Weekly Market Watch

Released 31 July 2017 - Weekly Market News

Last week recap



Extended its previous week’s gains last week as the Greenback was pressured by a dovish FOMC Statement, while Greece had its first successful bond auction since 2014. The pair began the week declining on Monday after German Flash Manufacturing PMI printed at 58.3 versus an expectation of 59.1, while EZ Flash Manufacturing PMI showed a reading of 56.8 compared to 57.3 anticipated. The rate consolidated at a slightly higher level on Tuesday after Greece held its first successful bond auction since 2014, with a yield of 4.625% versus 4.95%. Also, the German Ifo Business Climate index printed at 116.0 compared to a consensus of 114.9, the highest reading for the index since 1997. U.S. numbers had U.S. CB Consumer Confidence, which showed a reading of 121.1 versus 116.5 expected. On Wednesday, the pair gained sharply after making its weekly low of 1.1612 as the FOMC left the benchmark Federal Funds Rate unchanged at <1.25% as="" was="" widely="" anticipated.="" the="" statement="" was="" a="" repeat="" of="" the="" may="" statement,="" with="" some="" minor="" exceptions:="" “the="" committee="" expects="" to="" begin="" implementing="" its="" balance="" sheet="" normalization="" program="" relatively="" soon,="" provided="" that="" the="" economy="" evolves="" broadly="" as="" anticipated;="" this="" program="" is="" described="" in="" the="" june="" 2017="" addendum="" to="" the="" committee''s="" policy="" normalization="" principles="" and="" plans.”="" also,="" that="" “job="" gains="" have="" been="" solid”,="" which="" replaced="" “job="" gains="" have="" moderated”="" in="" the="" fomc="" statement="" text.="" the="" rate="" then="" declined="" after="" making="" its="" weekly="" high="" of="" 1.1776="" on="" thursday="" after="" u.s.="" durable="" goods="" orders="" increased="" by="" +6.5%="" m/m,="" almost="" double="" the="" expectation="" of="" +3.5%,="" while="" core="" durable="" goods="" orders="" increased="" by="" +0.2%="" m/m,="" compared="" to="" a="" consensus="" of="" a="" +0.4%="" increase.="" the="" pair="" resumed="" its="" rally="" on="" friday="" despite="" u.s.="" advance="" gdp,="" which="" increased="" by="" +2.6%="" q/q="" versus="" +2.5%="" expected;="" however,="" the="" advance="" gdp="" price="" index="" increased="" by="" only="" +1.0%="" q/q="" versus="" an="" expectation="" of="" +1.3%.="" also,="" german="" preliminary="" cpi="" increased="" by="" +0.4%="" m/m="" versus="" +0.2%="" anticipated.="" eur/usd="" closed="" at="" 1.1746,="" with="" an="" overall="" gain="" of="" +0.7%="" for="" the="" week.="">



Declined for the third consecutive week last week as the Greenback was pressured by a dovish FOMC Statement, while Japan reported mostly better than expected economic data. The week began with the rate gaining on Monday after Japanese Flash Manufacturing PMI printed at 52.2, in line with expectations. The pair continued gaining on Tuesday after the BOJ’s Monetary Policy Meeting Minutes showed members divided on whether to reveal their exit strategy on monetary stimulus to the public. The Minutes noted that, “Several members said providing uncertain information before meeting the inflation target could cause market confusion, so it is important to continue internal analysis on this subject.” The pair then made its weekly high of 112.17 on Wednesday before selling off after a dovish U.S. FOMC Statement. The rate continued declining on Thursday after mixed U.S. Durable Goods Orders data. Friday saw the pair make its weekly low of 110.54 after Japanese Tokyo Core CPI increased by +0.2% y/y versus +0.1% anticipated, also, National Core CPI increased by +0.4% as widely anticipated and the Japanese Unemployment Rate declined to 2.8% from 3.1%, with an expectation of 3.0%. USD/JPY closed at 110.65, with a loss of -0.4% from its previous weekly close.


Rallied last week as the Greenback was pressured by a dovish FOMC Statement and mixed economic numbers with very little significant economic data out of the UK. The week began with Cable gaining after making its weekly low of 1.2988 on Monday as the United States reported a lower than expected Existing Home Sales number. The rate consolidated on Tuesday after a better than expected U.S. CB Consumer Confidence number. On Wednesday, Cable rallied after the release of the dovish FOMC Statement and UK Preliminary GDP, which increased by +0.3% q/q as was widely anticipated; however, the previous release was downwardly revised from +0.3% to +0.2%. Thursday saw the pair decline after making its weekly high of 1.3157 as the United States reported mixed Durable Goods Orders data. Cable then resumed its rally on Friday after mixed U.S. Advance GDP data. GBP/USD closed at 1.3130, with an overall weekly gain of +1.1%.



Extended its gains for the third consecutive week, reaching a level not seen in the rate since May of 2015. The gain in the rate was in part due to rising metal and oil prices, while the FOMC left rates unchanged, but delivered a dovish Statement. The week began on a quiet note, with the rate consolidating on Monday after a lower than expected U.S. Existing Home Sales number. The pair gained a fraction on Tuesday despite better than expected U.S. CB Consumer Confidence data. The rate then made its weekly low of 0.7877 on Wednesday before gaining sharply after the U.S. FOMC Statement, as well as comments from RBA Governor Philip Lowe, who told a meeting of business leaders that, “Elsewhere in the world, some central banks are now starting to increase interest rates and others are considering when to withdraw some of the monetary stimulus that has been put in place, this has no automatic implications for monetary policy in Australia. These central banks lowered their interest rates to zero and also expanded their balance sheets greatly. We did not go down this route. Just as we did not move in lock-step with other central banks when the monetary stimulus was being delivered, we don’t need to move in lock-step as some of this stimulus is removed,” Wednesdays numbers had Australian CPI, which increased by +0.2% q/q versus +0.4% expected, while Trimmed Mean CPI increased by +0.5% q/q, in line with expectations. Thursday saw the pair make its weekly and a two year high of 0.8064 after mixed U.S. Durable Goods Orders data. The rate consolidated at a slightly higher level on Friday after mixed U.S. Advance GDP data, which brought the pair to close at 0.7983, with a gain of +0.9% for the week.


Continued its slide last week as the Greenback was pressured by a dovish FOMC Statement, while Canada reported better than expected economic data. The week began with the pair declining a fraction on Monday after Canadian Wholesale Sales increased by +0.9% m/m versus an expectation of +0.5%. The rate consolidated on Tuesday after a better than anticipated U.S. CB Consumer Confidence number. The pair then made its weekly low of 1.2413 on Wednesday after the FOMC left the Fed Funds Rate unchanged and released a dovish Statement. Thursday saw the rate make its weekly high of 1.2575 after mixed U.S. Durable Goods Orders data. The pair resumed its decline on Friday after Canadian GDP increased by +0.6% m/m, significantly higher than the +0.2% that was expected. USD/CAD closed at 1.2430, with an overall weekly decline of -0.8%.



Gained ground for the third consecutive week last week as the commodity currencies were supported by rising metal and oil prices, while the Greenback was pressured by a dovish FOMC Statement. The rate began the week losing a fraction on Monday despite a lower than expected U.S. housing number. The pair then made its weekly low of 0.7400 on Tuesday after RBNZ Assistant Governor John McDermott said in a speech that, “From a growth point of view, a lower real exchange rate would help rebalance growth towards the tradables sector, especially as not all traded industries are benefiting from the current high terms of trade”. The rate then rallied sharply on Wednesday after the New Zealand Trade Balance showed an expanding surplus of +242M compared to an expectation of +147M. The pair then made its weekly high of 0.7557 on Thursday after mixed U.S. Durable Goods Orders data. Friday saw the rate gain a fraction after mixed U.S. Advance GDP numbers. NZD/USD closed at 0.7508, with a gain of +0.8% from its previous weekly close.

The week ahead

AUD The Australian economic calendar is somewhat active this coming week, featuring the RBA Rate Statement and the RBA’s Cash Rate Decision (unchanged at 1.50%) that start the week’s highlights off on Tuesday. Wednesday then offers Building Approvals (1.10%), while Thursday features the Trade Balance (1.77B). Friday’s important data then concludes the week with the RBA Monetary Policy Statement and Retail Sales (0.20%). Resistance for AUD/USD is seen at 0.80658/75 and 0.7989, with support noted at 0.7913/38, 0.7833/34, and 0.7222/0.7679.

CAD The Canadian economic calendar is sparse this coming week, only featuring the RMPI (-3.20%) on Monday, followed on Friday by the Employment Change (14.6K), the Trade Balance (-1.4B), the Unemployment Rate (6.50%) and Ivey PMI (59.2). Resistance for USD/CAD is seen at 1.2763, 1.2654/80 and 1.2522, while support shows at 1.2413, 1.2362 and 1.2127.

EUR The Eurozone economic calendar is light this coming week, featuring CPI data on Monday. Monday starts the week’s highlights off with German Retail Sales (0.10%), the EZ CPI Flash Estimate (1.30%), and the Core EZ CPI Flash Estimate (1.10%), and Tuesday’s key events include Spanish Manufacturing PMI (54.9) and Preliminary EZ Flash GDP (0.60%). Wednesday then offers the Spanish Unemployment Change (-66.5K), which concludes the week’s highlights. Resistance for EUR/USD is seen at 1.2042, 1.1876 and 1.1776, with support showing at 1.1683/1.1714, 1.1616 and 1.11209/1.1494.

GBP The UK economic calendar is rather active this coming week, featuring the Office Bank Rate Decision on Thursday. Monday starts the week’s highlights off with Net Lending to Individuals (4.9B), and Tuesday’s key events include Manufacturing PMI (54.4). Wednesday then offers Construction PMI (54.2), while Thursday features Services PMI (53.7), the BOE Inflation Report, the MPC Official Bank Rate Votes (3-0-5), the Monetary Policy Summary, the Official Bank Rate Decision (unchanged at 0.25%), the Asset Purchase Facility (unchanged at 435B), the MPC Asset Purchase Facility Votes (0-0-8) and a speech by BOE Governor Carney that concludes the week’s highlights. Resistance to the topside for GBP/USD shows at 1.3371, 1.3279 and 1.3158, while support for the pair is expected at 1.2932/1.3120, 1.2768/1.2899 and 1.2690.

JPY The Japanese economic calendar is peaceful this coming week, featuring no notable data. Resistance for USD/JPY currently shows up at 115.30/61, 112.92/114.95 and 110.62/112.25, with support indicated at 110.08/110.27, 109.74 and 108.81/109.11.

NZD The New Zealand economic calendar is light this coming week, only featuring the ANZ Business Confidence survey (19.4) on Monday, followed on Tuesday by the GDT Price Index (last 0.20%), the Employment Change (0.70%) and the Unemployment Rate (4.80%). The chart for NZD/USD shows resistance at 0.7608/17 and 0.7557. On the downside, technical support is expected at 0.7297/0.7484, 0.6817/0.7262 and 0.6674/0.6738.

USD The U.S. economic calendar is busy this coming week, featuring key jobs data on Wednesday and Friday. Monday starts the week’s highlights off with Chicago PMI (60.8) and Pending Home Sales (0.90%), and Tuesday’s key events include the Core PCE Price Index (0.10%), Personal Spending (0.10%) and ISM Manufacturing PMI (56.4). Wednesday then offers the ADP Non-Farm Employment Change (187K) and Crude Oil Inventories (last -7.2M), while Thursday features Weekly Initial Jobless Claims (242K), ISM Non-Manufacturing PMI (56.9) and Factory Orders (2.70%). Friday’s important data then concludes the week with Average Hourly Earnings (0.30%), Non-Farm Payrolls (183K), the Unemployment Rate (4.30%) and the Trade Balance (-45.6B).


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