forecast to rise to 1.5% from 1.3%, which may cause interest in yen, if FX traders translate the result as bullish for the yen, based on the BOJ becoming hawkish in relation to their monetary policy.

Friday begins the day’s calendar events with Italian QoQ and YoY GDP data, currently at 1.6% YoY this figure is forecast to remain unchanged. The U.K. construction PMI will be closely watched at 50.2 in January as it’s only just above the 50 level, below which an industry (or sector) is considered to be in recession.

North American data begins with Canada’s latest GDP figure, month on month last month’s figure was 0.4% and the current YoY figure is 3.5% for December. The traditional and highly respected monthly University of Michigan data series of sentiment readings are released, at 99.9 for January this reading is closely watched by analysts, given the legacy it has developed over decades.

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