(02.15.2021) 

Upcoming Economic figures and events

The US:
NY Empire State Manufacturing Index, Retail Sales, PPI, Industrial Production, FOMC Minutes, Building Permits & Housing Starts, Claims, Export & Import Price Index, Philadelphia Fed Manufacturing Survey, Markit Manufacturing & Services PMI, Existing Home Sales,
+ Fed’s Bowman, Brainard and Rosengren Speech

EU:
EZ Trade Balance and Industrial Production, German ZEW Survey- Current Situation & Economic Sentiment, EZ GDP & Economic Sentiment, EZ Employment Data, ECB Monetary Policy Meeting Accounts, EZ Consumer Confidence, German PPI, German and EZ Markit Services & Manufacturing PMI,
+ Euro Group Meeting, Non-Monetary Policy ECB Meeting, Coronavirus Restriction Measures

UK
Retail Price Index, PPI & CPI, Gfk Consumer Confidence, Retail Sales, Markit Services & Manufacturing PMI,
+ Coronavirus Restriction Measures, BOE’s Ramsden, Saunders Speech

Japan:
GDP, Industrial Production, Trade Balance, Machinery Orders, Foreign Investment In Japan Stocks, CPI, Jibun Bank Manufacturing PMI,
+

Australia:
New Home Sales, RBA Meeting Minutes, Westpac Leading Index, Employment Data including Unemployment Rate, Commonwealth Bank Services & Manufacturing PMI, Retail Sales,
+ RBA’s Kent Speech

+ EIA Crude Oil Stocks Change, Chinese New Year, Canada’s Economic Data; CPI, Retail Sales and etc.


Other Market movers
 Developments of Coronavirus: Restriction Measures, Vaccine roll-out
 Central Banks’ policies: FOMC Minutes, ECB Monetary Policy Meeting Accounts, RBA Meeting Minutes
 Economic data; Retail Sales, Services and Manufacturing PMI
 Fiscal policies: President Biden’s stimulus package
 Stock Markets
 Oil Price; Broke $60
 Biden’s New Policies
 Conflicts between US-China
 Brexit talks Saga- issues unresolved




Weekly FX focus

Reflation trade continues, with Risk-on Markets Sentiment

Powell reiterated his commitment to support the economy. He said that any upside move in inflation would likely not mean that much. Powell also pledged not to instantly act solely upon an improvement in employment.
US Treasury Sec. Yellen: Urged G7 members to go big on financial support

09/14
Upcoming Economic figures and events

The US:
NY Empire State Manufacturing Index, Industrial Production, Retail Sales, Fed Interest Rate Decision and Press Conference, Claims, Housing Starts and Building Permits, Philadelphia Fed Manufacturing Survey, Michigan Consumer Sentiment Index,

EU:
EZ Industrial Production, German Current Situation & Economic Sentiment, EZ Economic Sentiment & Labor Cost, EZ Trade Balance, EZ CPI, German PPI

UK:
Inflation Report Hearings, UK Parliamentary Vote on Brexit, Employment Data, Average Earnings, Retail Price Index, PPI, CPI, BOE Interest Rate Decision & Bank of England Minutes, Retail Sales,

Japan:
Industrial Production, Trade Balance, Foreign Investment in Japan Stocks, BOJ Interest Rate Decision & Press Conference, CPI,

Australia:
House Price Index, RBA Meeting Minutes, Westpac Leading Index, New Home Sales, Employment Data,

+ EIA Crude Oil Stocks Change, China’s Economic Data; Retail Sales, Industrial Production, NBS Press Conference,

Other Market movers
 Developments of Coronavirus
 Central Banks’ policies: FOMC, BOJ, BOE
 Fiscal policies
 Stock Markets
 Oil Price
 Trump Risks
 Conflicts between US-China
 Brexit talks: discussion on Internal Market Bill

Weekly FX focus

Markets upbeat on vaccine, Japan selects new PM, Brexit saga moves to parliament.
Asian stock market: bulls track US futures amid vaccine hopes

Oxford and AstraZeneca: Announced they will resume trials of their coronavirus vaccine after pausing them over a week ago, amid possible side effects in one UK participant on the trials.
The news may bring some optimism at the weekly opening.
Most major pairs closed the week unchanged, in line with the high levels of uncertainty reported by central banks. The sterling was the exception, as it collapsed on Brexit chaos.
Brexit talks last week ended without progress, with differences in important areas still unresolved. Concerns were fueled by the EU’s threat to proceed with legal actions if the UK changes the withdrawal Agreement. The UK parliament will discuss this Monday the polemic Internal Market Bill.

Forex today: 20200909
The market mood remains damp amid the sell-off in tech stocks. Brexit issues, the US fiscal impasse, and AstraZeneca’s halt of its coronavirus vaccine trial. The dollar and yen are going ground while stocks and oil are on the back foot.
USD: closed the week with gains against most major rivals.
US employment figures for August came in mixed, the country recovered 1.37million jobs. Still, almost 300k of those positions were temporal government positions and those workers are scheduled to be laid off at the end of September.
The unemployment rate improved to 8.4% much better than previous.
Later on Friday, Fed’s Powell said that the pace of jobs growth is rising faster than expected, but reiterated that it may take years before the economy recovers in full, signaling that rates will remain low for a long time.

UK PM Johnson to announce tough new COVID-19 restrictions

Brexit: Round 8 has gone far worse than Brussels had anticipated last week.
The UK government have announced they could be breaking international law if they change the treaty but UK want Northern Ireland in the UK custom union.

On Thursday,
EU warns UK over serious violation of international law.
The European Commission said on Thursday that if the UK’s Internal Markets Bill were to be adopted, it would constitute an extremely serious violation of the Withdrawal Agreement and of international law.

US speaker of the House Nancy Pelosi said congress would not approve any US-UK trade deal if Britain breaks the Good Friday peace agreement.

Germany’s Scholz on Brexit
Need to stick with what has been agreed to.

French Trade minister warns UK on Brexit level playing field
We need to prepare in case of any no-deal regarding Brexit

ECB sees no need to overreact to euro gain
Incoming info suggest strong rebound.
Asset purchases to continue at 20billion a month
Recovery remains highly dependent on the course of the pandemic.
Increase in coronavirus infections is a risk to short-term outlook
Outlook depends on virus development, yet the euro area economy is supported by monetary and fiscal stimulus, rising global demand.
Forecasts have been revised up for 2020 and mostly unchanged for 2021 and 2022
Headline inflation likely to remain negative in the coming months, turn positive in 2021
Inflation forecasts largely unchanged including for 2020
Growth in loans to the private sector continues to benefit from historically low rates.

Q&A
We discussed the appreciation of the euro, but we do not target the exchange rate
The ECB does not target exchange rates
We have taken good note of the Fed’s strategy review and its change
We are about to renew ours. The next seminar will focus on inflation.
It would be unwise for me to prejudge our deliberations but clearly the focus will be on price stability.
August’s negative inflation was an alarm bell for some, but we do not see it this way.
PEPP has been efficient, effective.

ECB’s De Guindos: ECB does not target the exchange rate, but it is an important variable.
ECB’s Lagarde: ECB would carefully assess incoming data, including the euro’s strengthening.

BOC
Leaves policy rate unchanged at 0.25%
No surprise, no reaction
BOC’s Macklem:
ready to adjust short-term liquidity facilities as market conditions warrant.
Will take CAD’s level into account when assessing how much stimulus needed.

Oil
US: EIA crude oil stocks change at +2million in week ending September 4
BP: oil consumption may not return to pre-coronavirus levels.
Iraq cuts October crude pricing to Asia

NZ PM Arden: will review Auckland virus restrictions September 21st