News
and Media
WEEKLY MARKET RECAP,
WEEK AHEAD, AND SCHEDULE
Mandus Invest SA. | 16, March, 2008
/ Sunday
EURO
The euro appreciated vis-à-vis the U.S. dollar last week
as the single currency tested offers around the $1.5690 level
and was supported around the $1.5280 level. The pair gained
about 320 pips last week. The Fed announced a new US$ 200
billion Term Securities Lending Facility where it will create
a 28-day repo and provide U.S. Treasuries in exchanged for
agency and mortgage-backed securities debt. The Fed also upped
its swap lines with ECB and SNB. Carlyle Capital defaulted
on $16 billion in MBS trades and this hurt the dollar. Bush
verbally intervened to support the U.S. dollar. FRBNY and
JPMorgan Chase bailed out Bear Stearns on Friday. Fed funds
are pricing in about a 66% chance of a cumulative 125bps easing
over the next two FOMC meetings.
ECB’s Trichet verbally intervened saying he is “concerned”
about “present excessive” FX moves. ECB’s Weber said upside
price risks are “very high” and outweigh downside economic
growth risks. Buba may upwardly revise its 2008 growth forecast.
German exports are expected to top €1 trillion in 2008. Juncker
verbally intervened to support the U.S. dollar and Trichet
said he is “preoccupied” with disorderly FX movements. The
ECB sees Q1 GDP growth at 0.4% or below and warned on core
inflation increases.
Data released in the U.S. last week saw January wholesale
inventories up +0.8%; the January trade balance worsened to
–US$ 58.2 billion; weekly initial jobless claims were unchanged
at 353,000 with continuing jobless claims up 7,000 to 2.835
million; February retail sales were off 0.6% with the ex-autos
component off 0.2%; February import prices were up 0.2% with
export prices up 0.9%; the March University of Michigan consumer
sentiment index fell to 70.5; and February headline and core
CPI was unchanged m/m.
Data released in the eurozone last week saw the German January
trade surplus rise to €17.1 billion; Germany’s March ZEW economic
expectations index climbed to -32.0; EMU-15 industrial output
was up 0.9% m/m and 3.8% y/y; French February HICP was unchanged
at 3.2%; EMU-15 February CPI was upwardly revised to 3.3%,
an all-time high; EMU-13 Q4 labour costs were up 3.5% y/y;
and German February CPI was up 0.5% m/m and 2.8% y/y
Technical Outlook
Last week’s high (1) was a
new lifetime high and last week’s low (2) was above the 38.2%
retracement of the 1.4438-1.5688 range. The 1.5789/ 1.5854
levels represent upside resistance targets while the 1.5393/
1.5219/ 1.5069/ 1.4979 levels represent downside support targets.
CNY
The yen appreciated vis-à-vis the U.S. dollar last week as
the greenback tested bids around the ¥98.90 level and was
capped around the ¥103.55 level. The pair lost about 355 pips
last week. The Nikkei 225 stock index lost 1.54% on Friday
to close at ¥12,241.60. The pair traded below parity for the
first time since 1995. Finance chief Nukaga verbally intervened
against the yen’s strength. BoJ Governor nominee met with
stiff opposition and Fukuda may put forth a new candidate.
Economy minister Ota said the U.S. economic downturn is intensifying.
EPA forecasts see Q1 GDP growth around 0.42%. BoJ Policy Board
meeting minutes from 14-15 February saw downside risks to
the global economy and U.S. BoJ’s Noda said industrial production
is “flattened” but doesn’t see a BoJ rate cut.
Data released in Japan this week saw the February money supply
up 2.3%; February bank lending was up +0.9% y/y; the February
economy watchers’ survey improved to 33.6; January private
sector machinery orders surged 19.6% m/m; February machine
tool orders were off 0.5% y/y; GDP accelerated between October
– December, up 0.9% m/m and 3.5% y/y; the January current
account surplus expanded 8.1% y/y; the February corporate
goods price index was up 0.4% and 3.4% y/y; consumer sentiment
worsened to 36.1 in February; January industrial output fell
2.2% m/m; and Tokyo and Osaka February condo sales fell.
In Chinese news, the Chinese yuan appreciated vis-à-vis the
U.S. dollar as the greenback closed at CNY 7.0894 in the over-the-counter
market, down from CNY 7.1110. The Chinese government sees
China’s labour market worsening.
Data released in China last week saw the February trade surplus
printed at US$ 8.56 billion; the February producer price index
was up 6.6% y/y; China’s CPI is estimated to have been 8.3%
in February; February CPI was up 8.7% y/y; retail sales climbed
20.2% y/y in the January – February period; actual foreign
direct investment was up 75.19% in the January – February
period; January consumer confidence fell to 95.6; industrial
value-added output climbed 15.4% y/y in the January-February
period; and January-February urban fixed-asset investment
was up 24.3% y/y.
Technical Outlook
Last week’s high (1) was below
the 38.2% retracement of the 114.65-98.89 range and last week’s
low (2) was a new multi-year low. Upside resistance targets
remain the 102.61/ 104.91/ 105.62/ 106.77/ 108.63 levels while
downside support targets remain the 98.00/ 95.04/ 94.41 levels.
GBP
The British pound appreciated vis-à-vis the U.S. dollar last
week as cable tested offers around the US$ 2.0395 level and
was supported around the $1.9995 level. The pair gained about
85 pips last week. Prime Minister Brown verbally intervened
on exchange rates, saying people are “concerned” about excessive
volatility.
Data released in the U.K. last week saw February PPI input
prices up 1.7% m/m and 19.3% y/y; output prices rose 0.3%
m/m and 5.7% y/y; January manufacturing production rose 0.4%;
January industrial production fell 0.1%; BRC February high
street sales were up 1.5% y/y; RICS house prices worsened
in February; CML January mortgage loans were off 19% m/m;
NIESR expanded in the three months to February, but below
trend; January annual house price inflation fell to 8.0% from
8.4% in December; the January trade deficit was unchanged
at -£7.5 billion; and the U.K. public’s inflation expectations
jumped to 3.3% for the coming year in February.
Technical Outlook
Last week’s high (1) was above
the 50.0% retracement of the 2.1159-1.9336 range and last
week’s low (2) was below the 38.2% retracement of the same
range. Upside resistance targets include the 2.0463/ 2.0729
levels while downside support targets include the 2.0033/
1.9910/ 1.9767/ 1.9618 levels.
CHF
The Swiss franc appreciated vis-à-vis the U.S. dollar last
week as the greenback tested bids around the CHF 0.9970 level
and was capped around the CHF 1.0255 level. The pair lost
about 270 pips last week. The pair fell below parity for the
first time in decades. SNB kept its three-month Swiss franc
Libor target rate unchanged at 2.25% to 3.25% and will continue
to target 2.75%. SNB reduced its 2008 GDP growth forecast
to 1.5% and lifted its inflation forecast to 2.0%. SNB’s Hildebrand
sees financial market turbulence likely to continue.
Data released in Switzerland last week saw the March economic
expectations index fall to -71.7 from -55 in February.
Technical Outlook
Last week’s high (1) was below
the 23.6% retracement of the 1.1594-1.0133 range and last
week’s low (2) was a new multi-decade low. Upside resistance
targets include the 1.0478/ 1.0691/ 1.0864/ 1.1010/ levels
while downside support targets include the 1.0104/ 1.0074/
0.9605 levels.
CAD
The Canadian dollar appreciated vis-à-vis the U.S. dollar
last week as the greenback tested bids around the C$ 0.9795
level and was capped around the C$ 0.9980 level. The pair
lost about 10 pips last week.
Data released in Canada last week saw February housing starts
rise to 256,900 and the January trade surplus widened to US$
3.2 billion.
Technical Outlook
Last week’s high (1) was just
above the 38.2% retracement of the 1.0378-0.9709 range and
last week’s low (2) was above the 50.0% retracement of the
0.9063-1.0378 range. Upside resistance targets include the
0.9965/ 1.0044/ 1.0122/ 1.0220 levels while downside support
targets include the 0.9752/ 0.9623/ 0.9569/ 0.9482 levels.
AUD
The Australian dollar dollar appreciated vis-à-vis the U.S.
dollar last week as the Aussie tested offers around the US$
0.9470 level and was supported around the US$ 0.9145 level.
The pair gained about 100 pips last week. RBA injected A$
721 million into the financial system last Wednesday. RBA
Governor Stevens predicted inflation will rise above 4.0%
and this fueled expectations regarding additional interest
rate hikes.
Data released in Australia last week saw NAB business confidence
improve to -2 in February; January housing finance was up
2.3% m/m; February ANZ job advertisements were down 2% m/m;
March consumer confidence fell 9.1% to 88.6; the March leading
employment indicator fell to -0.055 from a revised -0.048
in February; and the February unemployment rate fell to 4.0%.
Technical Outlook
Last week’s high (1) was above
the 23.6% retracement of the 0.8511-0.9496 range and last
week’s low (2) was above the 38.2% retracement of the same
range. Upside resistance targets include the 0.9399/ 0.9462/
0.9687/ 1.0052 levels while downside support targets include
the 0.9190/ 0.9060/ 0.8992/ 0.8873 levels.
SCHEDULE
Sunday, 16 March 2008
all times GMT
(last release in parentheses)
2300 NZ February performance of services index
2350 Japan Tertiary industry index (-0.6% m/m)
Monday, 17 March 2008
all times GMT
(last release in parentheses)
0500 Japan January leading economic index (30.0%)
0500 Japan January coincident index (22.2%)
0815 CH January retail sales (1.2% y/y)
1000 Eurozone Q4 employment (0.3% q/q)
1000 Eurozone Q4 employment (1.9% y/y)
1150 Canada European Central Bank members Weber and Noyer
speaks
1230 US Q4 current account balance (-US$ 178.5 billion)
1230 US March Empire State manufacturing index (-11.7)
1230 Canada January manufacturing shipments (-3.4% m/m)
1300 US January net long-term TIC flows (US$ 56.5 billion)
1300 US January total net TIC flows (US$ 60.4 billion)
1315 US February industrial production (0.1%)
1315 US February capacity utilization (81.5%)
1700 US March NAHB housing market index (20)
Tuesday, 18 March 2008
all times GMT
(last release in parentheses)
0030 Australia Reserve Bank of Australia Board minutes
0530 Japan February Tokyo department store sales (-1.6% y/y)
0530 Japan February Nationwide department sales (-2.1% y/y)
0715 CH Q4 industrial production (10.7% y/y)
0800 Germany Revised RWI economic growth forecast
0930 UK February retail price index (-0.5% m/m)
0930 UK February retail price index (4.1% y/y)
0930 UK February RPIX (3.4% y/y)
0930 UK February consumer price index (-0.7% m/m)
0930 UK February consumer price index (2.2% y/y)
0930 UK February core consumer price index (1.3% y/y)
1100 Canada February consumer price index (-0.2% m/m)
1100 Canada February consumer price index (2.2% y/y)
1100 Canada Bank of Canada CPI, core (0.1% m/m)
1100 Canada Bank of Canada CPI, core (1.4% y/y)
1230 US February producer price index (1.0% m/m)
1230 US February producer price index (7.4% y/y)
1230 US February PPI, ex-food and energy (0.4% m/m)
1230 US February PPI, ex-food and energy (2.3% y/y)
1230 US February housing starts (1.012 million)
1230 US February building permits (1.084 million)
1230 US Federal Open Market Committee meeting begins
1700 Luxembourg European Central Bank member Mersch speaks
1815 US Federal Open Market Committee interest rate decision
2300 Germany Revised IWH economic growth forecast
2330 Australia January Westpac leading index (-0.2%)
2350 Japan January all-industry activity index (-0.2% m/m)
Wednesday, 19 March 2008
all times GMT
(last release in parentheses)
0000 Australia March DEWR skilled vacancies (-2.2% m/m)
0030 Australia Q4 dwelling starts (1.3%)
0030 Australia February balance of payments imports (6.0%)
0300 NZ February credit card spending (8.6% y/y)
0900 Italy January industrial orders (-5.4% m/m)
0900 Italy January industrial orders (0.5% y/y)
0900 Italy January industrial sales (0.0% y/y)
0930 UK Bank of England Monetary Policy Committee meeting
minutes
0930 UK February claimant count rate (2.5%)
0930 UK February jobless claims change (-10,800)
0930 UK January average earnings, bonus (3.8%)
0930 UK January ILO unemployment rate (5.2%)
0930 UK January unit wage cost (1.4%)
1000 Eurozone January trade balance (-€4.2 billion)
1000 Eurozone January construction output (-0.6% m/m)
1000 Eurozone January construction output (-3.3% y/y)
1040 Luxembourg European Central Bank member Mersch speaks
1100 UK March CBI industrial trends
1100 US MBA mortgage applications (-1.9%)
1230 Canada January wholesale sales (-2.9% m/m)
Thursday, 20 March 2008
all times GMT
(last release in parentheses)
N/A Eurozone February PMI, services
N/A Eurozone February PMI, manufacturing
0700 Germany February producer prices (0.8% m/m)
0700 Germany February producer prices (3.3% y/y)
0715 CH February trade balance (CHF 1.22 billion)
0800 France March PMI, manufacturing (53.8)
0800 France March PMI, services (58.2)
0815 CH February producer and import prices (0.5% m/m)
0815 CH February producer and import prices (3.7% y/y)
0830 Germany March PMI, manufacturing (54.3)
0830 Germany March PMI, services (52.2)
0900 Eurozone March PMI, manufacturing (52.3)
0900 Eurozone March PMI, services (52.3)
0930 UK February retail sales (0.8% m/m)
0930 UK February retail sales (5.6% y/y)
0930 UK February public sector net cash requirement (-£22.1
billion)
0930 UK February public sector net borrowing (-£14.1 billion
0930 UK February M4 money supply (13.1% y/y)
0930 UK February M4 sterling lending (£21.8 billion)
1230 US Weekly initial jobless claims (353,000)
1230 US Continuing jobless claims
1230 Canada January international securities transactions
1230 Canada February leading indicators (0.2% m/m)
1400 US March Philadelphia Fed index (-24)
1400 US February leading indicators (-0.1%)
2350 Japan Foreign equities and bonds buying
Friday, 21 March 2008
all times G
(last release in parentheses
0700 Japan February convenience store sales (-1.6% y/y)
0745 France February consumer spending (-1.2% m/m)
0745 France February consumer spending (2.2% y/y)
0745 France Q4 wages (0.3% q/q)
0830 Italy March consumer confidence
0900 Italy January retail sales (0.1% m/m)
0900 Italy January retail sales (-0.6% y/y)
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