Weekly Market Watch

Released 07 August 2017 - Weekly Market News

Last week recap

Continued its rally last week, gaining fractionally as U.S. President Trump has yet to deliver on his promised fiscal policy changes and with mixed economic numbers out from both economies. The rate began the week trading higher after making its weekly low of 1.1722 on Monday as German Retail Sales increased by +1.1% m/m compared to an expected +0.1% increase, also, EZ Core CPI Flash Estimate increased by +1.2% y/y versus +1.1% expected, its highest reading in four years, while the EZ Unemployment Rate dropped to 9.1%, its lowest since 2009. The pair then consolidated at a slightly lower level on Tuesday after U.S. ISM Manufacturing PMI printed at 56.3, in line with expectations. Also, U.S. Personal Spending and the Core PCE Price Index both increased by +0.1% m/m as was widely anticipated, also, EZ Preliminary Flash GDP increased by +0.6% q/q as widely expected, its seventeenth consecutive quarter of growth. The rate resumed its rally, making its weekly high of 1.1909 on Wednesday after U.S. ADP Non-Farm Employment Change showed the addition of +178K jobs in July versus an expectation of +187K. The pair extended its gains on Thursday after U.S. Initial Jobless Claims showed 240K in its latest week compared to an expected 242K, and U.S. ISM Non-Manufacturing PMI, which printed at 53.9 versus an expectation of 56.9. The pair then sold off sharply on Friday after U.S. Non-Farm Employment Change showed +209K jobs created in July compared to a consensus of +182K. Also, U.S. Average Hourly Earnings increased by +0.3% as widely anticipated and the U.S. Unemployment Rate came down to 4.3% from 4.4% as widely expected. EUR/USD closed at 1.1770, with an overall gain of +0.3% from its previous weekly close.
Tread water last week as the United States reported mixed economic numbers with very little significant data from Japan. The rate began the week losing a fraction on Monday despite a better than expected U.S. Pending Home Sales number. The pair then gained a fraction on Tuesday, despite Japanese BOJ Core CPI, which increased by +0.3% y/y versus +0.2% anticipated. On Wednesday, the pair made its weekly high of 110.97 despite lower than expected U.S. employment and PMI numbers. Thursday saw the pair sell off after U.S. ISM Non-Manufacturing PMI failed to meet expectations. On Friday, the rate recovered most of Thursday’s losses after a better than expected U.S. Non-Farm Payrolls number. USD/JPY closed at 110.64, with a loss of less than a pip and virtually unchanged on the week.
Lost ground last week as the BOE left interest rates unchanged with mixed economic numbers from both countries. Cable began the week on a positive note, gaining a fraction after UK Net Lending to Individuals increased to +5.6B compared to an expectation of +4.9B. The rate continued gaining on Tuesday after UK Manufacturing PMI printed at 55.1 versus a market consensus of 54.4. Cable extended its gains on Wednesday after a lower than expected U.S. employment number and despite UK Construction PMI, which printed at 51.9 compared to an expected reading of 54.3. The rate then made its weekly high of 1.3268 before selling off on Thursday after the BOE left its benchmark Official Bank Rate unchanged at 0.25% with two dissenting MPC votes versus six in favour. The Asset Purchase Facility was left at 435B by a unanimous vote. The Monetary Policy Summary noted that, “if the economy follows a path broadly consistent with the August central projection, then monetary policy could need to be tightened by a somewhat greater extent over the forecast period than the path implied by the yield curve underlying the August projections.” Cable continued its selloff on Friday, making its weekly low of 1.3023 after a better than expected U.S. Non-Farm Payrolls number. GBP/USD closed at 1.3033, with an overall loss of -0.7% for the week.
Lost a fraction last week as the RBA left interest rates unchanged while the United States reported a better than expected Non-Farm Payrolls number. The week began with the rate gaining a fraction on Monday after mixed U.S. housing and PMI data. The pair then made its weekly high of before selling off after the RBA left its benchmark Cash Rate unchanged at 1.50% as was widely expected. In his Statement on the Monetary Policy Decision, Governor Philip Lowe noted that, “The Australian dollar has appreciated recently, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to subdued price pressures in the economy. It is also weighing on the outlook for output and employment. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.” On Wednesday, the rate consolidated after Australian Building Approvals increased by +10.9% m/m, significantly higher than the expectation of +1.2%. Thursday saw the pair consolidate at a slightly higher level after the Australian Trade Balance showed a surplus of +0.86B compared to an expected surplus of +1.78B. The rate then made its weekly low of 0.7890 on Friday after U.S. Non-Farm Payrolls exceeded expectations, as well as the release of the RBA’s Statement on Monetary Policy and Australian Retail Sales, which increased by +0.3% m/m compared to an expected +0.2%. AUD/USD closed the week at 0.7925, with an overall loss of -0.7%.
Reversed direction, rallying last week as Canada reported mostly lower than expected economic data, while the United States reported a better than expected Non-Farm Payrolls number. The rate began the week gaining fractionally after making its weekly low of 1.2444 on Monday after Canadian RMPI declined by -3.7% compared to an expected -3.2%. The pair extended its gains on Tuesday after mixed U.S. Personal Spending and PMI data. On Wednesday, the rate continued rallying despite a lower than expected ADP Non-Farm Employment Change number. The pair then consolidated on Thursday after a lower than expected U.S. ISM Non-Manufacturing PMI number. The rate then made its weekly high of 1.2666 on Friday after Canadian Employment Change showed +10.9K new jobs compared to an expected +13.1K; however, the Canadian Unemployment Rate declined to 6.3% from 6.5%. Also released were the Canadian Trade Balance, which showed an expanding deficit of -3.6B compared to an expectation of -1.3B; and the Canadian Ivey PMI, which printed at 60.0 versus 59.2 anticipated. USD/CAD closed at 1.2646, with an overall gain of +1.7% from its previous weekly close.
Declined last week as New Zealand reported weak economic data, while the United States reported mixed economic numbers. The rate began the week by falling a fraction on Monday after the ANZ Business Confidence index printed at 19.4 compared to a previous release of 24.8. The pair then fell sharply after making its weekly high of 0.7523 on Tuesday after New Zealand Employment Change declined by -0.2% q/q compared to an expected increase of +0.7%, while the New Zealand Unemployment Rate held steady at 4.8% as widely expected. The pair continued southbound on Wednesday despite a lower than expected U.S. employment number. On Thursday, the rate gained ground after making its weekly low of 0.7389 as the United States reported mixed economic data. The pair then resumed selling off on Friday after a better than expected U.S. Non-Farm Payrolls number. NZD/USD closed at 0.7405, with a weekly net loss of -1.4%.

The week ahead

AUD The Australian economic calendar is rather light this coming week, only featuring NAB Business Confidence (last 9) and a speech by RBA Assistant Governor Kent on Tuesday, followed on Friday by a speech by RBA Governor Lowe. Also Sunday is Australian Bank Holiday. an Resistance for AUD/USD is seen at 0.8162, 0.8042/75 and 0.7989, with support noted at 0.7891/0.7938, 0.7833/34, and 0.7222/0.7679.

CAD The Canadian economic calendar is lightly active this coming week, only featuring Building Permits (-1.80%) on Wednesday, followed by the NHPI (0.50%) on Thursday. Also, Monday is a Canadian Bank Holiday. Resistance for USD/CAD is seen at 1.2859/1.2928, 1.2763 and 1.2654/80, while support shows at 1.2522/75, 1.2362/1.2413 and 1.2127.

EUR The Eurozone economic calendar is quiet this coming week, featuring no data of note. Resistance for EUR/USD is seen at 1.2042, 1.1910 and 1.1876, with support showing at 1.1683/1.1776, 1.1616 and 1.11209/1.1494.

GBP The UK economic calendar is sparse this coming week, only featuring the Halifax HPI (0.30%) on Monday, followed on Thursday by Manufacturing Production (0.00%) and the Goods Trade Balance (-11.0B). Resistance to the topside for GBP/USD shows at 1.3371, 1.3279 and 1.3120/58, while support for the pair is expected at 1.2932/1.3047, 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 110.80/112.25, with support indicated at 110.08/110.62, 109.74/91 and 108.81/109.11.

NZD The New Zealand economic calendar is somewhat active this coming week, featuring the Official Cash Rate Decision on Wednesday. Monday starts the week’s highlights off with Inflation Expectations (last 1.90%), and Wednesday offers the Official Cash Rate (1.75%), the RBNZ Rate Statement, the RBNZ Monetary Policy Statement and the RBNZ Press Conference. Thursday then features a speech by RBNZ Governor Wheeler and the Business NZ Manufacturing Index (last 56.2) to conclude the week’s highlights. The chart for NZD/USD shows resistance at 0.7608/17, 0.7557 and 0.7453/84. On the downside, technical support is expected at 0.7297/0.7389, 0.6817/0.7262 and 0.6674/0.6738.

USD The U.S. economic calendar is busy this coming week, featuring CPI data on Friday. Monday starts the week’s highlights off with a speech by FOMC Member Kashkari, and Tuesday’s key events include JOLTS Job Openings (5.66M) and Mortgage Delinquencies (last 4.71%). Wednesday then offers Preliminary Nonfarm Productivity (0.80%), Preliminary Unit Labor Costs (1.20%) and Crude Oil Inventories (last -1.5M), while Thursday features PPI (0.10%), Weekly Initial Jobless Claims (244K), Core PPI (0.20%) and a speech by FOMC Member Dudley. Friday’s important data then concludes the week with CPI (0.20%), Core CPI (0.20%), and speeches by FOMC Member Kaplan and FOMC Member Kashkari.


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