Markets will continue to look to Fedspeak

26 September, 2016

Markets will continue to look to Fedspeak

Lots of speeches from all around the globe this week, but focus now turns to the US Presidential election, with all eyes on Monday’s Trump-Clinton debate (up to 20% of US voters remain undecided). It’s believed that the debate “winner” could garner enough support to become the next president of the United States. That perception would have important implications for the various sectors of the economy supported by Trump or Clinton, including financials, defense, biotech, and energy to name a few, rise or fall with their candidate’s fortunes. There’s also plenty more central bank-speak to be had from the FOMC, ECB, BoJ, BoC, and RBA, along with discussions from oil ministers in Algeria where reportedly the Saudis are seeking a credible solution to help stabilize the oil market. Global asset markets, including bonds, stocks, oil, and gold, were in rally mode last week thanks mostly to central banks, with the effects from the FOMC and BoJ noted above, while weak European data added to beliefs the ECB could add to its already simulative posture.

United States:  The markets will continue to look to Fedspeak for direction this week, (12 FOMC members including Yellen and Fischer are due to speak this week) along with the debate. But, there’s also a full slate of Treasury supply (over $200 bln) to be digested heading into quarter-end.  Though Fedspeak and supply will dominate, there’s plenty of important data too. August new home sales (Monday) should is forecast dropping 12.1% to a 0.575 mln pace (median 0.597 mln), after solid gains since March, and largely erasing the 12.4% July jump to 0.654 mln. The September Chicago PMI (Friday), one of the most current stats, is seen bouncing back to 53.0 (median 51.9) after falling a total of 5.3 points to 51.5 in August, from 56.8 in June (which was the highest since January 2015). Durable orders should decline 1.0% in August (-1.0%) after July’s 4.4% rebound, from -4.2% in June. The August Advance goods trade report (Thursday) should post a wider $62.7 bln deficit (-$62.3 bln) from $59.3 bln previously. That would be a further weight on growth. September consumer confidence (Tuesday) may drop to 98.0 after surging 4.4 points to 101.1 in August (the best reading since September 2015). The final print on September consumer sentiment from the University of Michigan survey (Friday) should show little change from the 89.8 preliminary (median 90.0).

Canada: The light slate is highlighted by July GDP (Friday), expected to expand 0.2% m/m following the 0.6% m/m surge in June. The August industrial product price index (Friday) is seen slipping 0.2% (m/m, nsa) after the 0.2% gain in July. The raw materials price index is projected to decline 1.0% in August after the 2.7% tumble in July. BoC Governor Poloz delivers a lecture (Monday).

Europe: German Ifo Business Climate index is anticipated to 106.3 for September from 106.2 in August. he European Commission’s Eurozone Economic Confidence is seen steady at 103.5. German jobless numbers are expected to decline by -2K in September, versus August’s -7K, which should leave the jobless rate unchanged at 6.1%. Similarly, the August unemployment rate is expected to remain steady at 10.1%. At the same time, inflation rates remain very low, German HICP rising to 0.5% y/y from 0.3% y/y, French HICP also to 0.5% y/y from 0.4% y/y and Italian HICP to 0.1% y/y from -0.1% y/y, which should leave the Eurozone CPI at 0.4% y/y, up from 0.2% y/y. There is a host of ECBspeak this week. Draghi’s speech at the European Parliament (Monday) highlights. Other policymakers speaking this week include Coeure, Nowotny, Mersch, Praet, Ingves, Hansson, and Olsen.

UK: This week’s calendar brings a flurry of post-Brexit vote data. However, lately investors have been looking beyond the now evident rebound in activity from the post-EU referendum dip, to a still highly uncertain future trading relationship the UK will have with the EU. Data this week include, BBA mortgage approvals for August (Monday), expected at +37.0k from 37.7k in June (median same), the September CBI distributive sales survey (Tuesday), expectations for the headline realized sales reading to dip to +5 from +9 (median same), which would mark a correction after the biggest month-to-month jump in August on record. Monthly BoE lending data for August is also up (Thursday). The September Gfk consumer confidence survey (also Thursday) for September is seen jumping to a -5 reading from -7. The third estimate of Q2 GDP (Friday) is expected to be unrevised at 0.6%.

China: September Caixin/Markit manufacturing PMI (Thursday) is expected steady at 50.0.

Japan: The week kicks off on Tuesday with August services PPI, which we forecast will be up 01% y/y from the prior 0.4%. August retail sales (Thursday) are seen down 2.5% y/y from the previous 0.6% rise for large retailers, and down 1.0% y/y from up 1.5% overall. The remainder of releases come on Friday, beginning with August national CPI, which is seen unchanged at -0.4% y/y overall, and steady at -0.5% y/y on a core basis. September Tokyo CPI is expected steady at -0.5% y/y while the core reading is seen falling to -0.5% from -0.4%. August unemployment is penciled in at an unchanged 3.0%, as is the offers/seekers ratio, at 1.37. August personal income and PCE are due, with the latter expected to fall 2.5% y/y from the previous -0.5% reading. Preliminary August industrial production is forecast to rise 0.3% y/y versus the previous -0.4%, while August housing starts are seen up 5.0% y/y from the prior 8.9% increase. August construction orders will also be released.

Australia: The calendar is sparse this week. Reserve Bank of Australia Assistant Governor Malcolm Edey delivers a speech (Wednesday). The data docket has HIA new home sales on Friday.


Source link  
US reports revealed modest upside surprises for December trade

Asian stock markets mostly moved higher overnight, with Nikkei and Topix was trading close to levels last seen in December 2015 as the Yen weakened...

The global stock rally continued in Asia overnight

Reuters reported, the fast-growing financial technology (Fintech) sector could hold big “systemic risks” for the banking sector and the broader economy which need to be addressed by bank regulators around the world, Bank of England Governor Mark Carney said on Wednesday...

Too-strong a dollar may hurt the economy

Japanese stock markets moved higher, led by Japanese bourses as the country managed to snap a 14-month long run of falling exports, which helped the Nikkei to close with a 1.4% gain...


Dollar found its feet after declining over the last day

Asian stock markets were mixed overnight, with Japanese bourses still under pressure (Nikkei closed down 0.55%). despite a dip in the Yen, as USD stabilised. Uncertainty over Trump’s regulatory and trade policies continues to weigh on investor sentiment...

The dollar has settled moderately lower

Asian stock markets were mixed overnight, after U.S. and European shares closed in the red Thursday. Japan and mainland China bourses managed to move higher (Chinese GDP beat expectations at 6.8%)...

Stock markets continued to stabilise

German HICP confirmed at 1.7% y/y, as expected, with prices up 1.0% m/m. The sharp acceleration from just 0.7% y/y in November was mainly due to base effects from lower energy prices and the breakdown showed that prices for heating oil jumped 21.9% y/y in December...


ECB policy was focused on avoiding deflation trap

Asian stock markets were mixed, with Japan and ASX heading south amid reports that U.K. Prime Minister May will announce plans for a hard Brexit at today’s keynote speech. Yen strength is also continuing to put pressure on the Japanese markets...

U.S. markets are closed Monday

U.S. markets are closed Monday for Martin Luther King Day. This will be a busy week for traders, with the inauguration of president-elect Trump on Friday headlining...

The dollar is trading softer into the London open

Aftershocks from President-elect Trump’s campaign-like press conference, which had weighed on global stock markets and yields started to recede late in the U.S. session and U.S. equities managed to recover part of their losses...

  


Share: