News
and Media
WEEKLY MARKET RECAP,
WEEK AHEAD, AND SCHEDULE
Mandus Invest SA. | 23, March, 2008
/ Sunday
EURO
The euro depreciated vis-a-vis the U.S. dollar last week
as the single currency tested offers around the $1.5405 level
and was capped around the $1.5905 level. The pair lost about
220 pips last week. The Fed announced new extraordinary measures
including a Primary Dealer Credit Facility to provide more
liquidity to more market participants. JPMorgan Chase purchased
Bear Stearns for 1% of the value it traded at three weeks
ago. The FOMC reduced the federal funds target rate by 75bps
to 2.25% and lowered the discount rate by 75bps to 2.50%.
The Fed’s policy statement was on the dovish side and traders
are already talking about the 30 April FOMC meeting. G7 policymakers
convene in Washington, D.C. on 11 April. Commercial and investment
banks tapped the Fed’s credit facilities for tens of billions
of dollars.
ECB’s Liebscher said “Everything must be done to avoid exaggerated
exchange rate fluctuations.” Germany’s RWI institute reaffirmed
its 2008 GDP growth forecast of 1.7%. ECB’s Weber called for
more transparency in the disclosure of write-downs.
Data released in the U.S. last week saw February industrial
production fell 0.5% with capacity utilization at 80.9%; January
monthly net purchases by overseas investors were only US$
37.4 billion with net foreign purchases of long-term securities
at –US$ 19.2 billion; the March Empire State manufacturing
index fell to -22.23; the Q4 current account deficit narrowed
to US$ 172.9 billion from a revised US$ 177.4 billion in Q3;
February housing starts fell 0.6% while February building
permits fell 7.8%; February headline PPI was up 0.3% m/m and
6.4% y/y with core up 0.5% m/m and 2.4% y/y; the February
consumer confidence index fell 0.3%; the Philly Fed March
index rose to -17.4; weekly initial jobless claims were up
22,000 to 378,000; and continuing jobless claims rose 32,000
to 2.865 million.
Data released in the eurozone last week saw Q4 employment
up 0.2% q/q and 1.7% y/y; the EMU-15 trade deficit printed
at -€10.7 billion; the EMU-15 PMI services survey fell to
51.7; the EMU-15 PMI manufacturing survey fell to 52.0; and
French consumer spending rose 1.2% m/m and 3.7% 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 1.4309-1.5903 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-a-vis the U.S. dollar last week as
the greenback tested offers around the Y99.95 level and was
supported around the Y95.70 level. The pair gained about 35
pips last week. The Nikkei 225 stock index gained 1.81% on
Friday to close at Y12,482.57. MoF’s Nukaga and Tsuda verbally
intervened against the yen’s strength. Opposition lawmakers
rejected BoJ Governor compromise candidate Tanami. New BoJ
Deputy Governor Shirakawa will be the acting Governor of the
BoJ until a suitable replacement for Fukui can be agreed.
The government downgraded its assessment of the economy for
the second consecutive month, citing stagnant industrial production
and capital spending and weakening private consumption.
Data released in Japan this week saw the January leading
index was upwardly revised to 36.4 and the demand-supply gap
printed at +0.7% in the October – December quarter.
In Chinese news, the Chinese yuan appreciated vis-a-vis the
U.S. dollar as the greenback closed at CNY 7.0540 in the over-the-counter
market, down from CNY 7.0894. PBoC’s Zhou said there is still
room to tighten interest rates and reserve requirements. PBoC
lifted the reserve requirement by 50bps to 15.5% effective
25 March. Premier Wen said China is for now keeping its inflation
growth target rate at 4.8%.
Data released in China last week saw February wholesale prices
were up 9.2% y/y and February property prices in 70 major
cities were up 10.9% y/y.
Technical Outlook
Last week’s high (1) was just
below the 23.6% retracement of the 114.65-95.71 range and
last week’s low (2) was a new multi-year low. Upside resistance
targets remain the 100.18/ 102.94/ 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 depreciated vis-a-vis the U.S. dollar last
week as cable tested bids around the US$ 1.9810 level and
was capped around the $2.0270 level. The pair lost about 395
pips last week. BoE executed an extraordinary £5 billion three-day
repo to reduce short-term funding rates. Bid-to-cover ratios
in BoE liquidity auction have been elevated, indicating oversubscription
and heavy demand for liquidity. Rumours abound that BoE officials
were cutting short their Easter holiday to hold emergency
meetings. There were also rumours that HBOS Plc is facing
a liquidity shortfall. Both Gieve and Blanchflower voted for
a 25bps reduction in the repo rate this month.
Data released in the U.K. last week saw London like-for-like
retail sales were up 10.5% y/y in February; February annual
CPI accelerated to +2.5%; CBI’s March monthly industrial trends
survey saw an improvement to +7% in manufacturers reporting
above-normal order books; the February claimant count of unemployment
fell 2,800; February retail sales were up 0.1% m/m and 5.5%
y/y; and CML February gross mortgage lending fell 7% m/m.
Technical Outlook
Last week’s high (1) was just
above the 50.0% retracement of the 2.1159-1.9336 range and
last week’s low (2) was above the 23.6% retracement of the
same range. Upside resistance targets include the 1.9866/
1.9991/ 2.0145/ 2.0395 levels while downside support targets
include the 1.9741/ 1.9618/ 1.9586/ 1.9336 levels.
CHF
The Swiss franc depreciated vis-a-vis the U.S. dollar last
week as the greenback tested offers around the CHF 1.0100
level and was supported around the CHF 0.9645 level. The pair
gained about 100 pips last week. KOF kept its 2008 GDP growth
forecast unchanged at 2.1%. Short franc carry trades continued
to unwind. RBA minutes suggested policy may have been tightened
sufficiently since mid-2007.
Data released in Switzerland last week saw January retail
sales were up 1.3% y/y; Q4 industrial production rose 9.1%
y/y, down from 10.9% y/y in Q3; February producer and import
prices rose 0.2% m/m and 3.6% y/y; and the February trade
surplus rose to CHF 1.55 billion.
Technical Outlook
Last week’s high (1) was right
around the 23.6% retracement of the 1.1594-0.9647 range and
last week’s low (2) was a new multi-decade low. Upside resistance
targets include the 1.0106/ 1.0354/ 1.0478/ 1.0620 levels
while downside support targets include the 0.9638/ 0.9605/
0.9535 levels.
CAD
The Canadian dollar depreciated vis-a-vis the U.S. dollar
last week as the greenback tested offers around the C$ 1.0265
level and was supported around the C$ 0.9855 level. The pair
gained about 350 pips last week.
Data released in Canada last week saw January manufacturing
shipments up 1.3%; headline CPI was up 0.4% m/m and 1.8% y/y
while core CPI was up 0.5% m/m and 1.5% y/y; and January wholesale
trade increased 2.6%; and February leading indicators were
down 0.3%.
Technical Outlook
Last week’s high (1) was above
the 76.4% retracement of the 1.0378-0.9709 range and last
week’s low (2) was below the 23.6% retracement of the same
range. Upside resistance targets include the 1.0378/ 1.0462/
1.0794 levels while downside support targets include the 1.0220/
1.0122/ 1.0044/ 0.9965/ 0.9752 levels.
AUD
The Australian dollar depreciated vis-a-vis the U.S. dollar
last week as the Aussie tested bids around the US$ 0.8985
level and was capped around the US$ 0.9445 level. The pair
lost about 350 pips last week.
Data released in Australia last week saw Q4 housing starts
were up 2.6%; February merchandise goods imports were up 0.3%;
the January Westpac leading index of economic activity fell
0.1% in January; and March skilled vacancies index was off
2.2% m/m in March.
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 just below the 50.0% retracement of the
same range. Upside resistance targets include the 0.9060/
0.9120/ 0/9263/ 0.9399 levels while downside support targets
include the 0.8992/ 0.8873/ 0.8744 levels.
SCHEDULE
Sunday, 23 March 2008
all times GMT
(last release in parentheses)
2350 Japan Q1 BSI large all-industry (0.5% q/q)
2350 Japan Q1 BSI large manufacturing (5.2% q/q)
Monday, 24 March 2008
all times GMT
(last release in parentheses)
0001 UK March Rightmove house prices (3.2% m/m)
0001 UK March Rightmove house prices (5.8% y/y)
0500 Japan February supermarket sales (-1.7% y/y)
0750 Japan 2007 land prices
1400 US Federal Reserve US$ 50 billion Term Auction Facility
1400 US February existing home sales (4.89 million)
1400 US February existing home sales (-0.4% m/m)
Tuesday, 25 March 2008
all times GMT
(last release in parentheses)
0200 NZ February credit card spending (8.6% y/y)
0900 CH February UBS consumption indicator (2.191)
1200 NZ Q1 Westpac consumer confidence (110)
1230 Canada January retail sales (0.6% m/m)
1230 Canada January retail sales, ex-autos (-0.4% m/m)
1400 US March consumer confidence (75.0)
1400 US Richmond Fed manufacturing index (-5)
1400 US January house price index (-0.2% m/m)
2350 Japan February merchandise trade balance
2350 Japan February corporate service price index (0.8% y/y)
Wednesday, 26 March 2008
all times GMT
(last release in parentheses)
0745 France March business confidence indicator (107)
0830 Italy March business confidence (89.8)
0900 Germany March Ifo, business climate (104.1)
0900 Germany March Ifo, current assessment (110.3)
0900 Germany March Ifo, expectations (98.2)
0900 Germany January EMU-15 current account (-€10.3 billion)
0900 Eurozone European Central Bank President Trichet speaks
1000 Eurozone January industrial new orders (-3.6% m/m)
1000 Eurozone January industrial new orders (2.1% y/y)
1100 US MBA mortgage applications
1230 US February durable goods orders (-5.3%)
1230 US February durable goods orders, ex-transportation (-1.6%)
1400 US February new home sales (588,000)
1400 US February new home sales (-2.8% m/m)
1600 US Chicago Fed President Evans speaks
1700 US Dallas Fed President Fisher speaks
2145 NZ February trade balance (-NZ$ 320.0 million)
2145 NZ Q4 current account balance (-NZ$ 5.174 billion)
2300 Australia January leading index (0.2%)
2350 Japan Foreign purchases of equities and bonds
Thursday, 27 March 2008
all times GMT
(last release in parentheses)
N/A Luxembourg European Central Bank member Mersch speaks
0030 Australia February job vacancies (6.0%)
0030 Australia Reserve Bank of Australia Financial Stability
Revie
0130 Japan Bank of Japan Policy Board member Suda speaks
0500 Japan March small business confidence (44.3)
0710 Germany April GfK consume confidence (4.5)
0930 UK Q4 total business investment (-0.5% q/q)
0930 UK Q4 total business investment (1.7% y/y)
0930 UK February BBA house purchase loans
1100 UK March CBI distributive trades report
1215 US Federal Reserve Governor Kroszner speaks
1230 US Q4 GDP, annualized (0.6%)
1230 US Q4 GDP price index (2.7%)
1230 US Q4 personal consumption expenditures (2.7% q/q)
1230 US Weekly initial jobless claims (378,000)
1230 US Continuing jobless claims (2.865 million)
1600 US Cleveland Fed President Pianalto speaks
1600 US Federal Reserve Term Securities Lending Facility
1600 UK Minneapolis Federal Reserve President Stern speaks
1620 US Atlanta Fed President Lockhart speaks
2145 NZ Q4 GDP (0.5% q/q)
2145 NZ Q4 GDP (3.3% y/y)
2330 Japan February jobless rate (3.8%)
2330 Japan February overall household spending (3.6%)
2330 Japan March Tokyo consumer price index (0.4% y/y)
2330 Japan March Tokyo CPI, ex-energy and fresh food (0.1%
y/y)
2330 Japan February consumer price index (0.7% y/y)
2330 Japan February CPI, ex-energy and fresh food (-0.1% y/y)
2330 US Federal Reserve Governor Mishkin speaks
2350 Japan February large retailers’ sales (-2.0%)
2350 Japan February retail trade (0.8% m/m)
2350 Japan February retail trade (1.3% y/y)
Friday, 28 March 2008
all times GMT
(last release in parentheses)
N/A Germany March consumer price index (0.5% m/m)
N/A Germany March consumer price index (2.8% y/y)
N/A Germany March consumer price index, harmonized (0.5% m/m)
N/A Germany March consumer price index, harmonized (2.9% y/y)
0200 NZ February M3 money supply (8.9% y/y)
0700 Germany February import price index (0.8% m/m)
0700 Germany February import price index (5.2% y/y)
0700 UK March Nationwide house prices (-0.5% m/m)
0700 UK March Nationwide house prices (2.7% y/y)
0745 France Q4 GDP (0.3% q/q)
0745 France Q4 GDP (2.1% y/y)
0900 Germany March PMI, retail (52.1)
0930 UK Q4 GDP (0.6% q/q)
0930 UK Q4 GDP (2.9% y/y)
0930 UK Q4 current account (-£20.0 billion)
1030 CH March KOF leading indicator (1.65)
1100 South Africa European Central Bank member Stark speaks
1230 US February personal income (0.3%)
1230 US February PCE deflator (3.7% y/y)
1230 US February PCE, core (0.3% m/m)
1230 US February PCE, core (2.2% y/y)
1230 US February personal spending (0.4%)
1400 US March University of Michigan consumer sentiment (70.5)
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