Weekly Market Watch

Released 06 April 2015 - WeeklyNewsletter

Last week recap

Continued its rally last week as the Eurozone reported mostly better than expected economic data and the United States reported the lowest Non-Farm Payrolls number since December of 2013. The week began on a soft note, with the pair declining despite German Preliminary CPI increasing +0.5% m/m compared to +0.4% expected and Spanish Flash CPI, which declined -0.7% versus -1.0% expected. U.S. data had Pending Home Sales increase +3.1% m/m, significantly higher than the +0.5% that was expected. The rate extended its losses on Tuesday, making its weekly low of 1.0712 as uncertainty over Greece — which is due to make a payment to the IMF on April 9th — pressured the Euro. Economic numbers had German Retail Sales decline -0.5% m/m versus -0.9% expected, and Eurozone CPI Flash Estimate, which declined -0.1% y/y compared to an expected drop of -0.3%. Also, the Eurozone Unemployment Rate dropped to 11.3% from 11.4% versus an expected decline to 11.2%. Tuesday’s U.S. data had CB Consumer Confidence print at 101.3 versus an expected reading of 96.6. On Wednesday, the pair consolidated at a slightly higher level after U.S. ADP Non-Farm Employment Change dropped to 189K from a previous 214K with expectations of 227K, while U.S. ISM Manufacturing PMI printed at 51.5 compared to 52.5 anticipated. The rate then gained on Thursday after the ECB Monetary Policy Meeting Accounts noted that, “Since the Governing Council’s previous monetary policy meeting on 21-22 January 2015, the announcement of the ECB’s expanded asset purchase programme (APP) had had a significant impact on euro area financial markets, contributing to lower government bond yields and money market rates, particularly at longer maturities, while the euro had depreciated further against the US dollar especially in the days leading up to the meeting.” Thursday’s U.S. numbers had the Trade Balance show a deficit of -35.4B compared to -41.3B expected, while Initial Jobless Claims declined to 268K versus 286K expected. The pair then made its weekly high of 1.1026 on Friday after a dismal U.S. Non-Farm Payrolls number, which showed only +126K jobs added in March, roughly half the expected +246K that was expected with the previous number downwardly revised from +295K to +264K. The U.S. Unemployment Rate held steady at 5.5%. EUR/USD went on to close at 1.0966, with an overall gain of +0.8% from its previous weekly close.
Dropped a fraction last week as Japan reported mostly lower than expected economic data and with mixed numbers out of the United States. The week began on a strong note, with the pair rallying on Monday after Japanese Preliminary Industrial Production declined -3.4% m/m compared to an expected decline of -1.8%. The rate made its weekly high of 120.36 on Tuesday after a favourable U.S. consumer confidence number and after the Japanese Tankan Manufacturing Index printed at 12 compared to 14 expected, while the Tankan Non-Manufacturing Index came out at 19 versus an expected reading of 17. The pair then declined on Wednesday after lower than expected U.S. ADP Non-Farm Employment Change and ISM Manufacturing PMI numbers. Thursday saw the rate consolidate at a slightly higher level after positive U.S. Trade Balance and employment numbers. The pair then made its weekly low of 118.71 on Friday after a dismal U.S. Non-Farm Payrolls number. USD/JPY went on to close at 118.94, with an overall decline of 0.1% for the week.
Gained a fraction last week as both countries reported mixed economic data. The week began with Cable gaining declining on Monday after UK Net Lending to Individuals increased +2.5 m/m as widely anticipated. The pair then gained ground on Tuesday after the UK Current Account came out at -25.3B compared to -21.2B expected, while UK Final GDP increased +0.6% q/q versus +0.5% expected. On Wednesday, the pair consolidated after making its weekly low of 1.4739 as UK Manufacturing PMI printed at 54.4, in line with expectations, while the United States reported lower than expected employment and PMI numbers. Cable then gained a fraction on Thursday after UK Construction PMI printed at 57.8 compared to an expected reading of 59.7. The pair then rallied sharply on Friday after a lower than expected U.S. Non-Farm Payrolls number. GBP/USD went on to close at 1.4909, with a gain of +0.2% for the week.
Continued its slide last week as traders priced in a possible rate cut for this week’s RBA meeting and with very little significant economic data out of Australia. The week began with the pair dropping sharply on Monday after making its weekly high of 0.7746 as the United States reported a better than expected Pending Home Sales number. The rate continued lower on Tuesday after a strong U.S. consumer confidence number. The pair extended its losses on Wednesday despite Australian Building Approvals, which declined -3.2% m/m compared to an expected decline of -3.8%, and despite weaker than expected U.S. employment and manufacturing PMI data. On Thursday, the rate made its weekly low of 0.7532 after the Australian Trade Balance showed a deficit of -1.26B, which was in line with expectations. The pair then rallied sharply on Friday, recovering some of its weekly losses after a dismal U.S. Non-Farm Payrolls number. AUD/USD closed at 0.7628, with an overall loss of -1.6% from its previous weekly close.
Reversed direction, dropping sharply last week as Canada reported better than expected economic data and with mixed numbers out of the United States. The week began with the pair gaining ground after a positive U.S. housing number and despite Canadian RMPI, which increased +6.1% m/m compared to an expected increase of +5.1%. On Tuesday, the rate consolidated after making its weekly high of 1.2783 after Canadian GDP declined -0.1% m/m versus an expected increase of +0.2%. Wednesday saw the rate extend its losses as the United States reported lower than expected manufacturing PMI and employment numbers. The pair continued selling off on Thursday after the Canadian Trade Balance showed a deficit of -1.0B, half the expected deficit of -2.0B with the previous number significantly revised down from -2.5B to -1.5B. The pair then made its weekly low of 1.2428 on Friday after a lower than expected U.S. Non-Farm Payrolls number. USD/CAD closed at 1.2480, with an overall weekly decline of -1.0%.
Continued treading water last week, showing very little change as both countries reported mixed economic data. The week began with the pair declining on Monday after New Zealand Building Consents declined -6.3% m/m versus a previous decline of -3.8% downwardly revised to -4.6%. The rate continued south on Tuesday after New Zealand ANZ Business Confidence printed at 35.8 compared to a previous reading of 34.4. On Wednesday, the pair made its weekly low of 0.7389 after the New Zealand GDT Price Index declined -10.8% versus a previous reading of -8.8%. The rate then gained ground on Thursday despite a better than expected U.S. Trade Balance and Initial Jobless Claims numbers. The pair made its weekly high of 0.7628 on Friday after a lower than expected U.S. Non-Farm Payrolls number. NZD/USD went on to close at 0.7567, with an increase of just 7 pips and virtually unchanged on the week.

The week ahead

AUD The Australian economic calendar is moderately active this coming week, featuring the RBA’s Cash Rate Decision on Tuesday. Sunday is a Bank Holiday, and Monday is quiet, so Tuesday starts the week’s highlights off with Retail Sales (0.4%), ANZ Job Advertisements (0.9%), the RBA’s Cash Rate Decision (2.25%), and the RBA Rate Statement. Wednesday and Thursday are quiet, and Friday’s important data then concludes the week with Home Loans (3.1%). Resistance for AUD/USD is seen at 0.7684/0.7756, 0.7846/75 and 0.7912/37, with support noted at 0.7625/43, 0.7559 and 0.7532.

CAD The Canadian economic calendar is busier than usual this coming week, featuring key jobs data on Friday. Monday starts the week’s highlights off with Ivey PMI (51.1) and the BOC Business Outlook Survey, while Tuesday and Wednesday are quiet. Thursday’s key events then include Building Permits (5.1%) and the NHPI (0.1%), and Friday’s important data then concludes the week with the Employment Change (0.1K) and the Unemployment Rate (6.8%). Resistance for USD/CAD is seen at 1.2772/1.2822, 1.2662/96 and 1.2563/1.2619, while support shows at 1.2428/48, 1.2351/1.2409 and 1.2045.

EUR The Eurozone economic calendar is fairly quiet this coming week, featuring Spanish Employment Change data on Monday. Monday is a Bank Holiday in France, Germany and Italy, and it starts the week’s highlights off with the Spanish Unemployment Change (-18.3K). Tuesday’s key events then include Spanish Services PMI (56.5) and Italian Services PMI (51.1), and Wednesday offers German Factory Orders (1.5%) and EZ Retail Sales (-0.1%). That concludes the week’s important events since Thursday and Friday are quiet. Resistance for EUR/USD is seen at 1.1097/1.1159 and 1.1026/52, with support showing at 1.0906, 1.0762/1.0800 and 1.0712.

GBP The UK economic calendar is rather active this coming week, featuring the MPC’s Official Bank Rate Decision on Thursday. Monday is a Bank Holiday, so Tuesday starts the week’s highlights off with the Halifax HPI (7th-8th April, -0.3%) and Services PMI 57.1. Wednesday’s key events then include the BOE Credit Conditions Survey, while Thursday offers the Trade Balance (-9.1B), the Official Bank Rate Decision (unchanged at 0.50%), the Asset Purchase Facility (unchanged at 375), and the tentatively scheduled MPC Rate Statement. Friday’s important data then concludes the week with Manufacturing Production (0.4%) and the NIESR GDP Estimate (0.6%). Resistance to the topside for GBP/USD shows at 1.5222, 1.5033/1.5164 and 1.4950/93, while support for the pair is expected at 1.4795, 1.4698/1.4739 and 1.4634.

JPY The Japanese economic calendar is rather peaceful this coming week, only featuring the Current Account (0.61T), the tentatively scheduled BOJ Monetary Policy Statement and the tentatively scheduled BOJ Press Conference on Wednesday. Resistance for USD/JPY currently shows up at 121.84/122.02, 120.36/121.19 and 119.28/62, with support indicated at 118.04/71, 116.87/92 and 115.56/85.

NZD The New Zealand economic calendar is has no notable data due out this coming week, and Sunday is a Bank Holiday in New Zealand. The chart for NZD/USD shows resistance at 0.7847/88, 0.7679/95 and 0.7628/59. On the downside, technical support is expected at 0.7542/72, 0.7430/92 and 0.7389.

USD The U.S. economic calendar is relatively quiet this coming week, featuring the FOMC Meeting Minutes on Wednesday. Monday starts the week’s highlights off with a speech by FOMC Member Dudley and ISM Non-Manufacturing PMI (56.6), and Tuesday’s key events include JOLTS Job Openings (5.01M). Wednesday then offers another speech by FOMC Member Dudley, plus Crude Oil Inventories (last 4.8M) and the FOMC Meeting Minutes, while Thursday features Weekly Initial Jobless Claims (281K). Friday’s important events then conclude the week with a speech by FOMC Member Lacker and Import Prices (-0.4%).


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