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01/02/2017
Fundamental Analysis
Major events this week (January 30 - February 3)
Wednesday, 01 February 2017 08:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
Day/Time (GMT) Flag Currency Event Period Actual Forecast Previous
MONDAY
08:00 am CHF KOF Economic Barometer January 101.7 102.9 102.1
01:30 pm USD Core PCE Price Index m/m December 0.1% 0.1% 0.0%
TUESDAY
10:00 am EUR CPI Flash Estimate y/y January 1.8% 1.5% 1.1%
01:30 pm CAD GDP m/m November 0.4% 0.3% -0.2%
03:00 pm USD CB Consumer Confidence January 111.8 112.6 113.7
09:45 pm NZD Unemployment Rate Q4 2016 5.2% 4.8% 4.9%
WEDNESDAY
09:30 am GBP Manufacturing PMI January 55.9 56.1
10:00 am EUR EU Economic Forecasts
01:15 pm USD ADP Non-Farm Employment Change January 165K 153K
THURSDAY
09:30 am GBP Construction PMI January 53.9 54.2
01:30 pm USD Unemployment Claims Last week 251K 259K
FRIDAY
09:30 am GBP Services PMI January 55.8 56.2
Tentative USD Non-Farm Employment Change January 170K 156K
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
Key highlights of the week ended January 27
Euro zone Manufacturing activity in the Euro zone rose at its fastest pace since 2011 in January, a preliminary survey showed on Tuesday. IHS Markit reported its Purchasing Managers' Index for the region's manufacturing sector advanced to 55.1 points in January, up from December’s 54.9. The number slightly topped economists’ expectations for an increase of 54.8. Separately, Markit also reported that the preliminary PMI Index for the German manufacturing sector climbed to 56.5 points from 55.6 in December, while the Services PMI fell to 53.2 points from 54.3. Both manufacturing and services sectors in Germany are set to grow in the upcoming months, despite ease in the private sector. The Munich-based Ifo Institute reported its Business Climate Index decreased to 109.8 from 111.0 points seen December, while market analysts anticipated a slight acceleration to 111.3 in the reported period. US According to the EIA’s weekly report, US crude stockpiles climbed 2.8 million barrels in the week ended January 20, following a 2.3-million-barrel increase in the preceding week and surpassing market analysts’ expectations for a 1.5-million-barrel build up. According to the Commerce Department, home sales fell 10.4% to a seasonally adjusted annual pace of 536,000 units in December, whereas the November reading was revised up to 598,000 from the originally reported 592,000 unit-pace. Market analysts anticipated a slight decrease to 585,000 units during the reported period. The December figure marked the first monthly decline in the last three months. UK British retail sales dropped markedly last month amid higher prices, linked to the weaker Sterling. The ONS reported retail sales dropped 1.9% in December, worse than an expected 0.1% fall. That was the largest decline since April 2012. Meanwhile, the November gain of 0.2% was revised down to –0.1%. December’s weak retail sales most probably dampened economic growth in the last quarter of 2016. The British economy ignored the widely expected post-Brexit vote slowdown once again in the three month period to December, maintaining the third quarter’s growth pace of 0.6%. Meanwhile, market analysts anticipated a 0.5% growth rate. Canada The value of Canadian wholesale trade advanced less than expected in November, official figures revealed on Monday. According to Statistics Canada, the country’s wholesale trade rose 0.2% in the reported month, whereas market analysts anticipated an increase of 0.3%. In the meantime, the October gain of 1.1% was revised up to 1.3%. In volume terms, sale dropped 0.1% in November. In a report, Statistics Canada said sales grew in four out of seven sectors. The largest monthly gain came in the miscellaneous sector with a 7.2% increase.
Wednesday, 01 February 2017 08:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
“Mr Draghi will doubtless be keen to point out that it would be foolhardy to shift policy on the back of one inflation number ”. -Chris Beauchamp, IG Index
EUR
Impact
Consumer prices in Euro zone grow more than expected in January High
Inflation in the Euro zone rose more than expected in January but remained below the European Central Bank’s inflationary target. On Tuesday, Eurostat reported consumer prices advanced 1.8% on an annual basis in January, the highest level since February 2013, following December’s 1.1% and surpassing analysts’ expectations of 1.5%. In the meantime, the core Consumer Price Index, which excludes volatile items such as energy prices, came in at 0.9% year-over-year in January, unchanged from December and in line with market forecasts. Nevertheless, the ECB President Mario Draghi said policymakers would look beyond energy prices and seek further signs of rising underlying inflation in order to change the course of the Bank’s monetary policy. Tuesday’s data showed energy prices climbed 8.1% on a yearly basis in January after rising 2.6% in the preceding month, whereas the price of unprocessed food rose 3.3% year-over-year. Separately, Eurostat reported the Euro zone’s economy advanced an annualized 2.0% on quarter in the three months to December 2016, while the US economy, the world’s largest, grew at an annualized pace of 1.9% in the same period. Strong economic growth helped to lower the unemployment rate in the region, which dropped to 9.6% in December, the lowest level since May 2009.
Trends* Q1 17 Q2 17 Q3 17
MAX 1.19 1.18 1.22
75% percentile 1.07 1.08 1.10
Median 1.05 1.04 1.05
25% percentile 1.03 1.02 1.01
MIN 0.98 0.95 0.90
* the data is based on international banks’ forecasts
31.01 open price 31.01 close price % change
EUR/USD 1.0695 1.0796 0.94%
EUR/GBP 0.8566 0.8580 0.16%
EUR/CHF 1.0642 1.0683 0.38%
EUR/JPY 121.62 121.88 0.21%
Wednesday, 01 February 2017 08:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
Impact
Mood of American consumers deteriorates in January High
“The decline in confidence was driven solely by a less optimistic outlook for business conditions, jobs, and especially consumers’ income prospects”. -Lynn Franco, The Conference Board
USD
Consumers’ mood in the United States deteriorated markedly in January, a monthly survey revealed on Tuesday. The Conference Board said its Consumer Confidence Index dropped to 111.8 points in January after hitting 113.7, the highest level in 15 years, in the preceding month, while market analysts anticipated a slighter decrease to 112.6 during the reported period. The survey showed that consumers’ assessment of current conditions improved in January. Those stating business conditions are “good” increased to 29.3% from 28.6% in December, whereas those saying conditions were “bad” decreased to 16.1% from 17.8% in the prior month. Nevertheless, consumers’ short-term outlook turned significantly more negative in January, falling to 23.1% from the previous month’s 24.7%. Furthermore, the share of those expecting business conditions to worsen rose to 10.7% from December’s 8.9%. In addition, the proportion of those expecting more jobs in the upcoming months fell to 19.8% from December’s 21.7%, while the percentage of those expecting less jobs remained unchanged at 14.0%. The proportion of those expecting their income to improve declined to 18.0% from 21.5%, whereas the share of those expecting an income drop climbed to 9.6% from 8.6% registered in the previous month.
Trends* Q1 17 Q2 17 Q3 17
MAX 122 122 125
75% percentile 116 118 118
Median 114 114 115
25% percentile 110 109 110
MIN 98 100 100
* the data is based on international banks’ forecasts
31.01 open price 31.01 close price % change
AUD/USD 0.7550 0.7581 0.41%
USD/CHF 0.9951 0.9895 -0.57%
USD/JPY 113.72 112.90 -0.73%
NZD/USD 0.7283 0.7337 0.74%
Wednesday, 01 February 2017 08:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
Impact
Canadian GDP grows 0.4% month-over-month in November High
“Overall, the consensus-beating figures today, combined with the revisions, should have growth in Q4 tracking close to two per cent. That should remove further the possibility of a near-term ease from the BoC, despite its continuing dovish bias”. -Nick Exarhos, CIBC
CAD
The Canadian economy advanced for the fifth consecutive month in November amid the strengthening manufacturing sector, official figures revealed on Tuesday. Gross Domestic Product climbed 0.4% in the reported month that was above analysts’ forecasts of a 0.3% hike. Meanwhile, the October reading was revised up to a 0.2% decline from the originally reported 0.3% slump. On an annualized basis, the Canadian economy expanded 1.6%. In the meantime, the goods-producing sector advanced 0.9%, after falling 0.1% in the previous month. Growth was driven by a 1.4% monthly increase in the mining and energy sector, which grew 3.0% on an annual basis in the same month. Separately, Statistics Canada reported manufacturing output gained 1.4%. In the meantime, construction output dropped 1.1%, compared with the same month one year ago. The utilities production fell 3.0% as demand for heating diminished amid warmer-than-usual weather. The growth in the retail sector remained steady, while the insurance and finance sectors reported a 1.5% gain. Furthermore, the services sector added 0.2%, posting an annual increase of 1.9%. According to the latest forecasts released in December, the Bank of Canada expected the economy to expand at an annualized pace of 1.5% in the last quarter of 2016.
Trends* Q1 17 Q2 17 Q3 17
MAX 1.42 1.45 1.45
75% percentile 1.37 1.38 1.40
Median 1.35 1.36 1.36
25% percentile 1.32 1.32 1.31
MIN 0.84 1.22 1.20 * the data is based on international banks’ forecasts
31.01 open price 31.01 close price % change
AUD/CAD 0.9906 0.9864 -0.43%
CAD/CHF 0.7587 0.7593 0.08%
EUR/CAD 1.4031 1.4047 0.11%
USD/CAD 1.3120 1.3011 -0.84%
Wednesday, 01 February 2017 08:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
Impact
New Zealand’s jobless rate rises unexpectedly in Q4 of 2016 High
“The figures are certainly not weak - labour demand remains strong. But until clearer evidence of stronger wage growth emerges we doubt the RBNZ [Reserve Bank of New Zealand] will want to front-run a tightening cycle ”. -Cameron Bagrie, ANZ
NZD
New Zealand’s unemployment rate rose unexpectedly from its eight-year low in the last quarter of 2016 as more people entered the labour force, a quarterly employment report revealed on Tuesday. Statistics New Zealand reported the jobless rate climbed to 5.2% in the Q4, up from the preceding quarter’s 4.9%, while market analysts anticipated a slight drop to 4.8% during the reported period. Meanwhile, employment accelerated 0.8% to 2.51 million on a quarterly basis in the three month period to December 2016, following the previous quarter’s downwardly revised gain of 1.3% and meeting analysts’ expectations. Furthermore, the working-age population grew 0.5% to 3.76 million, whereas the participation rate hit its all-time high of 70.5%. Over the last few years, the key driver of the working age population growth in New Zealand were high levels of migration. Statistics New Zealand also said wage inflation, which includes the private and public sectors, grew 1.6% on a yearly basis in the Q4 after being unchanged at 1.5% for the last seven quarters. Moreover, the underutilisation or inactivity of labour in the New Zealand economy dropped 0.5% to 12.2% in the reported period. After the release, the New Zealand Dollar improved markedly its position on the market, rising above 0.7225 against its US counterpart.
Trends* Q1 17 Q2 17 Q3 17
MAX 0.77 0.77 0.78
75% percentile 0.71 0.70 0.71
Median 0.69 0.69 0.68
25% percentile 0.68 0.67 0.66
MIN 0.63 0.61 0.59 * the data is based on international banks’ forecasts
31.01 open price 31.01 close price % change
AUD/NZD 1.0367 1.0333 -0.33%
EUR/NZD 1.4686 1.4715 0.20%
GBP/NZD 1.7139 1.7203 0.37%
NZD/USD 0.7283 0.7337 0.74%
Wednesday, 01 February 2017 08:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
Major events previous week (January 23 - 27)
Day/Time (GMT) Flag Currency Event Period Actual Forecast Previous
MONDAY
01:30 pm CAD Wholesale Sales m/m November 0.2% 0.3% 1.3%
TUESDAY
9:00 am EUR Flash Services PMI January 53.6 53.9 53.7
9:30 am GBP EU Membership Court Ruling
03:00 pm USD Existing Home Sales December 5.49M 5.54M 5.61M
WEDNESDAY
09:00 am EUR German Ifo Business Climate January 109.8 111.3 111.0
03:30 pm USD Crude Oil Inventories Last week 2.5M 1.5M 2.3M
THURSDAY
09:30 am GBP Prelim GDP q/q Q4 2016 0.6% 0.5% 0.6%
03:00 pm USD New Home Sales December 536K 585K 598K
FRIDAY
09:30 am EUR M3 Money Supply y/y December 5.0% 4.9% 4.8%
01:30 pm USD Advance GDP q/q Q4 2016 1.9% 2.2% 3.5%
Wednesday, 01 February 2017 08:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
EXPLANATIONS
Chart SMA (55) – Simple Moving Average of 55 periods SMA (200) – Simple Moving Average of 200 periods Forecasts
Third Quartile – separates 25% of the highest forecasts
Second Quartile – the median price based on the projections of the industry
First Quartile – separates 25% of the lowest forecasts
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
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