News
and Media
WEEKLY MARKET RECAP,
WEEK AHEAD, AND SCHEDULE
Mandus Invest SA. | 22, June, 2008 /
Sunday
EURO
The euro appreciated vis-a-vis the U.S. dollar last week
as the single currency tested offers around the $1.5650 level
and was supported around the $1.5345 level. The pair gained
about 280 pips last week. G8 finance ministers met in Osaka
and didn’t address the weakness in the greenback. Traders
are scaling back their U.S. rate hike expectations. Richmond
Fed President Lacker suggested inflation is more of a threat
than an economic slowdown. WSJ sees rates steady until the
autumn “unless the inflation outlook deteriorates considerably.”
Paulson is seeking a financial stability remit for the Fed.
Fed #2 Kohn said the financial institutions are improving
their balance sheets. The U.S. dollar was off late in the
week on downgrades to bond insurers Ambac and MBIA. Israel
conducted military exercises for a possible attack on Iran.
ECB’s Tumpell-Gugerell said monetary policy remains “accommodative”
and sees a one-off hike in July. Germany’s IW institute lifted
its 2008 GDP forecast to 2.5%. The European Commission warned
against a wage and inflation spiral. ECB’s Bini Smaghi said
a +25bps hike “should be enough” to reduce inflation. ECB’s
Stark said May CPI of 3.7% is “unacceptably high.” The German
government sees Q2 GDP “dampening.” Euribor interest rate
futures are pricing in at least two ECB hikes this year.
Data released in the U.S. last week saw the June Empire State
manufacturing index print at -8.68; April net foreign purchases
of long-term U.S. securities was US$ 102.8 billion while net
buying excluding non-market flows reached US$ 115.1 billion
and “monthly net TIC flows” reached US$ 60.6 billion; May
producer prices soared 1.4% m/m and 7.2% y/y with core inflation
up 0.2% m/m and 3.0% y/y; May housing starts were off 3.3%;
May industrial production was off 0.2% with capacity utilization
off 0.2% to 79.4%; the Q1 current account goods/ deficit printed
at US$ 174.9 billion; the June homebuilders index fell to
+18; weekly initial jobless claims were off 5,000 to 381,000
with continuing jobless claims off 76,000 to 3.06 million;
the Philadelphia Fed manufacturing index fell to -17.1; and
the May leading index climbed 0.1%;
Data released in the eurozone last week saw EMU-15 May HICP
printed at 3.7%; the German ZEW June economic expectations
index fell to -52.4; the EMU-15 trade balance posted a €2.3
billion surplus; German PPI was up 1.0% m/m and 6.0% y/y;
and Italian April industrial orders were up 13.9% y/y.
Technical Outlook
Last week’s high (1) was right
around the 50.0% retracement of the 1.6018-1.5283 range and
last week’s low (2) was below the 23.6% retracement of the
same range. The 1.5650/ 1.5789/ 1.5854/ 1.5903 levels represent
upside resistance targets while the 1.5563/1.5456/ 1.5285/
1.5164/ 1.4962 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 Y107.20 level and was
capped around the Y108.55 level. The pair lost about 90 pips
last week. The Nikkei 225 stock index lost 1.33% on Friday
to close at Y13,942.08. Former MoF official Watanabe said
intervention is possible if the U.S. dollar’s depreciation
is “sharp.” The government reduced its assessment of the economy
for the second time in three months, downgrading its view
on exports, corporate profits, and industrial output. PM Fukuda
is unlikely to promote an economic stimulus package. Policy
Board minutes revealed “both supply and demand” shocks to
the Japanese economy. The BoJ Tankan survey of consumer sentiment
will be released on 1 July.
Data released in Japan this week saw May Tokyo-area condominium
sales were off; machine tool orders were revised to +1.4%;
the April tertiary index was up 1.8% m/m and 0.6% y/y; May
department store sales were off 2.7%; the April index of leading
economic indicators printed at 92.8 with the coincident index
steady at 101.7; and the April all-industries index rose 0.8%
m/m with the tertiary index up 1.8% m/m.
In Chinese news, the Chinese yuan appreciated vis-a-vis the
U.S. dollar as the greenback closed at CNY 6.8796 in the over-the-counter
market, down from CNY 6.9018. PBoC boss Zhou reported “A weak
dollar will inevitably result in a rise in primary products
including commodities, including oil. Therefore, the RMB will
also face a rising pressure, which will drive up inflation.”
Paulson said the U.S. “expressed an understanding and appreciation
for accelerating pace of appreciation of the renminbi.” China
lifted gasoline and diesel prices by 16% to 18% to reduce
oil demand.
Data released in China last week saw May wholesale prices
up 9.6% y/y; industrial value-added output was up 16.3% between
January and May; and January – May urban fixed asset investment
was up 25.6% y/y.
Technical Outlook
Last week’s high (1) was below
the 76.4% retracement of the 114.65-95.71 range and last week’s
low (2) was below the 61.8% retracement of the same range.
Upside resistance targets remain the 108.56/ 110.18/ 112.66/
114.65 levels while downside support targets remain the 106.27/
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$ 1.9790 level and
was supported around the $1.9455 level. The pair gained about
290 pips last week. BoE is unlikely to cut rates and the chances
of 2 or 3 rate hikes this year have fallen. BoE will unveil
a new liquidity program later this year. CBI’s 2009 GDP forecast
predicted a slowdown. BoE reported high inflation may “materially”
become engendered in inflation expectations over the medium-term.
BoE Governor King wrote a letter to Chancellor Darling because
U.K. CPI was more than 100bps above the 2.0% target. King
sees CPI well above expectations well into 2009. June MPC
minutes saw an 8-1 vote to keep rates unchanged with Blanchflower
favouring a 25bps cut. Policymakers acknowledge the economy
may need more slack “to ensure inflation returns to target.”
Deputy Governor Gieve is leaving the central bank next year.
Chief Economist Bean is being replaced by Spencer Dale and
is Bean is assuming Lomax’s deputy governorship from 1 July.
Darling is giving the BoE a new financial stability remit.
Gieve reported “risks to both the upside and downside remain
large.”
Data released in the U.K. last week saw May CPI at 3.3%;
the June CBI industrial trends had a balance of 28% of manufacturers
who saw higher prices in the next three months; May retail
sales were up 3.5% m/m and 8.1% y/y; May public sector net
debt and the public sector net cash requirement fell; CML
mortgage lending fell to £25.5 billion; and May provisional
M4 money supply growth was +0.4% m/m and +10.0% y/y.
Technical Outlook
Last week’shigh (1) was just
above the 23.6% retracement of the 2.1159-1.9336 range and
last week’s low (2) was above the 23.6% retracement of the
1.3682-2.1159 range. Upside resistance targets include the
1.9877/ 1.9999/ 2.0033 while downside support targets include
the 1.9602/ 1.9395/ 1.9336/ 1.9117/ 1.8631 levels.
CHF
The Swiss franc appreciated vis-a-vis the U.S. dollar last
week as the greenback tested bids around the CHF 1.0305 level
and was capped around the CHF 1.0520 level. The pair lost
about 125 pips last week. SNB kept interest rates unchanged
and hiked its 2008 and 2009 inflation forecasts. SNB chief
Roth reported the central bank considered a rate hike and
sees the potential for upward pressure on inflation rates.
Data released in Switzerland last week saw April retail sales
climbed 2.4% y/y; Q1 industrial production was up 4.3% y/y
and off 9.3% q/q; the June ZEW indicator for economic expectations
fell to -63.8 from -60.4 with the current economic situation
sub-index falling to 53.2; the May trade surplus widened to
CHF 1.87 billion; and May producer and import prices were
up 1.2% m/m and 3.9% y/y.
Technical Outlook
Last week’s high (1) was below
the 50.0% retracement of the 1.1594-0.9647 range and last
week’s low (2) was below the 38.2% retracement of the same
range. Upside resistance targets include the 1.0393/ 1.0623/
1.0850/ 1.1134 levels while downside support targets include
the 1.0314/ 1.0250/ 1.0106/ 0.9647/ 0.9605/ 0.9535 levels.
CAD
The Canadian dollar appreciated vis-a-vis the U.S. dollar
last week as the greenback tested bids around the C$ 1.0100
level and was capped around the C$ 1.0295 level. The pair
lost about 105 pips last week. Finance minister Flaherty reported
the C$ has “borne one-third of the brunt of the depreciation
of the U.S. currency.”
Data released in Canada last week saw April foreign investment
in Canadian securities increase C$ 975 million while April
Canadian investment in foreign securities rose to C$ 5.99
billion; the May composite leading indicators index was up
0.2%; May headline CPI was up 1.0% m/m and 2.2% y/y with the
core rate up 0.3% m/m and 1.5% y/y; April wholesale sales
were up 1.4%; and retail sales were up 0.6%.
Technical Outlook
Last week’s high (1) was above
the 23.6% retracement of the 0.9818-1.0321 range and last
week’s low (2) was below 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$ 0.9565
level and was supported around the US$ 0.9370 level. The pair
gained about 150 pips last week. RBA board members concluded
on 3 June that rates are appropriate to deal with inflation.
Data released in Australia last week saw Q1 housing starts
fall 3.3% q/q; the April Westpac leading index was up +2.8%;
May merchandise imports were up 7.0%; and the Westpac industrial
trends composite index fell to 53.9 in Q2.
Technical Outlook
Last week’s high (1) was above
the 23.6% retracement of the 0.8952-0.9653 range and last
week’s low (2) was below the 38.2% retracement of the same
range. Upside resistance targets include the 0.9648/ 0.9920/
1.0053 levels while downside support targets include the 0.9487/
0.9302/ 0.9263/ 0.9120/ 0.9003/ 0.8887 levels.
SCHEDULE
Sunday, 22 June 2008
all times GMT
(last release in parentheses)
2301 UK June Rightmove house prices (1.2% m/m)
2301 UK June Rightmove house prices (2.2% y/y)
2350 Japan Q2 BSI large manufacturing (-12.9% q/q)
2350 Japan Q2 BSI large manufacturing (-9.3% q/q)
Monday, 23 June 2008
all times GMT
(last release in parentheses)
0300 NZ May credit card spending (8.3% y/y)
0500 Japan May supermarket sales (-0.8% y/y)
0545 CH June SECO 2008 economic forecasts
0700 France June PMI, manufacturing (51.5)
0700 France June PMI, services (50.5)
0730 Germany June PMI, manufacturing (53.6)
0730 Germany June PMI, services (53.8)
0800 Germany June Ifo, business climate (103.5)
0800 Germany June Ifo, current assessment (110.1)
0800 Germany June Ifo, expectations (97.3)
0800 Eurozone June PMI, manufacturing (50.5)
0800 Eurozone June PMI, services (50.6)
Tuesday, 24 June 2008
all times GMT
(last release in parentheses)
N/A US Federal Open Market Committee meeting begins
0610 Germany July GfK consumer confidence (4.9)
0645 France May housing starts
0645 France May housing permits
0645 France May consumer spending (-0.8% m/m)
0645 France May consumer spending (0.4% y/y)
0650 France June business confidence (102)
0650 France June production outlook (-15)
0730 Italy June consumer confidence (103.2)
0800 CH May UBS consumption indicator (2.179)
0830 UK May BBA loans for house purchases
1230 US Former Federal Reserve Chairman Greenspan speaks
1300 US April S&P/ Case Shiller home price index (172.2)
1400 US April house price index (-0.4% m/m)
1400 US June Richmond Fed manufacturing index (-3)
1400 US June consumer confidence (57.2)
2350 Japan May merchandise trade balance (Y485.0 billion)
2350 Japan May corporate services prices (0.5% y/y)
Wednesday, 25 June 2008
all times GMT
(last release in parentheses)
N/A Germany June CPI (0.6% m/m)
N/A Germany June CPI (3.0% y/y)
N/A Germany June CPI, harmonized (0.7% m/m)
N/A Germany June CPI, harmonized (3.1% y/y)
N/A UK June Nationwide house prices (-2.5% m/m)
N/A UK June Nationwide house prices (-4.4% y/y)
0500 Japan June small business confidence (42.2)
0800 Italy April retail sales (-0.5% m/m)
0800 Italy April retail sales (-1.0% y/y)
0900 Eurozone April industrial new orders (-1.0% m/m)
0900 Eurozone April industrial new orders (-2.5% y/y)
1000 UK June CBI distributive trades report
1100 US MBA mortgage applications (-8.8%)
1230 US May durable goods orders (-0.5%)
1230 US May durable goods orders, ex-transportation (2.5%)
1400 US May new home sales (526,000)
1400 US May new hone sales (3.3% m/m)
1815 US Federal Open Market Committee interest rate decision
2245 NZ Q1 current account balance (-NZ$ 3.41 billion)
2350 Japan Foreign purchases of Japanese equities and bonds
2350 Japan Japanese purchases of foreign equities and bonds
Thursday, 26 June 2008
all times GMT
(last release in parentheses)
0000 Australia April leading index (-0.4%)
0130 Australia May job vacancies (-2.5%)
0600 Germany May import price index (0.9% m/m)
0600 Germany May import price index (5.7% y/y)
0645 France June consumer confidence (-41)
0730 Italy June business confidence (89.6)
0800 Eurozone May M3 money supply (10.7%)
0800 Eurozone May M3 money supply (10.6% y/y)
0830 UK Q1 total business investment (-1.4% q/q)
0830 UK Q1 total business investment (3.7% y/y)
1130 Eurozone Federal Reserve Vice Chairman Kohn speaks
1230 US Q1 GDP, annualized (0.9% q/q)
1230 US Q1 GDP price index (2.6%)
1230 US Q1 personal consumption expenditures (2.1% q/q)
1230 US Weekly initial jobless claims (381,000)
1230 US Continuing jobless claims (3.060 million)
1400 US May existing home sales (4.89 million)
1400 US May existing home sales (-1.0% m/m)
2245 NZ Q1 GDP (3.7% y/y)
2245 NZ May trade balance
2330 Japan May jobless rate (4.0%)
2330 Japan June Tokyo-area CPI (0.9% y/y)
2330 Japan June Tokyo-area CPI, ex-fresh food (0.9% y/y)
2330 Japan June Tokyo-area CPI, ex-food, energy (0.1% y/y)
2330 Japan May CPI (0.8% y/y)
2330 Japan May CPI, ex-fresh food (0.9% y/y)
2330 Japan May CPI, ex-food, energy (-0.1% y/y)
2350 Japan May large retailers’ sales (-2.2%)
2350 Japan May retail trade (-0.1% m/m)
2350 Japan May retail trade (0.1% y/y)
2350 Japan May household spending (-2.7% y/y)
2350 Japan May industrial production (-0.2% m/m)
2350 Japan May industrial production (1.9% y/y)
2350 Japan May retail trade (-0.1% m/m)
2350 Japan May retail trade (0.1% y/y)
Friday, 27 June 2008
all times GMT
(last release in parentheses)
N/A Germany June Ifo business climate survey
0300 NZ May M3 money supply (4.5% y/y)
0430 Australia Reserve Bank of Australia Assistant Governor
Debelle speaks
0645 France May PPI (5.4% y/y)
0650 France Q1 GDP (2.1% y/y)
0800 Italy June PMI, retail
0800 France June PMI, retail
0800 Germany June PMI, retail
0800 Eurozone June PMI, retail (53.1)
0800 Eurozone April current account (-€15.3 billion)
0830 UK Q1 GDP (0.4% q/q)
0830 UK Q1 GDP (2.5% y/y)
0830 UK Q1 current account (-£8.5 billion)
0900 Italy May hourly wages (2.8% y/y)
0900 Eurozone June business climate (0.54)
0900 Eurozone June consumer confidence (-15)
0900 Eurozone June economic confidence (97.1)
0900 Eurozone June industrial confidence (-2)
0900 Eurozone June services confidence (8)
0930 CH June KOF leading indicator (1.09)
1230 US May personal income (0.2%)
1230 US May personal spending (0.2%)
1230 US May PCE, core (0.1% m/m)1230 US May PCE, core (2.1%
y/y)
1230 US May PCE deflator (3.2% y/y)
1230 Canada May industrial product price (1.4% m/m)
1230 Canada May raw materials price index (5.1% m/m)
1400 US June University of Michigan consumer sentiment (56.7)
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