On the docket for this week
Sunday, May 4, 2014
Tweet
Taking a glance at our calendar, we can notice the more important news events for the week. The main events this week are:
Monday: (Saturday = CNY Non-Manuf. PMI beat expectations, Sunday = JPY vacation + AUD AIG Services Index), JPY Holiday (Children's Day) + UK Holiday + Eurogroup Meeting, AUD Building Permits, CNY HSBC Manuf. PMI, EU PPI (bearish expectation), US ISM Non-Manuf. (bullish expectation)
Tuesday: JPY Greenery Day, AU Trade Balance + RBA Decision, GER Markit PMI, EU Markit PMI, UK Markit PMI (bullish expectation), EU retail Sales (bearish expectation), US Trade Balance (bullish expectation), CAD Ivey PMI, NZD Unemployment Rate (bullish expectations)
Wednesday: AU retail sales, CNY HSBC PMIs, German Factory Orders, CAD Building Permits, US Yellen's Speech
Thursday: Victory Day in France, AUD Unemployment, CNY Trade Balance, GER Ind. Prod., UK BoE decision, EUR ECB Decision, Cad Housing Starts, US Jobless Claims, US Bullard's speech, NZD House price index
Friday: AUD RBA Policy Statement, CNY CPI, GER Trade Balance + Current Account, UK Ind. Prod. + Manuf. Prod. + Trade Balance, CAD Unemployment
Sentiment Analysis on Relevant Assets
Going into the week, remember the local holidays in Japan (Monday,Tuesday) and UK (Monday) which will affect liquidity. We will also need to factor in the better Chinese data released over the weekend and pay attention to Yellen's speech – even though it shouldn't be a game changer. We will be seeing the RBA, the BoE and the ECB in action this week and the most important is probably the ECB. According to the recent forward guidance on interest rates, two factors can trigger an action from the ECB: lower inflation expectations and tensions in financial markets. The ECB might have recently added a third trigger: the low level of inflation data. The April introductory statements to the press conference reported, indeed, that “the Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation”. However, inflation data during April was not too bad, so the ECB will probably still stay on hold.
NZD: sentiment is positive. As we have reported in the COT analysis, NZD is quite a crowded trade. It has been performing well but the longer this trend lasts, the more positive surprises we will need in order to keep it inflated. This week NZD is releasing employment data and it will need to be good to keep Kiwi's trend in place.
GBP: sentiment is positive. Sterling is quite sturdy and even the COT data would allow for further gains. Last week GBP shrugged off poor construction data and this week we have many possible catalysts for a further rally: PMI reports, industrial production, trade balance and also the BoE.
USD: sentiment is negative. Clearly, the market was not impressed by the NFP report. The devil is in the details: the good numbers were a by-product of a record low participation rate. So NFP was definitely not a game-changer and Yellen will probably remind everyone of this next week. Finally, the fact that the 30Year treasuries have broken above their recent range (which means yields remain low) will help keep the lid on the USD. This week there is only the ISM report for the greenback and not much else to spur volatility.
Taking a glance at our calendar, we can notice the more important news events for the week. The main events this week are:
Monday: (Saturday = CNY Non-Manuf. PMI beat expectations, Sunday = JPY vacation + AUD AIG Services Index), JPY Holiday (Children's Day) + UK Holiday + Eurogroup Meeting, AUD Building Permits, CNY HSBC Manuf. PMI, EU PPI (bearish expectation), US ISM Non-Manuf. (bullish expectation)
Tuesday: JPY Greenery Day, AU Trade Balance + RBA Decision, GER Markit PMI, EU Markit PMI, UK Markit PMI (bullish expectation), EU retail Sales (bearish expectation), US Trade Balance (bullish expectation), CAD Ivey PMI, NZD Unemployment Rate (bullish expectations)
Wednesday: AU retail sales, CNY HSBC PMIs, German Factory Orders, CAD Building Permits, US Yellen's Speech
Thursday: Victory Day in France, AUD Unemployment, CNY Trade Balance, GER Ind. Prod., UK BoE decision, EUR ECB Decision, Cad Housing Starts, US Jobless Claims, US Bullard's speech, NZD House price index
Friday: AUD RBA Policy Statement, CNY CPI, GER Trade Balance + Current Account, UK Ind. Prod. + Manuf. Prod. + Trade Balance, CAD Unemployment
Sentiment Analysis on Relevant Assets
Going into the week, remember the local holidays in Japan (Monday,Tuesday) and UK (Monday) which will affect liquidity. We will also need to factor in the better Chinese data released over the weekend and pay attention to Yellen's speech – even though it shouldn't be a game changer. We will be seeing the RBA, the BoE and the ECB in action this week and the most important is probably the ECB. According to the recent forward guidance on interest rates, two factors can trigger an action from the ECB: lower inflation expectations and tensions in financial markets. The ECB might have recently added a third trigger: the low level of inflation data. The April introductory statements to the press conference reported, indeed, that “the Governing Council is unanimous in its commitment to using also unconventional instruments within its mandate in order to cope effectively with risks of a too prolonged period of low inflation”. However, inflation data during April was not too bad, so the ECB will probably still stay on hold.
NZD: sentiment is positive. As we have reported in the COT analysis, NZD is quite a crowded trade. It has been performing well but the longer this trend lasts, the more positive surprises we will need in order to keep it inflated. This week NZD is releasing employment data and it will need to be good to keep Kiwi's trend in place.
GBP: sentiment is positive. Sterling is quite sturdy and even the COT data would allow for further gains. Last week GBP shrugged off poor construction data and this week we have many possible catalysts for a further rally: PMI reports, industrial production, trade balance and also the BoE.
USD: sentiment is negative. Clearly, the market was not impressed by the NFP report. The devil is in the details: the good numbers were a by-product of a record low participation rate. So NFP was definitely not a game-changer and Yellen will probably remind everyone of this next week. Finally, the fact that the 30Year treasuries have broken above their recent range (which means yields remain low) will help keep the lid on the USD. This week there is only the ISM report for the greenback and not much else to spur volatility.
Labels:
Daily Market Recaps Articles
