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29/03/2016
Fundamental Analysis
Tuesday, March 29, 2016 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 this week (March 28-April 1)
Day/Time (GMT) Flag Currency Event Period Actual Forecast Previous
MONDAY
12:30 pm USD Personal Spending MoM February 0.1% 0.2% 0.1%
11:50 pm JPY Retail Sales YoY February 0.5% 1.6% -0.2%
TUESDAY
2:00 pm USD CB Consumer Confidence March 93.9 92.2
3:30 pm USD Fed Chair Yellen Speaks
WEDNESDAY
All Day EUR German Prelim CPI MoM March 0.6% 0.4%
12:15 pm USD ADP Non-Farm Employment Change March 194K 214K
THURSDAY
12:00 am NZD ANZ Business Confidence March 7.1
07:00 am GBP BOE Gov Carney Speaks
8:30 am GBP Current Account Quarter 4 -21.8B -17.5B
12:30 pm CAD GDP MoM February 0.3% 0.2%
12:30 pm USD Unemployment Claims March 26 269K 265K
FRIDAY
1:00 am CNY Manufacturing PMI March 49.3 49.0
8:30 am GBP Manufacturing PMI March 51.3 50.8
12:30 pm USD Average Hourly Earnings MoM March 0.3% -0.1%
2:00 pm USD ISM Manufacturing PMI March 50.8 49.5
Tuesday, March 29, 2016 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]
New Zealand Earlier this month the Reserve Bank of New Zealand slashed the official cash rate to a record-low 2.25% as dairy prices were continuing to fall and it seemed longer for inflation to reach the central bank's 1-3% target range. Most economists expect the RBNZ to cut the interest rates once more this year, following up its surprise cut to a record-low 2.25% with another by June. However, ASB's economist team is now predicting two more OCR cuts this year, forecasting that the RBNZ will not meet its inflation target otherwise as the effect of the RBNZ's cut earlier this month has not been fully passed on to borrowers and the New Zealand Dollar has since appreciated. Euro zone German business confidence strengthened for the first time in four months, in a sign that domestic demand is shielding German companies from sluggish global growth. The Ifo institute's business climate index climbed to 106.7 in March, up from 105.7 in the preceding month. German businesses have increased their dependence on domestic demand as a China-driven downturn in emerging markets curtails exports. At the same time, the ZEW Center for European Research in Mannheim reported its index of investor expectations, which aims to predict economic developments in the coming six months, surged to 4.3 in March from 1 in the previous month. The gauge rebounded from a 16-month low after market turmoil calmed and the European Central Bank launched fresh monetary stimulus. Japan Japan's consumer inflation remained flat in the year to February as low energy costs and weak consumption restrained price growth, keeping the Bank of Japan under pressure to introduce additional stimulus even after easing policy less than two months ago. A separate BoJ index, which strips out the effects of energy and fresh food prices, showed consumer inflation at 1.1% in the year to February, unchanged from January. Core consumer prices in Tokyo, a leading indicator of nationwide prices, recorded the biggest annual decline in nearly three years in March, suggesting that inflation will remain tepid amid weak demand as the world's third-largest economy stands on the edge of recession. The core CPI for the Tokyo metropolitan area slid 0.3% in March, after declining 0.1% in February. The data reinforces a dominant market opinion that the central bank will be forced to cut its inflation forecasts and push back the timing for reaching its 2% price target at a quarterly review of its projections next month.
Key highlights of the week ended March 25
USD
“Consumer spending and housing are keeping the economy going, despite major drags from net exports, capital spending and an inventory cycle” - IHS
Tuesday, March 29, 2016 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]
S&P/ASX 200 Index 0.29% 5,408.24
S&P/ASX 300 Index 0.28% 5,360.32
Trends* Q1 16 Q2 16 Q3 16
MAX 130 132 135
75% percentile 127 127 128
Median 125 125 125
25% percentile 122 123 122
MIN 115 115 113 * the data is based on international banks’ forecasts
Impact
US economy grows 1.4% in Q4, led by strong consumer spending
High
US economic growth slowed less than expected in the fourth quarter, with somewhat strong consumer spending offsetting the attempts by businesses to lower an inventory overhang. US gross domestic product rose at a 1.4% annual rate compared with the previously reported 1% pace, according to the Commerce Department. The economic growth revision shows better consumer spending on services and reinforces the view that the domestic economy is on a stable footing and continues to grow. Consumer spending, which accounts for more than two thirds of US economic output, surged 2.4%, compared with the 2.0% rate reported last month. However, declining profits and weak business investment reflect overseas uncertainty has hit manufacturers, energy firms and financial markets. First quarter estimates are around a 1.5% rate, with the risks to growth are tilted to the downside. Meanwhile, the PCE data came out lower than predicted, taking pressure off the Fed to resume interest rate increases. The price index for personal consumption climbed 0.1% last month. The core measure increased 1.7% over the past 12 months. In addition to that, consumer outlays edged a mere 0.1%, compared with a 0.2% expected by economists. A separate report showed the pending home sales index advanced 3.5% to 109.1 points in February, the highest since July.
28.03 open price 28.03 close price % change
AUD/USD 0.7509 0.7545 +0.48%
USD/CHF 0.9761 0.9738 -0.24%
USD/JPY 113.12 113.45 +0.29%
NZD/USD 0.6693 0.6723 +0.45%
JPY
“It would still make sense for the government to consider some form of stimulus, because it may want to act in response to concerns that the global economy is slowing” - Mizuho Research Institute
Tuesday, March 29, 2016 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]
S&P/ASX 200 Index 0.29% 5,408.24
S&P/ASX 300 Index 0.28% 5,360.32
Trends* Q1 16 Q2 16 Q3 16
MAX 145 150 148
75% percentile 134 135 136
Median 131 131 131
25% percentile 129 127 128
MIN 121 117 117 * the data is based on international banks’ forecasts
Impact
Japan retail sales rise for the first time in four months in February
High
Japan’s retail sales climbed slightly for the first time in four months in February, but the overall picture for consumption remains weak. Retail sales increased 0.5% last month from a year earlier, according to the Ministry of Economy, Trade and Industry. The rise followed a 0.2% decrease in January. Measured on a monthly basis, retail sales declined 2.3%. The propensity to consume, a measure of households’ willingness to spend rather than save, increased 3.9 points in February, the biggest rise in nine months. Japanese consumers have spent cautiously in recent months. Last quarter consumer spending was the biggest drag on Japan’s economic growth, prompting the world’s third biggest economy to shrank 0.3% over the quarter. Domestic consumption has mostly struggled since the government raised the sales tax in 2014. However, policy makers hope that if prices start to increase at a decent pace, consumers will be encouraged to spend, rather than put off purchases hoping that prices will decline. Yet, the Bank of Japan’s efforts have been undermined by recent appreciation of the Japanese Yen, which is lowering import prices, thereby making it harder for inflation to reach the 2% target. In addition to that, weaker wages is also making it harder for the central bank to reach the price target, as workers have less disposable income to spend.
28.03 open price 28.03 close price % change
AUD/JPY 84.972 85.586 +0.72%
CAD/JPY 85.238 86.034 +0.93%
EUR/JPY 126.28 127.02 +0.59%
USD/JPY 113.12 113.45 +0.29%
Tuesday, March 29, 2016 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 this week (March 21-25)
Day/Time (GMT) Flag Currency Event Period Actual Forecast Previous
MONDAY
2:00 pm USD Existing Home Sales February 5.08M 5.32M 5.47M
TUESDAY
5:30 am AUD RBA Gov Stevens Speaks
9:00 am EUR German Ifo Business Climate March 106.7 106.1 105.7
9:30 am GBP CPI YoY February 0.3% 0.4% 0.3%
10:00 am EUR German ZEW Economic Sentiment March 4.3 6.3 1.0
WEDNESDAY
9:45 pm NZD Trade Balance February 339M 75M 13M
THURSDAY
09:30 am GBP Retail Sales MoM February -0.4% -0.7% 2.3%
10:15 am EUR Targeted LTRO 7.3B 24.3B 18.3B
12:30 pm USD Core Durable Goods Orders MoM February -1.0% -0.2% 1.7%
FRIDAY
12:30 pm USD Final GDP QoQ Quarter 4 1.0%
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]
Chart SMA (55) – Simple Moving Average of 55 periods SMA (200) – Simple Moving Average of 200 periods Forecasts
EXPLANATIONS
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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