Monday, January 23, 2017

Weekly Report

Market analysis

Highlights:

  • EUR/USD : Relinquishes last week's gains and returns lower
  • USD/JPY GBP/USD: Slides to nadir low ahead of hard Brexit: Rebounded after last week falling
  • USD/CAD : The Canadian pares losses but remains at 3-month trough
  • Gold : Hovers near five-week high
  • Crude Oil : Falls on China concerns and on output cut uncertainties

EUR/USD

Relinquishes last week's gains and returns lower
Euro edged lower against the U.S. dollar on Monday amid the reports that show the British government is prepared to make a "hard" exit from the European Union. Last week, euro pushed higher against the U.S. dollar in late trade on Friday, after touching an intra-day low following the U.S. retail sales report. Euro edged lower against the U.S. dollar on Thursday, after hitting a five-week high , as the dollar gave up ground, while the European Central Bank's meeting minutes offered some support by showcasing the increased policymaker's interest in inflation rates. The ECB's last meeting minutes showed interest in inflation rates a rise in energy prices after global production levels are reduced. Industries across the euro zone cranked up output in November and Germany ended the year with its strongest growth in five years, Euro bounced sharply against the U.S. dollar, after President-elect Donald Trump's widely-awaited news briefing provided little clarity on future fiscal policies, disappointing bulls wagering on major stimulus. Euro edged lower against the U.S. dollar after brushing a 10-day high in early trading on Tuesdays, as demand for the greenback regained traction ahead of the President-elect Donald Trump's first news conference later during the day. On the other hand, French presidential candidate Emmanuel Macron said that the euro may not exist in 10 years' time if Paris and Berlin fail to bolster the single currency union. Euro is still unsettled amid a lack of direction in the markets, with expectations pointing to a stronger dollar as U.S. President-elect starts his stimulus plan, on the other hand; the Federal Reserve increased interest rates in December, while hinting at three more hikes in 2017, which slashed demand on the euro and other main currencies due to the policy gap with the European Central Bank.
Looking ahead to the coming week, The ECB is to announce its latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.
EUR/USD

GBP/USD

Slides to nadir low ahead of hard Brexit
Sterling dived to three-month lows, after media reports that the British government is prepared to make a "hard" exit from the European Union rekindled investors' fears about the impact of the impending move. Prime Minister Theresa May where she is expected to announce a hard exit from the European Union, while U.K. Bank of England Governor Mark Carney is due to speak later during the day. Last week, Sterling edged higher against the U.S. dollar on Friday but remained under pressure ahead of Prime Minister Theresa May speech. While pound wavered on Thursday after hitting the highest level last week, after a spokeswoman said British Prime Minister Theresa May will give a speech this week on her plans for leaving the European Union, while Sterling rose sharply against the U.S. dollar on Thursday ahead of weak dollar as Trump has provided no clues on future fiscal policies. Earlier, the pound extended early losses on Wednesday after mixed report from U.K. Earlier Wednesday, the U.K. Office for National Statistics said manufacturing production increased 1.3% in November, surpassing expectations for a gain of 0.5% and following a decline of 1.0% a month earlier. A separate report from the ONS showed that the U.K.'s goods trade deficit with the rest of the world widened to £12.16 billion in November. Bank of England Governor Mark Carney said on Wednesday that Britain's giant financial services sector could be damaged if key parts of the industry move elsewhere because of Brexit.
GBP/USD

USD/JPY

Rebounded after last week falling
The dollar dipped against the Japanese yen on Monday, as markets were mixed by comments from President-elect Donald Trump on remarks aimed multiple topics from nuclear weapons to Brexit. While Japan's core machinery orders fell in November at the fastest pace in seven months by 5.1% in November from the previous month. Last week, the U.S. dollar fell against the other major currencies as optimism cooled over President-elect Donald Trump’s economic policy proposals, The dollar trimmed losses but remained broadly under pressure against the Japanese yen, as U.S. political uncertainty dominated markets. The yen gained on Thursday as the first formal press conference for Donald Trump since winning the election was seen as short on economic policy details and instead turned into a freewheeling battle with the press on the Russian election hacking claims that led to a sharp sell-off in the dollar. In Japan, the adjusted current account came in at a surplus of ¥1.80 trillion, wider than the ¥1.48 trillion surplus seen. Overnight, the U.S. dollar continued to be underpinned by expectations for higher interest rates this year.
USD/JPY

USD/CAD

The Canadian pares losses but remains at 3-month trough
The Canadian dollar edged lower against its U.S. counterpart on Monday, pressured lower by falling prices for oil, a major Canadian export. Demand for the greenback continued to be underpinned after Friday’s U.S. nonfarm payrolls report for December, which showed a slowdown in hiring but the fastest wage growth in over seven years, supported the case for rate hikes this year. On Tuesday the Canadian dollar edged higher against its U.S. counterpart, helped by steadier prices for oil, a major Canadian export and an increase in domestic housing starts. The Lonnie found support as oil prices pushed higher after a sharp selloff triggered by doubts over whether an agreement between major producers to cut output in a bid to reduce a global supply glut will be effective. On Wednesday the Canadian dollar edged higher against its U.S. counterpart, as investors eyed highly-anticipated remarks by U.S. President elect Donald Trump was scheduled to speak at his press conference since winning the U.S. presidential election in November. Later on Wednesday the U.S. dollar was still under broad selling pressure since Donald Trump failed to offer details on his promises to boost fiscal spending and cut taxes at a highly-anticipated news conference. On Thursday the U.S. dollar pared losses against its Canadian counterpart, helped by the release of a positive U.S. jobless claims report, but the greenback was still hovering at a three-month low as rising oil prices supported the commodity-related Canadian currency. On Friday The U.S. dollar was almost unchanged against its Canadian counterpart, after mixed U.S. data and amid ongoing uncertainty over the Trump administration’s future policy moves, as a decline in oil prices limited the Canadian dollar’s gains.
USD/CAD

Gold

Hovers near five-week high
Gold rose continued by safe-haven demand due to uncertainty over U.S. policy ahead of President-elect Donald Trump's inauguration and amid concerns over Britain's exit from the European Union. Last week, gold ended lower on Friday as investors took profits after prices hit a seven-week peak in the previous session, but still notched up a third consecutive weekly gain. gold prices rallied to a seven-week high, as the U.S. dollar sank after President-elect Donald Trump's highly-anticipated press conference failed to offer details on his plans to boost fiscal spending and cut taxes. The U.S. Department of Labor said initial jobless claims in the week ending January 7 increased by 10,000 to 247,000 from the previous week’s total of 237,000 which was revised from an initial reading of 235,000.Gold edged higher early on Thursday to hold near 7-week highs touched, as the dollar weakened after Donald Trump provided little clarity on future fiscal policies in his first press conference as U.S. president-elect. Gold rose to a six-week peak on Tuesday, supported by earlier weakness in the dollar ahead of a news conference by U.S. President-elect Donald Trump. Meanwhile, US Census Bureau said that U.S. Wholesale Inventories rose to a seasonally adjusted annual rate of 1.0%, from 0.9% in the preceding quarter. Gold prices rose on Tuesday on second day in raw near to five-week high, amid of increasing demand for safe haven in the financial markets as well as decline in dollar levels, also Gold's rise comes as commodities kept recovering in the markets after the New Year holiday, which helped the precious metal recover some past losses,
In the week ahead The U.S. is to publish figures on inflation and industrial production. Later in the day, Fed Chair Janet Yellen is to speak at, The U.S. is to release a series of reports, including data on building permits, housing starts, and initial jobless claims and manufacturing activity in the Philadelphia region.
GOLD

Crude Oil

Falls on China concerns and on output cut uncertainties
Oil fell more than 2 percent on Monday as signs of growing U.S. production outweighed optimism that many other producers, including Russia, were sticking to a deal to cut supplies in a bid to bolster the market. On Tuesday Oil prices were modestly higher, rebounding from the prior session's sharp losses as market players looked ahead to weekly data from the U.S. on stockpiles of crude and refined products. Industry group the American Petroleum Institute is due to release its weekly report Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock rise of 620,000 barrels. On Wednesday Oil prices rose by the most in over a month, boosted as the U.S. dollar weakened following a news conference by U.S. President-elect Donald Trump, and on news that Saudi Arabia had cut exports to Asia. On Thursday Oil prices raised more than $1 a barrel on reports key OPEC members were starting to cut production as promised and on forecasts of strong demand growth in China. Saudi Arabia has cut oil output to its lowest in almost two years, its energy minister said on Thursday, as the world's largest oil exporter leads OPEC's drive to eradicate a global glut and prop up prices. Oil prices fell on Friday and were on track to end the week lower on lingering doubts over the extent of OPEC cuts, with sentiment worsened by concerns over the economic health of the world's second-largest oil consumer China after it reported the steepest falls in overall exports since 2009.
In the week ahead, market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.
CL

MAJOR DATA RELEASED DURING LAST WEEK

EventActualPrevious
AUDBuilding Approvals m/m7.00%-11.80%
GBPHalifax HPI m/m1.70%0.60%
CADBOC Business Outlook Survey
AUDRetail Sales m/m0.20%0.50%
CNYCPI y/y2.10%2.30%
CNYPPI y/y5.50%3.30%
CADBuilding Permits m/m-0.10%10.50%
USDJOLTS Job Openings5.52M5.45M
GBPManufacturing Production m/m1.30%-1.00%
GBPGoods Trade Balance-12.2B-9.9B
GBPBOE Gov Carney Speaks
USDCrude Oil Inventories4.1M-7.1M
USDPresident-Elect Trump Speaks
USDFOMC Member Dudley Speaks
EURECB Monetary Policy Meeting Accounts
CADNHPI m/m0.20%0.40%
USDUnemployment Claims247K237K
USDFOMC Member Evans Speaks
USDFOMC Member Harker Speaks
USDImport Prices m/m0.40%-0.20%
USDFed Chair Yellen Speaks
CNYTrade Balance275B298B
GBPBOE Credit Conditions Survey
GBPMPC Member Saunders Speaks
USDCore Retail Sales m/m0.20%0.30%
USDPPI m/m0.30%0.40%
USDRetail Sales m/m0.60%0.20%
USDCore PPI m/m0.20%0.40%
USDFOMC Member Harker Speaks
USDPrelim UoM Consumer Sentiment98.198.2

MAJOR DATA COMING OUT THIS WEEK (Time zone GMT)

DateTimeEventForecastPrevious
1/16/2017 6:30pmGBPBOE Gov Carney Speaks
1/16/20179:00pmNZDNZIER Business Confidence26
1/17/2017Day 1ALLWEF Annual Meetings
1/17/20179:30amGBPCPI y/y0.0140.012
1/17/20179:30amGBPPPI Input m/m0.022-0.011
1/17/20179:30amGBPRPI y/y0.0230.022
1/17/201710:00amEURGerman ZEW Economic Sentiment18.913.8
1/17/20171:30pmUSDEmpire State Manufacturing Index8.19
1/17/20171:45pmUSDFOMC Member Dudley Speaks
1/17/2017TentativeNZDGDT Price Index-0.039
1/17/2017TentativeGBPPrime Minister May Speaks
1/17/20173:00pmUSDFOMC Member Brainard Speaks
1/17/20173:00pmUSDTreasury Sec Lew Speaks
1/18/2017Day 2ALLWEF Annual Meetings
1/18/20179:30amGBPAverage Earnings Index 3m/y0.0260.025
1/18/20179:30amGBPClaimant Count Change4.6K2.4K
1/18/20179:30amGBPUnemployment Rate0.0480.048
1/18/201710:00amEURFinal CPI y/y0.0110.011
1/18/20171:30pmUSDCPI m/m0.0030.002
1/18/20171:30pmUSDCore CPI m/m0.0020.002
1/18/20172:15pmUSDCapacity Utilization Rate0.7560.75
1/18/20172:15pmUSDIndustrial Production m/m0.008-0.004
1/18/20173:00pmCADBOC Monetary Policy Report
1/18/20173:00pmCADBOC Rate Statement
1/18/20173:00pmCADOvernight Rate0.0050.005
1/18/20174:00pmUSDFOMC Member Kashkari Speaks
1/18/20174:15pmCADBOC Press Conference
1/18/20178:00pmUSDFed Chair Yellen Speaks
1/19/201712:30amAUDEmployment Change10.2K39.1K
1/19/201712:30amAUDUnemployment Rate0.0570.057
1/19/20178:15amCHFPPI m/m0.0020.001
1/19/2017Day 3ALLWEF Annual Meetings
1/19/201712:45pmEURMinimum Bid Rate00
1/19/20171:30pmCADManufacturing Sales m/m0.002-0.008
1/19/20171:30pmCADForeign Securities Purchases10.23B15.75B
1/19/20171:30pmEURECB Press Conference
1/19/20171:30pmUSDBuilding Permits1.22M1.20M
1/19/20171:30pmUSDPhilly Fed Manufacturing Index16.321.5
1/19/20171:30pmUSDUnemployment Claims252K247K
1/19/20171:30pmUSDHousing Starts1.19M1.09M
1/19/20174:00pmUSDCrude Oil Inventories4.1M
1/20/20171:00amUSDFed Chair Yellen Speaks
1/20/20172:00amCNYGDP q/y0.0670.067
1/20/20172:00amCNYIndustrial Production y/y0.0610.062
1/20/20172:00amCNYFixed Asset Investment ytd/y0.0830.083
1/20/20172:00amCNYNBS Press Conference
1/20/2017Day 4ALLWEF Annual Meetings
1/20/20179:30amGBPRetail Sales m/m-0.0010.002
1/20/20171:30pmCADCPI m/m-0.004
1/20/20171:30pmCADCore Retail Sales m/m0.014
1/20/20171:30pmCADRetail Sales m/m0.011
1/20/20172:00pmUSDFOMC Member Harker Speaks

Disclaimer

√ Moving Average Convergence/Divergence (MACD) : MACD uses different exponential moving averages to generate buy and sell indicators. The lower pane of the chart shows two lines: a Differential Line and a Signal Line. The Differential Line is the difference between a short and long-period exponential moving average, typically 12 and 26 periods. The Signal Line is typically a 9-period exponential moving average. When the DL crosses the SL from above, a sell indicator is generated, and when it crosses from below a buy signal is generated.
√ Relative Strength Index (RSI): This is a momentum indicator that measures a security\'s price in relation to itself. The lower pane of the chart shows a line that fluctuates on a scale of 0 to 100. Typically buy signals are generated at 30 and sell signals are generated at 70. If the line breaks 30, the security is oversold, and a reversal is imminent. If the line breaks 70, it is overbought and is due for a downward correction.
This report is provided by our experts in the research group for information purposes only and is deemed reliable but provides no guarantee as to its accuracy or completeness. Trust Capital S.A.L. will not be accountable for any decision based on the contents of this report. This document is not and should not be construed as an offer to sell or solicitation of an offer to purchase or subscribe for any investment or service. Trust Capital S.A.L. has based this document on information obtained from sources it believes to be reliable but which it has not been independently verified. Trust Capital S.A.L. makes no guarantees, representations or warranties and accept no responsibility or liability as to its accuracy or completeness. Expressions of opinion herein are subject to change without notice.

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