Time | Country | Event | Period | Previous value | Forecast |
---|---|---|---|---|---|
00:00 | U.S. | FOMC Member Rosengren Speaks | |||
01:30 | Australia | RBA Meeting's Minutes | |||
04:30 | Japan | Tertiary Industry Index | February | 0.4% | |
08:30 | United Kingdom | Average earnings ex bonuses, 3 m/y | February | 3.4% | 3.4% |
08:30 | United Kingdom | Average Earnings, 3m/y | February | 3.4% | 3.5% |
08:30 | United Kingdom | ILO Unemployment Rate | February | 3.9% | 3.9% |
08:30 | United Kingdom | Claimant count | March | 27 | 20 |
09:00 | Eurozone | Construction Output, y/y | February | -0.7% | 2% |
09:00 | Eurozone | ZEW Economic Sentiment | April | -2.5 | -9.5 |
09:00 | Germany | ZEW Survey - Economic Sentiment | April | -3.6 | 1 |
12:30 | Canada | Foreign Securities Purchases | February | 28.4 | |
12:30 | Canada | Manufacturing Shipments (MoM) | February | 1% | 0.4% |
13:15 | U.S. | Capacity Utilization | March | 79.1% | 79.1% |
13:15 | U.S. | Industrial Production YoY | March | 3.6% | |
13:15 | U.S. | Industrial Production (MoM) | March | 0.0% | 0.2% |
14:00 | U.S. | NAHB Housing Market Index | April | 62 | 63 |
18:00 | U.S. | FOMC Member Kaplan Speak | |||
22:45 | New Zealand | CPI, y/y | Quarter I | 1.9% | 1.7% |
22:45 | New Zealand | CPI, q/q | Quarter I | 0.1% | 0.3% |
23:50 | Japan | Trade Balance Total, bln | March | 339 | 310 |
Time | Country | Event | Period | Previous value | Forecast |
---|---|---|---|---|---|
00:00 | U.S. | FOMC Member Rosengren Speaks | |||
01:30 | Australia | RBA Meeting's Minutes | |||
04:30 | Japan | Tertiary Industry Index | February | 0.4% | |
08:30 | United Kingdom | Average earnings ex bonuses, 3 m/y | February | 3.4% | 3.4% |
08:30 | United Kingdom | Average Earnings, 3m/y | February | 3.4% | 3.5% |
08:30 | United Kingdom | ILO Unemployment Rate | February | 3.9% | 3.9% |
08:30 | United Kingdom | Claimant count | March | 27 | 20 |
09:00 | Eurozone | Construction Output, y/y | February | -0.7% | 2% |
09:00 | Eurozone | ZEW Economic Sentiment | April | -2.5 | -9.5 |
09:00 | Germany | ZEW Survey - Economic Sentiment | April | -3.6 | 1 |
12:30 | Canada | Foreign Securities Purchases | February | 28.4 | |
12:30 | Canada | Manufacturing Shipments (MoM) | February | 1% | 0.4% |
13:15 | U.S. | Capacity Utilization | March | 79.1% | 79.1% |
13:15 | U.S. | Industrial Production YoY | March | 3.6% | |
13:15 | U.S. | Industrial Production (MoM) | March | 0.0% | 0.2% |
14:00 | U.S. | NAHB Housing Market Index | April | 62 | 63 |
18:00 | U.S. | FOMC Member Kaplan Speak | |||
22:45 | New Zealand | CPI, y/y | Quarter I | 1.9% | 1.7% |
22:45 | New Zealand | CPI, q/q | Quarter I | 0.1% | 0.3% |
23:50 | Japan | Trade Balance Total, bln | March | 339 | 310 |
The Bank of Canada (BoC) reported on Monday its Business Outlook Survey indicator fell from a strongly positive level in the winter survey and is now slightly negative, suggesting a softening in business sentiment.
Analysts at BNP Paribas note that China’s economic growth continues to slow, with an export outlook severely darkened by the U.S. tariff increases.
Walt Disney (DIS) target raised to $139 at Imperial Capital
The report from the New York Federal Reserve showed on Monday that manufacturing activity in the New York region expanded in April at a slower pace than in March.
According to the survey, NY Fed Empire State manufacturing index stood at 10.10 this month compared to an unrevised 3.70 in March. That was the highest reading since December 2018.
Economists had expected the index to come in at 6.70.
Anything below zero signals contraction.
The new orders index increased five points to 7.5, indicating orders picked up slightly in April. The shipments index rose one point to 8.6, pointing to continued modest growth in shipments. The delivery times and inventories measures also both increased. At the same time, the unfilled orders index was little changed, and the index for number of employees edged down two points to 11.9, but continued to point to ongoing employment gains. On the price front, the prices paid index fell seven points to 27.3 and the prices received index declined four points to 14.0, indicating that both input price increases and selling price increases slowed.
Trade talks will not be easy but would benefit both sides
Analysts at TD Securities say they expect the NY Empire manufacturing index has recovered some of the lost ground in March, rising from 3.7 to 8.0 in April.
“Despite twin declines in new orders and shipments in March, the ISM-adjusted series appears to have stabilized. Any improvements in these measures could likely preclude another constructive print in the next ISM release,” they note.
Iris Pang, economist at ING, is forecasting that China’s GDP growth at 6.2%YoY in 1Q19, which will be lower than 6.4%YoY in 4Q18, which is better than the government's lower bound target of 6.0%.
“There is a real need to keep credit growth continuing to keep GDP growth above 6%. That's why we still expect a 0.5 percentage point RRR cut in April. But we don't think there is a need for the government to increase fiscal stimulus as growth should continue to increase in 2019 when money is put into infrastructure production and so long as monetary easing continues.”
Yuan exchange rate is stable overall
Expectation of the financial market has improved
Central bank to strike a balance in prudent monetary policy
Will keep monetary policy not too tight nor too loose
Will not implement flood-like stimulus
Will fend off systemic financial risks
Greg Gibbs, analyst at Amplifying Global FX Capital, points out that the market is still waiting on news from the US-China trade talks and global policymakers have blamed the US-China trade dispute for undermining global trade and manufacturing activity over the last six months or so.
“The uncertain trade environment is thought to be dampening business confidence globally and delaying investment decisions. There are market doubts that a US-China trade deal will be durable. The market also worries that even if the US and China resolve their trade dispute, the US administration will continue to use threats of tariffs against other trading partners, in particular, Europe. Japan and the US are also expected to begin trade talks this week. Nevertheless, it is possible that a US-China trade deal will be agreed soon, both parties have claimed to have made considerable progress.”
Expects first SNB rate hike at the start of 2020, similar to that of the ECB
CHF still overvalued, further strength poses danger for further slowdown in Swiss economy
Rate hikes by SNB, ECB will likely be reflected by rising yields towards end-2019
Rates to remain historically 'very low' for next few years even after 2020
Initial rate hike unlikely to trigger panic in the bond market
Expects long-term yields to rise in a fairly mild manner
Karen Jones, analyst at Commerzbank, points out that the EUR/GBP cross has continued to consolidate at the 55 day ma, currently at 0.8641 and is somewhat stuck at this zone.
“A close above here would allow for a test of the recent high at 0.8723 and 0.8825 (200 day ma). It continues to hold the 0.8471 recent low and we suspect might be trying to base near term. Currently though we remain unable to rule out the risk of a slide to the 200 week ma at 0.8419 (although this is less favoured). The market is expected to struggle on rallies to the 200 day ma at 0.8825, and only above here allows for a move to the October 0.8941 high.”
European Union countries gave final clearance on Monday to start formal trade talks with the United States after months of delay due to resistance from France.
The EU governments voted by a clear majority to approve the negotiating mandates proposed by the European Commission, with France voting against and Belgium abstaining.
The European Commission, which coordinates trade policy for the 28-member EU, wants to start negotiations on two tracks -- one to cut tariffs on industrial goods, the other to make it easier for companies to show products meet EU or U.S. standards.
The best investment opportunities may be thousands of miles away, according to a major Wall Street firm. That is, the upside potential is larger in Europe and Asia than in the US, Medley Global Advisors’ Ben Emons told.
Emons said he’s worried an improving economic picture may prompt the Fed to begin raising interest rates. “The biggest risk is that people have a very benign view that there will be no rate hikes from here. Although the Fed will hold and will continue to communicate that, doesn’t mean that they cannot hike in the future given where the economy is today. It shows strength. It continues to have an upward trend in GDP. There is no risk of recession.” the firm’s managing director said.
According to Emons, investors will get a bigger bang for their buck in the United Kingdom, where Brexit risks are creating jitters and pressuring the market. For investors who have a larger risk tolerance, he said he sees China and smaller Asian economies such as [South] Korea and Malaysia posting big gains.
Analysts at Nordea Markets maintain their bullish bias on the EUR/USD pair in the near-term, citing that ‘we have highlighted the green shoots globally for a while now', and we judge that an Asian rebound is better news for EUR than USD.”
“Combination of a triple-dovish Fed (QT, rates, inflation overshooting) … the rise in oil prices has prompted a substantial drop in US real rates. Drop in US real rates have also helped beget more expansionary financial conditions in EM Asia. The upturn in Chinese monetary growth in March offers psychological support for the green shoots narrative. Hence we go long EUR/USD, Target 1.1650 and consider a stop/loss 1.1187.”
The Swiss National Bank could reduce its already ultra-low interest rates again if the situation warrants, President Thomas Jordan said.
With a deposit rate of minus 0.75 percent, the SNB has already enacted the lowest interest rate of any major central bank. That tool is designed to keep pressure off the franc. Still, the Swiss currency hit a 20-month high against the euro at the end of March, and a no-deal Brexit or political turmoil in Italy could intensify appreciation pressure.
“We always stress the point that we have room to lower interest rates still further” and intervene in foreign exchange markets, Jordan said. “So we have the policy space to use both instruments but of course they have to be a reaction to the economic situation.”
Switzerland is expected to expand about 1.5 percent this year, a forecast Jordan confirmed. “Both instruments are highly effective at this moment and they will remain key parameters of our monetary policy for the time being,” he said.
“Turkey faces a number of challenges, and one of them is that the central bank needs to be fully independent so it can continuously assess and tighten policies as circumstances change in a forward-looking manner,” Poul Thomsen, director of the International Monetary Fund’s Europe department, told.
“So we welcome the increase we’ve seen in interest rates in the last six to seven months, but it’s important that the Turkish central bank be allowed to be fully independent in its assessment of monetary policy in addition to a number of other challenges on fiscal policy, and more transparency.”
Turkey’s economy is already in recession, rocked last year after fears over government interference into central bank independence, over-leveraged banks, a large current account deficit and a diplomatic spat with the U.S. triggered investor and capital flight. Moody’s expects the Turkish economy to contract by 2% in 2019.
A growing number of large British-based businesses are prioritising cashflow, fearing a downturn, as their view of the long-term economic impact of Brexit has darkened to its most negative so far, accountancy firm Deloitte said.
Some 81% of chief financial officers surveyed expect Brexit to lead to a long-term deterioration in Britain's business environment, the highest since the question was first asked at the time of June 2016's referendum on leaving the EC. This was up from 78% at the end of last year in the quarterly survey of 89 companies, including 15 in the FTSE 100 and 33 in the FTSE 250 share index, plus smaller firms and subsidiaries of major foreign companies. Deloitte carried out the survey between March 26 and April 7.
Most large businesses now expect the BoE to keep interest rates on hold over the coming year. The Deloitte survey showed the proportion of CFOs expecting one or more interest rate rises in the next 12 months dropped to 40% from 58% at the end of 2018.
Analysts at Danske Bank suggest that after better-than-expected Chinese and euro area data triggered a sell-off in global bond markets on Friday, markets will pay close attention to a range of sentiment indicators released on both sides of the Atlantic later this week.
“Today we start the week in a somewhat quiet fashion , with the US Empire Manufacturing index the only data release of interest. The US manufacturing sector has not been immune to the global slowdown and we will look to see whether the April figure points to any trend reversal. On the political front, EU ministers are expected to vote today on approving the negotiating mandate for the Commission to start trade talks with the US . With cracks in the EU's united front not only showing with regard to the Brexit strategy, focus will be on whether France openly opposes the start of the negotiations.”
According to the report from Federal Statistical Office (FSO), the Producer and Import Price Index increased in March 2019 by 0.3% compared with the previous month, reaching 102.2 points (December 2015 = 100). The rise is due in particular to higher prices for petroleum products. Compared with March 2018, the price level of the whole range of domestic and imported products fell by 0.2%.
Rising prices compared to the previous month were registered in the Producer Price Index, especially for petroleum products. Expensive was also scrap. Falling prices, however, showed other food.
The rise in the import price index compared to February 2019 was also primarily attributable to petroleum products. Higher prices also showed non-ferrous metals and their products, clothing, oil and natural gas. On the other hand, computers and pharmaceutical specialties became cheaper.
Japan should rely primarily on raising the sales tax to generate extra revenue, and may need to raise it to as high as 26% to achieve a large primary surplus, the Organisation for Economic Cooperation and Development (OECD) said.
The national sales tax is scheduled to rise to 10% in October, from 8% now to help pay for rising healthcare costs.
"The Bank of Japan should remain focused on achieving its 2% inflation target, but there are signs its purchases of exchange-traded funds (ETFs) are distorting the stock market. Policymakers need to curb healthcare spending and raise revenue to pay down debt, but this could decrease the chance of fostering sustainable inflation," the OECD said in an economic survey of Japan.
"Japan's spending on welfare and healthcare has doubled to 22% of GDP from 11% of GDP over the past 25 years, which is why increasing revenue is an urgent task, The country's outstanding government debt is more than twice the size of its $5 trillion economy, another reason Japan needs to pursue fiscal discipline." the OECD said.
The head of the Asian Development Bank (ADB) said that regional economies in Asia were sustaining solid growth led by domestic demand and the services sector despite some negative effects of the Sino-U.S. trade war.
Trade friction between the world's two largest economies is impeding growth in China, ADB President Takehiko Nakao told.
"It's natural for the Chinese economy to slow," said Nakao, a former Japanese vice finance minister for international affairs.
EUR/USD
Resistance levels (open interest**, contracts)
$1.1404 (3702)
$1.1384 (2492)
$1.1361 (193)
Price at time of writing this review: $1.1308
Support levels (open interest**, contracts):
$1.1273 (3382)
$1.1235 (3254)
$1.1192 (2934)
Comments:
- Overall open interest on the CALL options and PUT options with the expiration date May, 3 is 70937 contracts (according to data from April, 12) with the maximum number of contracts with strike price $1,1500 (5941);
GBP/USD
Resistance levels (open interest**, contracts)
$1.3320 (2059)
$1.3244 (1176)
$1.3189 (929)
Price at time of writing this review: $1.3095
Support levels (open interest**, contracts):
$1.3030 (1370)
$1.2964 (1341)
$1.2883 (1711)
Comments:
- Overall open interest on the CALL options with the expiration date May, 3 is 20763 contracts, with the maximum number of contracts with strike price $1,3500 (2471);
- Overall open interest on the PUT options with the expiration date May, 3 is 19928 contracts, with the maximum number of contracts with strike price $1,2600 (2560);
- The ratio of PUT/CALL was 0.96 versus 0.98 from the previous trading day according to data from April, 12
* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.
** - Open interest takes into account the total number of option contracts that are open at the moment.
Pare | Closed | Change, % |
---|---|---|
AUDUSD | 0.71689 | 0.63 |
EURJPY | 126.532 | 0.7 |
EURUSD | 1.1297 | 0.36 |
GBPJPY | 146.364 | 0.43 |
GBPUSD | 1.30683 | 0.12 |
NZDUSD | 0.67596 | 0.48 |
USDCAD | 1.33262 | -0.35 |
USDCHF | 1.00229 | -0.04 |
USDJPY | 111.993 | 0.34 |
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