News
and Media
WEEKLY MARKET RECAP,
WEEK AHEAD, AND SCHEDULE
Mandus Invest SA. | 20, July, 2008 /
Sunday
EURO
The euro depreciated vis-a-vis the U.S. dollar last week
as the single currency tested bids around the $1.5785 level
and was capped around the $1.6040 level. The pair lost about
90 pips last week. The U.S. government bailed out Fannie Mae
and Freddie Mac with a “liquidity backstop” and will purchase
shares in them if needed. Bernanke cited a “critical” need
to keep inflation expectations in check and said a “top priority”
is normal market functioning. The Fed sees 2008 GDP growth
of 1.0% to 1.6% with core inflation at 2.2% to 2.4%. Sovereign
wealth funds are said to have reduced US$ exposure. FOMC meeting
minutes revealed policymakers believed “some firming in policy
would be appropriate very soon.” The greenback rallied on
lesser-than-expected losses by Citigroup in Q2.
ECB’s Constancio sees EMU-15 Q2 GDP growth slowing.
The German government cautioned of an “exaggerated” pullback
in Q2 GDP growth. ECB’s Wellink warned long-term inflation
expectations must be weakened. ECB’s Trichet said GDP growth
is likely to be weak in Q2 and Q3 and improve.
Data released in the U.S. last week saw June headline PPI
up 1.8% m/m and 9.2% y/y with the core rate up +0.2% m/m and
+3.0% y/y; the core PPI rate was up +0.2% and +3.0% y/y; June
advance retail sales were up +0.1% on the headline and +0.8%
at the ex-transportation level; the July Empire State manufacturing
index improved to -4.98 from -8.68 in June; May business inventories
were up 0.3%; June core CPI was up 0.3% m/m and 2.4% y/y;
June average weekly earnings were off 0.9% m/m and 2.4% y/y;
June industrial production was up 0.5% with capacity utilization
up to 79.9%; net foreign purchases of long-term U.S. securities
fell to US$ 44.4 billion; weekly initial jobless claims were
up 18,000 to 366,000 with continuing jobless claims off 81,000
to 3.122 million; July housing starts were up 9.1% to an annualized
1.066 million; June building permits were up 11.6%; and the
Philadelphia Fed manufacturing survey improved to -16.3.
Data released in the eurozone last week saw EMU-15 April
industrial production was off 1.9% m/m and 0.6% y/y; German
August ZEW economic expectations fell to -63.9 from -52.4
in July; EMU-15 June CPI jumped to 4.0%; German final June
CPI was up 0.3% m/m and 3.3% y/y; the EMU-15 May trade balance
printed at -€4.6 billion; and German PPI was up 0.9% m/m and
6.7% y/y.
Technical Outlook
Last week’shigh (1) was a new
lifetime high and last week’s low (2) was above the 38.2%
retracement of the 1.4309-1.6038 range. The 1.5903/ 1.6018/
1.6122 levels represent upside resistance targets while the
1.5837/ 1.5650/ 1.5563/1.5456/ 1.5285 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 Y107.10 level and was
supported around the Y103.75 level. The pair gained about
60 pips last week. The Nikkei 225 stock index lost 0.65% on
Friday to close at Y12,803.70. Economy czar said the economy
“is in a flat trend that is barely holding” while the government
kept its assessment unchanged in July, reporting “business
conditions have deteriorated.” BoJ kept its overnight call
rate unchanged at 0.50% and Shirakawa pledged “flexible” monetary
policy. The BoJ cut its GDP growth forecast to 1.2% - 1.5%
and upped its core CPI growth forecast to 1.8%. BoJ also downgraded
its views on exports, production, and housing investment.
The government is expected to reduce its current FY GDP forecast
to 1.3% this week. The government warned it may be difficult
to balance its public finances by FY 2011-2012. Shirakawa
sees the economy avoiding a “deep adjustment” and said the
“balance is 50-50” towards boosting economic growth and slowing
inflation.
Data released in Japan this week saw the May tertiary
index fall 0.2% m/m.
In Chinese news, the Chinese yuan appreciated vis-a-vis
the U.S. dollar as the greenback closed at CNY 6.8169 in the
over-the-counter market, down from CNY 6.8340. The government
denied a rumour it will try to slow the yuan’s appreciation.
The government sees H2 GDP growth decelerating.
Data released in China last week saw the M2 money supply
up 17.3% at the end of June; foreign reserves were US$ 1.8088
trillion at the end of June; Q2 GDP was up 10.1% y/y; June
PPI was up 8.8% y/y; June CPI was up 7.1% y/y; H1 industrial
output was up 16.3% y/y; H1 retail sales were up 21.4% y/y;
and the June property climate index fell to 103.08.
Technical Outlook
Last week’s high (1) was above
the 23.6% retracement of the 95.71-108.56 range and last week’s
low (2) was right around the 38.2% retracement of the same
range. Upside resistance targets remain the 107.15/ 108.56/
110.18/ 112.66/ 114.65 levels while downside support targets
remain the 105.18/ 103.44/ 102.42/ 100.18 levels.
GBP
The British pound appreciated vis-a-vis the U.S. dollar last
week as cable tested offers around the US$ 2.0155 level and
was supported around the $1.9810 level. The pair gained about
95 pips last week. BoE’s King sees CPI above 3.0% well into
2009 and returning to 2.0% in two years. New BoE Chief Economist
Dale sees “substantially higher” CPI over the coming months
and warned longer-term inflation expectations need to be anchored.
MPC’s Sentance expressed concern with the speed of inflation’s
ascent. MPC’s Gieve said CPI is likely “to be well over 4
per cent for much of the rest of the year.” The U.K. government
may release its fiscal rules to allow more borrowing.
Data released in the U.K. last week saw May input prices
rise 2.1% m/m and 30.0% y/y; headline May output prices were
up 0.9% m/m and 10.0% y/y with core output up 0.3% m/m and
6.3% y/y; June CPI jumped to 3.8% from 3.3%; 88% of RICS June
house price respondents saw lower house prices; BRC June retail
sales fell; the June claimant count of unemployment rose 15,500
with average earnings including bonus up 3.8% in the three
months to May; CML mortgage lending was at its weakest since
2006; and June net borrowing rose to £9.2 billio.
Technical Outlook
Last week’s high (1) was right
around the 76.4% retracement of the 2.0396-1.9364 range and
last week’s low (2) was above the 38.2% retracement of the
same range. Upside resistance targets include the 2.0033/
2.0248/ 2.0463 levels while downside support targets include
the 1.9767/ 1.9602/ 1.9395 levels.
CHF
The Swiss franc depreciated vis-a-vis the U.S. dollar last
week as the greenback tested offers around the CHF 1.0255
level and was supported around the CHF 1.0010 level. The pair
gained about 65 pips last week. SNB encouraged banks to recapitalize
their balance sheets.
Data released in Switzerland last week saw May retail sales
climb 9.3% and the July ZEW economic expectations index fell
to -76.9 from -63.8.
Technical Outlook
Last week’s high (1) was right
around the 38.2% retracement of the 0.9647-1.0623 range and
last week’s low (2) was right the 61.8% retracement of the
same range. Upside resistance targets include the 1.0250/
1.0393/ 1.0623/ 1.0850/ 1.1134 levels while downside support
targets include the 1.0135/ 1.0020/ 0.9877/ 0.9647/ 0.9605
levels.
CAD
The Canadian dollar appreciated vis-a-vis the U.S. dollar
last week as the greenback tested bids around the C$ 0.9975
level and was capped around the C$ 1.0140 level. The pair
lost about 25 pips last week. Bank of Canada kept its benchmark
lending rate unchanged at 3.0% and cited “significant upside
and downside risks” while noting the economy is in “slight
excess supply.” BoC sees GDP growth around 1.0% this year
and a temporary move in inflation above 4.0%.
Data released in Canada last week saw May manufacturing
shipments up 2.7%; foreign investment in Canadian securities
rose to C$ 10.717 billion in May; May wholesale sales rose
1.6% m/m; and the June leading index climbed 0.2% m/m.
Technical Outlook
Last week’s high (1) was just
above the 61.8% retracement of the 1.0378-0.9709 range and
last week’s low (2) was right around the 38.2% retracement
of the same range. Upside resistance targets include the 1.0202/
1.0378/ 1.0439/ 1.0797 levels while downside support targets
include the 1.0069/ 0.9965/ 0.9867/ 0.9752 levels.
AUD
The Australian dollar appreciated vis-a-vis the U.S. dollar
last week as the Aussie tested offers around the US$ 0.9850
level and was supported around the US$ 0.9660 level. The pair
gained about 45 pips last week. RBA July meeting minutes revealed
concern that Q2 inflation would be significantly above 1.0%
but policymakers decided rates are high enough at 7.25%. Policymakers
expect a slowdown in consumer spending and the labour markets.
RBA boss Stevens sees a “more moderate track for demand.”
Data released in Australia last week saw May personal finance
off 7.8% m/m; June imports fell to A$ 17.5 billion; and Q2
export prices were up 17.5% q/q.
Technical Outlook
Last week’s high (1) was a
new multi-decade high and last week’s low (2) was above the
23.6% retracement of the 0.7673-0.9667 range. Upside resistance
targets include the 0.9851/ 0.9920/ 1.0053/ 1.0367 levels
while downside support targets include the 0.9533/ 0.9431/
0.9394/ 0.9263/ 0.9120/ 0.9003/ 0.8887 levels.
SCHEDULE
Sunday, 20 July 2008
all times GMT
(last release in parentheses)
2301 UK July Rightmove house prices (-1.2% m/m)
2301 UK July Rightmove house prices (0.1% y/y)
Monday, 21 July 2008
all times GMT
(last release in parentheses)
0130 Australia Q2 producer price index (1.9% q/q)
0130 Australia Q2 producer price index (4.8% y/y)
0300 NZ June credit card shopping (5.9% y/y)
0700 CH June M3 money supply (2.6% y/y)
0715 CH June producer and import prices (1.2% m/m)
0715 CH June producer and import prices (3.9% y/y)
1400 US June leading indicators (0.1%)
2350 Japan May all-industry activity index (0.8% m/m)
Tuesday, 22 July 2008
all times GMT
(last release in parentheses)
0615 CH June trade balance (CHF 1.87 billion)
1230 Canada May retail sales (0.6% m/m)
1230 Canada May retail sales, ex-autos (1.1% m/m)
1400 US July Richmond Fed manufacturing index (-12)
1400 US May house price index (-0.8% m/m)
Wednesday, 23 July 2008
all times GMT
(last release in parentheses)
0100 Australia July DEWR skilled vacancies
0130 Australia Q2 consumer price index (1.3% q/q)
0130 Australia Q2 consumer price index (4.2% y/y)
0645 France June consumer spending (2.0% m/m)
0645 France June consumer spending (3.1% y/y)
0800 Italy May retail sales (0.0% m/m)
0800 Italy May retail sales (-2.3% y/y)
0830 UK Bank of England Monetary Policy Committee meeting
minutes
0830 UK June BBA loans for house purchase
0900 Eurozone May industrial new orders (2.5% m/m)
0900 Eurozone May industrial new orders (11.7% y/y)
1100 US MBA mortgage applications
1100 Canada June consumer price index (1.0% m/m)
1100 Canada June consumer price index (2.2% y/y)
1100 Canada June Bank of Canada CPI (0.3% m/m)
1100 Canada June Bank of Canada CPI (1.5% y/y)
1300 Canada Federal Reserve Governor Mishkin speaks
1515 US Federal Reserve Vice Chairman Kohn speaks
1800 US Federal Reserve Beige Book
2100 NZ Reserve Bank of New Zealand interest rate decision
2350 Japan June merchandise trade balance (Y365 billion)
Thursday, 24 July 2008
all times GMT
(last release in parentheses)
0645 France July business confidence (102)
0645 France July production outlook
0730 Germany July PMI, manufacturing (52.6)
0730 Germany July PMI, services (52.1)
0800 Germany July Ifo, business climate (101.3)
0800 Germany July Ifo, expectations (94.7)
0800 Eurozone July PMI, manufacturing (49.2)
0800 Eurozone July PMI, services (49.1)
0800 Eurozone May current account (-€300 million)
0830 UK June retail sales (3.5% m/m)
0830 UK June retail sales (8.1% y/y)
1230 US Weekly initial jobless claims (366,000)
1230 US Continuing jobless claims (3.122 million)
1400 US June existing home sales (4.99 million)
1400 US June existing home sales (2.0% m/m)
1400 US New York Federal Reserve President Geithner testifies
2330 Japan July Tokyo-area consumer price index (1.5% y/y)
2330 Japan July Tokyo-area CPI, ex-food, energy (0.3% y/y)
2330 Japan National consumer price index (1.3% y/y)
2330 Japan National CPI, ex-food, energy (-0.1% y/y)
2350 Japan Foreign purchases of Japanese equities and bonds
2350 Japan Japanese purchases of foreign equities and bonds
2350 Japan June corporate service prices (0.6% y/y)
Friday, 25 July 2008
all times GMT
(last release in parentheses)
0800 Eurozone July M3 money supply (10.4%)
0800 Eurozone July M3 money supply (10.5% y/y)
0830 UK Q2 GDP (0.3% q/q)
0830 UK Q2 GDP (2.3% y/y)
0830 UK May index of services (0.3%)
1230 US June durable goods orders (0.0%)
1230 US June durable goods orders, ex-transportation (-0.9%)
1400 US July University of Michigan consumer sentiment (56.6)
1400 US June new home sales (512,000)
1400 US June new home sales (-2.5% m/m)
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