News
and Media
WEEKLY MARKET RECAP,
WEEK AHEAD, AND SCHEDULE
Mandus Invest SA. | 17, February, 2008
/ Sunday
EURO
The euro appreciated vis-a-vis the U.S. dollar last week
as the single currency tested offers around the $1.4810 level
and was supported around the $1.4480 level. The pair gained
about 180 pips last week. G7 officials issued a spineless
FX communiqué and reiterated the need to avoid “undesirable”
volatility. Bernanke reiterated there are downside growth
risks to the U.S. economy and pledged more rate cuts if needed.
The fed funds market sees more than a 90% chance of a 25bps
rate but by the 30-31 April FOMC meeting. Greenspan said the
U.S. is “clearly on the edge of a recession.” Chicago Fed’s
Evans sees real GDP growing “at a very sluggish rate.”
ECB’s Trichet said EMU-15 growth fundamentals are “sound”
and said there’s been no informal discussion at the ECB about
reducing rates. ECB’s Weber sees the EMU-15 economy expanding
upwards of 2% per year. ECB’s Papademos called on the ECB
to enhance market transparency. The ECB conceded economic
risks are titled to the downside and ECB’s Quaden said the
ECB may need to change its growth estimate from December.
Private economists are forecasting lower EMU-15 growth in
2008 along with higher inflation. ECB’s Liikanen said “price
stability is a prerequisite.” Trichet said globalization’s
effect on lessening inflation may be ending. Weber said interest
rate expectations don’t “adequately reflect” the EMU-15 inflation
outlook and noted risks “are clearly on the upside.”
Data released in the U.S. last week saw January headline
retail sales were up +0.3% with the ex-autos component up
+0.3% m/m and 3.9% over the past year; December business inventories
were up +0.6% m/m; weekly initial jobless claims fell 9,000
to 348,000 with continuing claims up to 2.76 million; the
December trade deficit improved to –US$ 58.8 billion; January
import prices were up 1.7% m/m and 13.7% y/y; the New York
State’s Empire manufacturing index fell to -11.72; January
industrial production was up 1.9% and capacity utilization
was at 81.5%; the mid-February University of Michigan consumer
sentiment index fell to 69.6 from 78.4 in January; and monthly
net purchases of U.S. securities by overseas investors totaled
US$ 60.4 billion in December.
Data released in the eurozone last week saw December EMU-13
industrial output fall 0.2% m/m and rise 1.3% y/y; January
wholesale price index rose 1.4% m/m and 6.6% y/y; EMU-13 Q4
GDP growth slowed to 0.4% in the three months to December
from 0.8% in Q3; and the EMU-13 December trade balance printed
at -€4.2 billion.
Technical Outlook
Last week’shigh (1) was right
at the 61.8% retracement of the 1.4967-1.4309 range and last
week’s low (2) was just above the 23.6% retracement of the
same range. The 1.4716/ 1.4813/ 1.4908 levels represent upside
resistance targets while the 1.4631/ 1.4555/ 1.4378/ 1.4239/
1.4163/ 1.3973 levels represent downside support targets.
CNY
The yen depreciated vis-a-vis the U.S. dollar last week as
the greenback tested offers around the Y108.60 level and was
supported around the Y106.30 level. The pair gained about
30 pips last week. The Nikkei 225 stock index lost 0.70% to
close at Y13,622.56. Speculation mounted that BoJ Deputy Governor
Muto will be nominated to replace Fukui. BoJ’s Policy Board
kept the overnight call rate unchanged at 0.50%. Fukui said
rising input costs are sapping profits. BoJ kept its economic
assessment unchanged and said industrial output is likely
to remain flat in the near-term.
Data released in Japan this week saw January consumer confidence
decline to its lowest level in more than four years at 37.5;
the January current account surplus fell 4.7% y/y to Y1.697
trillion; January corporate failures were off 0.3% m/m; the
January corporate goods price index rise 3.0% y/y; December
industrial output was up 1.4% m/m; January machine tool orders
were flat y/y; and GDP expanded 0.9% in the October – December
quarter, an annualized 3.7%.
In Chinese news, the Chinese yuan appreciated vis-a-vis the
U.S. dollar as the greenback closed at CNY 7.1825. The G7
“encouraged” China to permit the yuan’s appreciation to accelerate.
Technical Outlook
Last week’s high (1) was right
at the 38.2% 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 109.80/ 110.04/
111.80/ 112.89 levels while downside support targets remain
the 107.25/ 104.19/ 101.67/ 101.20/ 98.65 levels.
GBP
The British pound appreciated vis-a-vis the U.S. dollar last
week as cable tested offers around the US$ 1.9720 level and
was supported around the $1.9400 level. The pair gained about
170 pips last week. BoE’s quarterly inflation report assumes
an additional 75bps of easing this year and sees “downside”
growth risks and higher inflation. BoE’s King sees “tighter
credit conditions for households and businesses” bearing down
on demand. BoE’s Tucker said banks’ earnings in the next few
weeks will be critical to resolving the credit crisis. Sterling
weakened late in the week on speculation that British banks
will be forced to take major write-downs related to CDOs.
Data released in the U.K. last week saw headline output prices
up 1.0% m/m with input prices up 2.6% m/m and core output
prices up 1.1% m/m and 3.1% y/y; the December global goods
trade deficit narrowed to -£7.6 billion; the December DCLG
house price inflation measure receded to 9.1%; January RICS
house prices fell to their lowest level in fifteen years;
and the January claimant count fell 10,800 with benign wage
growth of +3.8%.
Technical Outlook
Last week’s high (1) was just
below the 23.6% retracement of the 2.1159-1.9336 range and
last week’s low (2) was right at the 23.6% retracement of
the 1.3682-2.1159 range. Upside resistance targets include
the 1.9767/ 1.9837/ 1.9937/ 2.0033/ 2.0149 levels while downside
support targets include the 1.9336/ 1.9262/ 1.9182/ 1.9103/
1.8618 levels.
CHF
The Swiss franc appreciated vis-a-vis the U.S. dollar last
week as the greenback tested bids around the CHF 1.0885 level
and was capped around the CHF 1.1045 level. The pair lost
about 125 pips last week. UBS may announced upwards of US$
18 billion in CDOs write-downs.
Data released in Switzerland last week saw the ZEW February
economic expectations indicator fell to -55.5 from -32.7 in
January.
Technical Outlook
Last week’s high (1) was just
below the 38.2% 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/
1.1059/ 1.1161/ 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 depreciated vis-a-vis the U.S. dollar
last week as the greenback tested offers around the C$ 1.0040
level and was supported around the C$ 0.9920 level. The pair
gained about 30 pips last week.
Data released in Canada last week saw the December house
price index up 0.1% m/m and 6.2% y/y; the December trade surplus
fell to C$ 2.4 billion, a nine-year low; and December manufacturing
shipments fell 3.4%
Technical Outlook
Last week’s high (1) was below
the 23.6% retracement of the 0.9063-1.0386 range and last
week’s low (2) was 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$ 0.9095
level and was supported around the US$ 0.8950 level. The pair
gained about 115 pips last week. RBA’s inflation outlook was
hawkish, noting monetary policy will likely become tighter.
Data released in Australia last week saw December housing
finance up 0.1% m/m; January ANZ job ads were up 1.8% m/m
and 31.9% y/y; December housing finance was up 0.1% m/m; the
Westpac February consumer sentiment index fell 5.5% to 97.4;
and the January unemployment rate reached a record low of
4.1%
Technical Outlook
Last week’s high (1) was above
the 61.8% retracement of the 0.9399-0.8511 range and last
week’s low (2) was just below the 50.0% retracement of the
same range. Upside resistance targets include the 0.9114/
0.9223/ 0.9340/ 0.9420 levels while downside support targets
include the 0.8992/ 0.8851/ 0.8740/ 0.8549/ 0.8332 levels.
SCHEDULE
Sunday, 17 February 2008
all times GMT
(last release in parentheses)
2300 NZ January performance of services index
2350 Japan December tertiary industry index (0.10% m/m)
Monday, 18 February 2008
all times GMT
(last release in parentheses)
N/A Eurozone January import price index (3.70% y/y)
0001 UK February Rightmove house prices (-0.80% m/m)
0001 UK February Rightmove house prices (3.40% y/y)
0500 Eurozone December leading economic index (40.0%)
Tuesday, 19 February 2008
all times GMT
(last release in parentheses)
0300 Australia January preliminary imports (-0.30% m/m)
0900 Italy December trade balance
1000 Eurozone December construction output (-0.80% m/m)
1200 Canada January consumer price index (0.10% m/m)
1200 Canada January consumer price index (2.4% y/y)
1200 Canada Bank of Canada CPI, core (-0.30% m/m)
1200 Canada Bank of Canada CPI, core (1.50% y/y)
1330 Canada December wholesales sales (0.30% m/m)
1800 US February NAHB housing market index (19)
2330 Australia December Westpac leading index (1.00% m/m)
2350 Japan Bank of Japan Policy Board meeting minutes, 21-22
January
Wednesday, 20 February 2008
all times GMT
(last release in parentheses)
N/A Eurozone February PMI, services (50.6)
N/A Eurozone February PMI, manufacturing (52.8)
0000 Australia February DEWR skilled vacancies (1.10% m/m)
0030 Australia Q4 wage cost index (1.00% q/q)
0030 Australia Q4 wage cost index (4.20% y/y)
0700 Japan January convenience store sales (-1.10% y/y)
0700 Germany January producer prices (-0.10% m/m)
0700 Germany January producer prices (2.50% y/y)
0900 Eurozone December industrial orders (3.60% m/m)
0900 Italy December industrial orders
0900 Italy December industrial sales
0930 UK Bank of England Monetary Policy Committee meeting
minutes
0930 UK January public sector net cash requirement (£17.0
billion)
0930 UK January public sector net borrowing (£7.8 billion)
0930 UK January M4 money supply (1.50% m/m)
0930 UK January M4 money supply (12.30% y/y)
1100 UK February CBI industrial trends survey
1200 US MBA mortgage applications
1330 US January consumer price index (0.30% m/m)
1330 US January consumer price index (4.10% y/y)
133 US January consumer price index, ex-food and energy (2.40%
y/y)
1330 US January housing starts (1.006 million)
1330 US January building permits (1.068 million)
1330 Canada December international securities transactions
1330 Canada December leading indicators (-0.10% m/m)
1800 US St. Louis Fed President Poole speaks
1900 US Federal Open Market Committee meeting minutes, 29-30
January
2350 Japan January merchandise trade balance, total (Y874.9
billion)
2350 Japan February equities and fixed-income investments
2350 Japan December all-industries activity index (-0.50%
m/m)
Thursday, 21 February 2008
all times GMT
(last release in parentheses)
N/A CH January employment level
0200 NZ January credit card spending
0330 Australia November average weekly wages (1.0% q/q)
0330 Australia November average weekly wages (4.90% y/y)
0715 CH January trade balance (CHF 200 million)
0745 Eurozone January consumer price index (0.40% m/m)
0745 Eurozone January consumer price index (2.60% y/y)
0745 Eurozone January CPI, harmonized (0.40% m/m)
0745 Eurozone January CPI, harmonized (2.80% y/y)
0815 CH January producer and import prices (-0.10% m/m)
0815 CH January producer and import prices (2.70% y/y)
0830 Eurozone February consumer confidence (102.2)
0900 Eurozone December current account (€700 million)
0930 UK January retail sales (-0.40% m/m)
0930 UK January retail sales (2.70% y/y)
1330 US Weekly initial jobless claims
1330 US Continuing jobless claims
1500 US February Philadelphia Fed index (-20.9)
1500 US January leading indicators (-0.20%)
Friday, 22 February 2008
all times GMT
(last release in parentheses)
N/A Japan January supermarket sales (-1.80% y/y)
0000 Eurozone December industrial new orders (2.70% m/m)
0300 Japan Bank of Japan Governor Fukui speaks
0745 Eurozone January consumer spending (2.0% m/m)
0750 Eurozone February business consumer confidence (109)
0750 Eurozone February production outlook indicator (-4)
1000 Italy January consumer price inflation
1000 Eurozone December industrial new orders (11.90% y/y)
1330 Canada December retail sales (0.70% m/m)
1330 Canada December retail sales, ex-autos (1.70% m/m)
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