Weekly Market Watch

Released 28 August 2017 - Weekly Market News

Last week recap

Traded sharply higher last week as the Greenback was pressured by further uncertainty with the Trump administration after White House economic advisor Gary Cohn submitted his resignation, while ECB President Draghi omitted talking about ECB monetary policy in his speech at the Jackson Hole Economic Symposium. The pair began the week rallying after making its weekly low of 1.1730 on Monday in the absence of any significant data out of either economy. The rate sold off on Tuesday after German ZEW Economic Sentiment index printed at 10.0, significantly lower than the expectation of 14.8 and a 10-month low on the index. The pair resumed its rally on Wednesday after positive European PMI data: German Flash Manufacturing PMI printed at 59.4 compared to 57.7 anticipated; Eurozone Manufacturing PMI showed a reading of 57.4 versus 56.3 expected, and French Flash Manufacturing PMI, which printed at 55.8 versus an expectation of 54.5. Also on Wednesday, ECB President Draghi took the podium at the Jackson Hole Economic Symposium. In a speech entitled “Sustaining Openness in a Dynamic Global Economy” he stated that, “A turn towards protectionism would pose a serious risk for continued productivity growth and potential growth in the global economy,” and the protectionist risk “is particularly acute in the light of the structural challenges facing advanced economies.” The rate declined a fraction on Thursday despite U.S. Existing Home Sales, which showed an annualized +571K compared to an expectation of +611K. Also, U.S. Initial Jobless Claims showed 234K claims in its latest week versus 237K expected. The pair then made its weekly high of 1.1941 on Friday after German Ifo Business Climate printed at 115.9 versus an expectation of 115.5, while U.S. Core Durable Goods increased by +0.5% m/m versus +0.4% expected; however, Durable Goods Orders declined by -6.8% m/m versus -6.0% anticipated. Also, Fed Chair Janet Yellen delivered a speech at the Jackson Hole Economic Symposium entitled “Financial Stability a Decade after the Onset of the Crisis”, in which she noted that, “The balance of research suggests that the core reforms we have put in place have substantially boosted resilience without unduly limiting credit availability or economic growth.” EUR/USD went on to close at 1.1920, with an overall gain of +1.4% from its previous weekly close.
Gained a fraction last week as asset flows favoured the Greenback over the Yen with very little economic data from Japan. The rate began the week making its weekly low of 108.63 on Monday in the absence of any significant data from either country. The pair then gained on Tuesday after North Korea warned the United States of “merciless revenge” in response to the joint annual military drills held by the U.S. and South Korea. Japanese Foreign Minister Taro Kono said that “its time to exert pressure” on North Korea in response. The rate sold off on Wednesday after Japanese Flash Manufacturing PMI printed at 52.8 compared to an expected 52.3. On Thursday, the pair traded higher despite a lower than expected U.S. Existing Home Sales number. Friday saw the pair decline after making its weekly high of 109.83 as the United States reported lower than expected Durable Goods Orders. USD/JPY closed at 109.33, with a net gain of +0.2% for the week.
Reversed direction, gaining a fraction last week as both countries reported mixed economic numbers. Cable began the week making its weekly high of 1.2915 on Monday in the absence of any significant numbers from either country. The rate declined on Tuesday despite UK Public Sector Net Borrowing, which printed at -0.8B versus an expected reading of 0.0B. Cable lost another fraction on Wednesday despite a lower than expected U.S. New Home Sales number. On Thursday, the pair consolidated after making its weekly low of 1.2773 after UK Second Estimate GDP increased by +0.3% q/q as was widely anticipated. Also, UK Preliminary Business Investment showed a flat reading for the quarter compared to an expectation of +0.2%. Cable then gained ground on Friday after a lower than expected U.S. Durable Goods Orders number. GBP/USD closed at 1.2877, with an overall gain of just +8 pips and virtually unchanged on the week.
Extended its previous week’s gains, trading fractionally higher with very little significant data from Australia. The week began with the rate gaining a fraction on Monday after the Australian CB Leading Index increased by +0.5% m/m versus a previous flat reading. The pair declined on Tuesday in the absence of any significant data out of either country. The rate then consolidated on Wednesday after a lower than expected U.S. New Home Sales number. On Thursday, the pair made its weekly low of 0.7866 despite a lower than expected U.S. Existing Home Sales release. The rate then made its weekly high of 0.7953 on Friday after lower than expected U.S. Durable Goods Orders data. AUD/USD closed at 0.7929, with an overall gain of just 7 pips or +0.1%.
Extended its previous week’s losses last week as both countries reported mixed economic data. The rate began the week trading lower after making its weekly high of 1.2606 on Monday despite Canadian Wholesale Sales, which declined by -0.5% m/m versus an expected increase of +0.6%. The pair consolidated at a slightly higher level on Tuesday after Canadian Retail Sales increased by +0.1% m/m versus an expectation of +0.2%, while Core Retail Sales increased by +0.7% m/m compared to an expectation of a flat reading. The rate resumed its selloff on Wednesday after a lower than anticipated U.S. New Home Sales number. Thursday saw the pair continue lower after U.S. Existing Home Sales disappointed the market. The rate then made its weekly low of 1.2464 on Friday after a lower than expected U.S. Durable Goods Orders number. USD/CAD closed at 1.2477, with a loss of -0.8% for the week.
Sold off last week as asset flows favoured the Greenback over the Kiwi with very little significant economic data from New Zealand. The week began with the pair making its weekly high of 0.7336 on Monday after NZ Credit Card Spending increased by +7.2% y/y compared to a previous reading of +8.3%. The pair continued selling off on Tuesday in the absence of any significant data out of either country. The rate then made its weekly low of 0.7190 on Wednesday despite the New Zealand Trade Balance, which showed a surplus of +85M compared to an expected deficit of -200M. The pair recovered on Thursday after a lower than expected U.S. Existing Home Sales number. Friday saw the rate continue rallying after lower than expected U.S. Durable Goods Orders data. NZD/USD closed at 0.7234, with a net loss of -1.0% from its previous weekly close.

The week ahead

AUD The Australian economic calendar is light this coming week, only featuring Building Approvals (-5.10%) and Construction Work Done (1.10%) on Wednesday, followed on Thursday with Private Capital Expenditure (0.20%). Resistance for AUD/USD is seen at 0.8162, 0.8042/75 and 0.7938/89, with support noted at 0.7891/0.7913, 0.7807/66, and 0.7222/0.7679.

CAD The Canadian economic calendar is sparse this coming week, only featuring the RMPI (-2.50%) on Tuesday; the Current Account (-17.2B) on Wednesday and GDP (0.10%) on Thursday. Resistance for USD/CAD is seen at 1.2859/1.2928, 1.2654/1.2772 and 1.2522/75,, while support shows at 1.2465, 1.2362/1.2413 and 1.2127.

EUR The Eurozone economic calendar is moderately busy this coming week, featuring CPI data on Wednesday. Monday starts the week’s highlights off with the EZ M3 Money Supply (4.90%), and Tuesday is quiet. Wednesday then offers German Preliminary CPI (0.10%) and Spanish Flash CPI (1.70%), while Thursday features German Retail Sales (-0.60%), the EZ CPI Flash Estimate (1.40%) and the EZ Core CPI Flash Estimate (1.20%). Friday’s important data then concludes the week with Spanish Manufacturing PMI (54.40%). Resistance for EUR/USD is seen at 1.2456, 1.2329 and 1.2042, with support showing at 1.1910, 1.1827/76 and 1.1776.

GBP The UK economic calendar is rather quiet this coming week, only featuring Net Lending to Individuals (5.3B) on Wednesday, a speech by MPC Member Saunders on Thursday and Manufacturing PMI (55) on Friday. Also, Monday is a UK Bank Holiday. Resistance to the topside for GBP/USD shows at 1.3120/58, 1.3030/47 and 1.2916/1.2988, while support for the pair is expected at 1.2768/1.2899, 1.2642/90 and 1.2589.

JPY The Japanese economic calendar is quiet this coming week, featuring no notable data. Resistance for USD/JPY currently shows up at 112.92/115.61, 110.08/112.25 and 109.74/91, with support indicated at 108.59/109.11, 108.13 and 107.48.

NZD The New Zealand economic calendar only features the ANZ Business Confidence survey (last 19.4) on Thursday. The chart for NZD/USD shows resistance at 0.7608/17, 0.7557 and 0.7297/0.7484. On the downside, technical support is expected at 0.6817/0.7262 and 0.6674/0.6738.

USD The U.S. economic calendar is active this coming week, featuring key jobs data on Wednesday and Friday. Tuesday starts the week’s highlights off with the CB Consumer Confidence survey (120.3), and Wednesday offers the ADP Non-Farm Employment Change (186K), Preliminary GDP (2.70%), a speech by FOMC Member Powell, and Crude Oil Inventories (last -3.3M). Thursday features Weekly Initial Jobless Claims (237K), the Core PCE Price Index (0.10%), Personal Spending (0.40%), Chicago PMI (59.6) and Pending Home Sales (0.60%), while Friday’s important data then concludes the week with Average Hourly Earnings (0.20%), Non-Farm Payrolls (180K), the Unemployment Rate (4.30%), ISM Manufacturing PMI (56.5), and the Revised University of Michigan Consumer Sentiment survey (97.4).


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