News and Media

WEEKLY MARKET RECAP, WEEK AHEAD, AND SCHEDULE
Mandus Invest SA. | 03, February, 2008 / Sunday

The euro appreciated vis-a-vis the U.S. dollar last week as the single currency tested offers around the $1.4950 level and was supported around the $1.4660 level. The pair gained about 120 pips last week. The FOMC reduced the federal funds target rate by 50bps to 3.00% and lowered the discount rate by 50bps. The Fed reported the housing contraction is worsening and said financial markets are under stress. Dallas Fed’s Fisher dissented and voted for no change in rates. U.S. Treasury Secretary Paulson verbally intervened to support the U.S. dollar. S&P downgraded or put on downgrade review more than US$ 500 billion in sub-prime bonds and CDOs.

Data released in the U.S. last week saw December building permits were off 7.1% m/m; December new home sales were off 4.7%; December headline durable goods orders increased 5.2% with the ex-transportation component up 2.6% and the non-defense capital goods orders ex-aircraft component up 4.4%; January consumer confidence printed at 87.9; Q4 GDP printed at an annualized 0.6%; ADP January private sector job growth printed at 130,000; core PCE inflation jumped to 2.7% with the headline up at 3.9%; December personal income was up +0.5%; December personal spending was up +0.2%; weekly initial jobless claims were off 69,000 to 375,000; the Q4 ECI was up +0.8%; December core PCE were unchanged at +0.2% m/m and +2.2% y/y with a headline +3.5% print; January non-farm payrolls fell 17,000; January unemployment printed at 4.9% and average hourly earnings were up 0.2% m/m and +3.7% y/y; November and December NFPs were revised -55,000 and +64,000, respectively; the January ISM manufacturing index printed at 50.7 with the prices paid sub-index jumped to 76.0; and the final University of Michigan consumer sentiment index fell to 78.4 from 80.5.

Data released in the eurozone last week saw the December M3 money supply expanded 11.5% y/y; the EMU-13 November current account surplus fell to €700 million from €3.1 billion in October; German 2007 plant and machinery production rose 11%; the EMU-15 consumer confidence survey fell to -12; EMU-15 CPI was up 3.2%; December retail sales fell 0.1%; EMU-13 December unemployment was unchanged at 7.2%; and EMU-15 January manufacturing PMI improved to 52.8.

Last week’s high (1) was above the 76.4% retracement of the 1.4967-1.4309 range and last week’s low (2) was above the 50.0% retracement of the same range. The 1.4813/ 1.4908/ 1.4967/ 1.5030/ 1.5120 levels represent upside resistance targets while the 1.4720/ 1.4560/ 1.4404/ 1.4378/ 1.4239 levels represent downside support targets.

CNY

The yen appreciated vis-a-vis the U.S. dollar last week as the greenback tested bids around the Y105.70 level and was capped around the Y107.45 level. The pair lost about 25 pips last week. The Nikkei 225 stock index lost 0.70% to close at Y13,497.16. BoJ’s Nishimura hinted the BoJ mat consider “taking flexible action.”
Data released in Japan this week saw the December corporate services price index climb 1.4% y/y; the December unemployment rate was unchanged at 3.8%; December retail sales rose 0.2% y/y; December household spending was up 2.2% y/y; December industrial output was up 1.4% m/m and 0.7% y/y; December construction orders were up +4.7% y/y; and December housing starts were off 19.2% y/y.

The Chinese yuan appreciated vis-a-vis the U.S. dollar last week as the greenback closed at CNY 7.1890 in the over-the-counter market, down from CNY 7.2102. The Chinese government is eyeing GDP growth of 8% this year. PBoC’s Gang intimated China may continue to impose more tighten monetary policy further.
Data released in China last week saw Q4 property prices were up 10.2% y/y in 70 major cities; January CPI jumped 6.5% y/y; and January CLSA PMI fell to 53.2 from 53.3

Last week’s high (1) was just above the 23.6% retracement of the 114.65-104.96 range and last week’s low (2) was below the 23.6% retracement of the same range. Upside resistance targets remain the 107.25/ 108.66/ 109.80/ 110.04/ 111/80/ 112.89 levels while downside support targets remain the 104.19/ 101.67/ 101.20/ 98.65 levels.

£

The British pound depreciated vis-a-vis the U.S. dollar last week as cable tested bids around the US$ 1.9645 level and was capped around the $1.9955 level. The pair lost about 180 pips last week. BoE’s Blanchflower said “Worrying about inflation at this time seems like fiddling while Rome burns” and said the housing and commercial paper market are calling for rate cuts. King and Sentance were reappointed to the MPC.

Data released in the U.K. last week saw Hometrack January house prices fall 0.3% m/m; the CBI January distributive trades survey saw higher sales in H1 January; December Land Registry house prices in England and Wales were off 0.4% m/m; December total consumer lending expanded £9.1 billion; December mortgage approvals fell to 73,000; the government’s inflation expectations index jumped to 3.3%; Nationwide property prices fell 0.1% m/m in January; the GfK January consumer confidence barometer printed at -13; and the January CIPS manufacturing survey fell to 50.6 from 52.9 in December with the output prices sub-index spiked to 57.9.

Last week’s high (1) was just above the 61.8% retracement of the 1.9182-2.1159 range and last week’s low (2) was right at the 76.4% retracement of the same range. Upside resistance targets include the 1.9767/ 1.9837/ 1.9937/ 2.0033/ 2.0149 levels while downside support targets include the 1.9624/ 1.9588/ 1.9336/ 1.9262/ 1.9182/ 1.9103/ 1.8618 levels.

CHF

The Swiss franc appreciated vis-a-vis the U.S. dollar last week as the greenback tested bids around the CHF 1.0720 level and was capped around the CHF 1.0965 level. The pair lost about 75 pips last week. The Swiss government affirmed its 2008 GDP growth forecast of 1.9%. SNB’s Jordan said financial market volatility doesn’t warrant a rate cut at this time and sees inflation moving above 2.0% in H1 2008 before slowing.

Data released in Switzerland last week saw the December private consumption indicator unchanged at 2.2; the December trade surplus narrowed to CHF 198.1 million from CHF 482.7 million; the January KOF economic barometer fell to 1.70; and January PMI improved to 61.6 from 60.8 in December.

Last week’s high (1) was above the 23.6% retracement of the 1.1594-1.0728 range and last week’s low (2) was below the 23.6% retracement of the same range. Upside resistance targets include the 1.0932/ 1.1052/ 1.1125/ 1.1215/ 1.1304/ 1.1415/ 1.1594 levels while downside support targets include the 1.0740/ 1.0629/ 1.0532 levels.

CAD

The Canadian dollar appreciated vis-a-vis the U.S. dollar last week as the greenback tested bids around the C$ 0.9915 level and was capped around the C$ 1.0115 level. The pair lost about 130 pips last week. BoC’s Jenkins said Canada is weathering the stronger loonie.

Data released in Canada last week saw November GDP increase 0.1%; the December industrial product price index was up 1.1% m/m; and the December raw materials price index was up 0.2%.

Last week’s high (1) was just above the 23.6% retracement of the 0.9063-1.0386 range and last week’s low (2) was just above the 38.2% retracement of the same range. Upside resistance targets include the 1.0074/ 1.0174/ 1.0462/ 1.0794/ 1.1204 levels while downside support targets include the 0.9881/ 0.9747/ 0.9482/ 0.9300 levels.

AUD

The Australian dollar appreciated vis-a-vis the U.S. dollar last week as the Aussie tested offers around the US$ 0.9045 level and was supported around the US$ 0.8765 level. The pair gained about 245 pips last week. Most traders expect RBA to tighten monetary policy further.

Data released in Australia last week the December NAB business confidence index fall to 5.0 from 6.0 in December; the January skilled vacancies index improved +1.1%; December new home sales fell 1.3%; December private sector credit was up 1.1% m/m and 16.5% y/y; and January PMI fell to 49.2 from 57.6 in December.

Last week’s high (1) was just below the 61.8% retracement of the 0.9399-0.8511 range and last week’s low (2) was above the 23.6% retracement of the same range. Upside resistance targets include the 0.9060/ 0.9114/ 0.9223/ 0.9340/ 0.9420 levels while downside support targets include the 0.8955/ 0.8851/ 0.8740/ 0.8549/ 0.8332 levels.

SCHEDULE

Sunday, 3 February 2008
all times GMT
(last release in parentheses)

2330 Australia January TD securities inflation (0.6% m/m)
2330 Australia January TD securities inflation (3.7% y/y)
2350 Japan January monetary base (0.4% y/y)

Monday, 4 February 2008
all times GMT
(last release in parentheses)

N/A UK January Halifax house prices (1.3% m/m)
0030 Australia December trade balance (-A$ 2.245 billion)
0030 Australia Q4 house price index (3.5% q/q)
0030 Australia Q4 house price index (10.6% y/y)
0930 Eurozone February investor confidence (8.2)
0930 UK January PMI, construction (56.0)
1000 Eurozone December producer price index (0.8% m/m)
1000 Eurozone December producer price index (4.1% y/y)
1230 US January Challenger job cuts (-18.7% y/y)
1500 US December factory orders (1.5%)
1700 US Fed Governor Kroszner speaks
2145 NZ Q4 private sector wages (0.9% q/q)
2145 NZ Q4 average hourly earnings (1.3% q/q)

Tuesday, 5 February 2008
all times GMT
(last release in parentheses)

0030 Australia December retail sales (0.8%)
0030 Australia December retail sales, ex-inflation (1.9% q/q)
0030 Australia December building approvals (8.9% m/m)
0030 Australia December building approvals (14.6% y/y)
0200 NZ January ANZ commodity prices (0.8%)
0330 Australia February RBA cash rate target
0855 Germany January PMI, services (51.2)
0900 Eurozone January PMI, services (52.0)
0930 UK January PMI, services (52.4)
1000 Eurozone December retail sales (-1.4% y/y)
1000 Italy January CPI, harmonized (0.3% m/m)
1000 Italy January CPI, harmonized (2.8% y/y)
1500 US January ISM, non-manufacturing (53.9)
1715 US Richmond Fed President Lacker speaks

Wednesday, 6 February 2008
all times GMT
(last release in parentheses)

0001 UK January Nationwide consumer confidence (85.0)
0500 Japan December leading economic index (18.2%)
0500 Japan December coincident index (30.0%)
1030 UK January BRC shop price index
1200 US MBA mortgage applications
1330 US Q4 non-farm productivity (6.3%)
1330 US Q4 unit labour costs (-2.0%)
1330 Canada December building permits (-9.9% m/m)
1500 US Richmond Fed President Lacker speaks
1500 Canada January Ivey PMI (45.9)
1530 UK December leading indicator index (-0.3% m/m)
1530 UK December coincident indicator index (0.2% m/m)
1530 US Fed Governor Kroszner speaks
1840 US Philadelphia Fed President Plosser speaks
2145 NZ Q4 unemployment rate (3.5%)
2145 NZ Q4 employment change (-0.3% q/q)
2145 NZ Q4 employment change (1.5% y/y)

Thursday, 7 February 2008
all times GMT
(last release in parentheses)

N/A NZ January house sales (-32.1% y/y)
N/A Germany January wholesale price index (-0.5% m/m)
N/A Germany January wholesale price index (5.1% y/y)
0130 Japan Bank of Japan Deputy Governor Iwata speaks
0600 Japan January machine tool orders (3.7% y/y)
0645 CH January unemployment rate (2.8%)
0930 UK December industrial production (-0.1% m/m)
0930 UK December industrial production (0.4% y/y)
0930 UK December manufacturing production (-0.1% m/m)
0930 UK December manufacturing production (0.1% y/y)
1100 Germany December factory goods and orders (3.4% m/m)
1100 Germany December factory goods and orders (13.6% y/y)
1200 UK Bank of England MPC interest rate decision
1245 Eurozone European Central Bank interest rate decision
1330 US Weekly initial jobless claims
1330 US Continuing jobless claims
1500 US December pending home sales (-2.6% m/m)
1830 US January ICSC chain store sales (0.9% y/y)
2000 US December consumer credit (US$ 15.4 billion)
2350 Japan December machine orders (-2.8% m/m)
2350 Japan December machine orders (0.9% y/y)
2350 Japan January M2+CD money supply (2.1% y/y)
2350 Japan January broad liquidity (3.6% y/y)
2350 Japan January bank lending (0.1% y/y)

Friday, 8 February 2008
all times GMT
(last release in parentheses)

0001 UK January NIESR GDP estimate (0.5%)
0500 Japan January economy watchers’ survey, current (36.6)
0500 Japan January economy watchers’ survey, outlook (37.0)
0525 US San Francisco Fed Governor Yellen speaks
0645 CH January consumer price index (0.2% m/m)
0645 CH January consumer price index (2.0% y/y)
0700 Germany December trade balance (€19.3 billion)
0700 Germany December current account (€20.0 billion)
1100 Germany December industrial production (-0.9% m/m)
1100 Germany December industrial production (3.5% y/y)
1200 Canada January unemployment rate (5.9%)
1200 Canada January employment, net change (-18,700)
1315 Canada January housing starts
1500 US December wholesale inventories (0.6%)
1800 US Atlanta Fed President Lockhart speaks