Forex, Market Reports

Forex MarketWatch Weekly Recap for May 18th

EDITORS-IN-CHIEF:

Jay and Julie Hawk

FIND OUT MORE:

www.thefxperts.com

WEEKLY MARKET RECAP

The U.S. Dollar resumed its rally last week, gaining against all the majors with the exception of the Swiss Franc. The Greenback gained in part due to a rally in 10-year treasury yields, while the Euro was pressured by a lack of direction in the ECB’s policy path and the formation of an anti-EU coalition government in Italy.

Elsewhere, the deadline for a decision on the NAFTA agreement came and went on Wednesday, the 17th with no breakthroughs, and no date was set for the next ministerial meeting between the United States, Canada and Mexico.

Notable selected quotes from financial and political officials and other key events made and/or reported on over the past week are listed below by the day on which the news reports about them were released:

  • On Monday, May 14th, in prepared remarks for a speech in Paris, Cleveland Fed President Loretta Mester noted that, “In my view, the medium-run outlook supports the continued gradual removal of policy accommodation; it seems the best strategy for balancing the risks to both of our policy goals and avoiding a build-up of financial stability risks.”
  • On Tuesday, May 15th, RBA Deputy Governor Guy Debelle, in a speech entitled “The Outlook for the Australian Economy”, stated that, “The experience of other countries with labour markets closer to full capacity than Australia’s is that wages growth may remain lower than historical experience would suggest. In Australia, 2 per cent seems to have become the focal point for wage outcomes, compared with 3–4 per cent in the past.”
  • Wednesday, May 16th saw North Korea threaten to cancel the Trump-Kim summit scheduled for June 12th after U.S. National Security Advisor John Bolton suggested North Korea could follow the Libyan model for nuclear disarmament. North Korea’s vice-foreign minister Kim Kye-gwanit stated that, “This is not an expression of intention to address the issue through dialogue. It is essentially a manifestation of an awfully sinister move to impose on our dignified state the destiny of Libya or Iraq which had been collapsed due to yielding the whole of their countries to big powers. I cannot suppress indignation at such moves of the U.S., and harbor doubt about the U.S. sincerity for improved DPRK-U.S. relations through sound dialogue and negotiations.”
  • On Thursday, May 17th, the deadline for an agreement on NAFTA arrived without a breakthrough, although Canadian Prime Minister Justin Trudeau, speaking at the Economic Club of New York, said that, “To be honest, we are down to a point where there is a good deal on the table, it’s right down to the last conversations.” He added that, “I’m feeling positive about this, but it won’t be done until it’s done.” Later in the day, U.S. Trade Representative Robert Lighthizer said in a statement that, “The NAFTA countries are nowhere near close to a deal,” and indicated that there were “gaping differences” on a number of issues.
  • On Friday, May 18th, German Chancellor Angela Merkel, speaking on the Blocking Statute against extraterritorial effects of U.S. sanctions of Iran, said that, “All European Union member states are still backing this agreement, despite the fact the United States has decided not to, and we will continue talks with the United States.” Merkel added that, “We can see whether we can give small and medium-sized companies certain relief. That is being examined … As for compensating all businesses in a comprehensive way for such measures by the United States of America, I think we cannot and must not create illusions.”

 

ECONOMIC RELEASE RECAP

The following table contains results for significant economic data releases and events for each of the major economies, as well as the market’s consensus expectation and last result for each data release.

 

SunMay 13 11:50pm JPY PPI y/y 2.00% 2.00% 2.10%
MonMay 14 5:59am JPY Prelim Machine Tool Orders y/y 22.00% 28.10%
6:45am USD FOMC Member Mester Speaks
11:10pm AUD RBA Assist Gov Debelle Speaks
TueMay 15 1:30am AUD Monetary Policy Meeting Minutes
1:40am AUD RBA Assist Gov Debelle Speaks
2:00am CNY Fixed Asset Investment ytd/y 7.00% 7.40% 7.50%
CNY Industrial Production y/y 7.00% 6.40% 6.00%
CNY Retail Sales y/y 9.40% 10.00% 10.10%
3:35am JPY 30-y Bond Auction 0.75|4.4 0.71|4.3
4:30am JPY Tertiary Industry Activity m/m -0.30% -0.20% 0.10%
6:00am EUR German Prelim GDP q/q 0.30% 0.40% 0.60%
6:45am EUR French Final CPI m/m 0.20% 0.10% 0.10%
EUR French Prelim Private Payrolls q/q 0.30% 0.40% 0.40%
7:15am CHF PPI m/m 0.40% 0.30% -0.20%
8:30am GBP Average Earnings Index 3m/y 2.60% 2.70% 2.80%
GBP Claimant Count Change 31.2K 13.3K 15.7K
GBP Unemployment Rate 4.20% 4.20% 4.20%
9:00am EUR Flash GDP q/q 0.40% 0.40% 0.40%
EUR German ZEW Economic Sentiment -8.2 -8 -8.2
EUR Industrial Production m/m 0.50% 0.60% -0.90%
EUR ZEW Economic Sentiment 2.4 2 1.9
12:30pm USD Core Retail Sales m/m 0.30% 0.50% 0.40%
USD Retail Sales m/m 0.30% 0.40% 0.80%
USD Empire State Manufacturing Index 20.1 15.1 15.8
2:00pm USD Business Inventories m/m 0.00% 0.20% 0.60%
USD NAHB Housing Market Index 70 70 68
2:19pm NZD GDT Price Index 1.90% -1.10%
4:45pm USD FOMC Member Williams Speaks
8:00pm USD TIC Long-Term Purchases 61.8B 51.3B 49.0B
11:50pm JPY Prelim GDP q/q -0.20% 0.00% 0.40%
JPY Prelim GDP Price Index y/y 0.50% 0.30% 0.10%
WedMay 16 12:30am AUD Westpac Consumer Sentiment -0.60% -0.60%
1:30am AUD Wage Price Index q/q 0.50% 0.60% 0.50%
4:30am JPY Revised Industrial Production m/m 1.40% 1.20% 1.20%
6:00am EUR German Final CPI m/m 0.00% 0.00% 0.00%
9:00am EUR Final CPI y/y 1.20% 1.20% 1.20%
EUR Final Core CPI y/y 0.70% 0.70% 0.70%
9:35am EUR German 10-y Bond Auction 0.62|2.8 0.51|1.4
12:00pm EUR ECB President Draghi Speaks
12:30pm CAD Manufacturing Sales m/m 1.40% 1.10% 2.70%
USD Building Permits 1.35M 1.35M 1.38M
USD FOMC Member Bostic Speaks
USD Housing Starts 1.29M 1.32M 1.34M
1:15pm USD Capacity Utilization Rate 78.00% 78.40% 77.60%
USD Industrial Production m/m 0.70% 0.60% 0.70%
1:30pm GBP CB Leading Index m/m -0.20% -0.30%
2:00pm USD Mortgage Delinquencies 4.63% 5.17%
2:30pm USD Crude Oil Inventories -1.4M -1.1M -2.2M
4:00pm CAD Gov Council Member Schembri Speaks
CHF SNB Chairman Jordan Speaks
10:45pm NZD PPI Input q/q 0.60% 0.30% 0.90%
NZD PPI Output q/q 0.20% 0.20% 1.00%
11:50pm JPY Core Machinery Orders m/m -3.90% -2.90% 2.10%
ThuMay 17 1:00am AUD MI Inflation Expectations 3.70% 3.60%
1:30am AUD Employment Change 22.6K 19.8K -0.7K
AUD Unemployment Rate 5.60% 5.50% 5.50%
2:00am CNY Foreign Direct Investment ytd/y 0.10% 0.50%
NZD Annual Budget Release
8:00am EUR Italian Trade Balance 4.53B 3.74B 3.10B
8:57am EUR Spanish 10-y Bond Auction 1.37|2.3 1.29|2.0
12:30pm CAD Foreign Securities Purchases 6.15B 3.00B 4.32B
CAD ADP Non-Farm Employment Change 30.2K 59.3K
USD Unemployment Claims 222K 216K 211K
12:32pm USD Philly Fed Manufacturing Index 34.4 21.1 23.2
2:00pm USD CB Leading Index m/m 0.40% 0.40% 0.40%
2:30pm USD Natural Gas Storage 106B 105B 89B
4:00pm GBP MPC Member Haldane Speaks
11:30pm JPY National Core CPI y/y 0.70% 0.80% 0.90%
FriMay 18 6:00am EUR German PPI m/m 0.50% 0.30% 0.10%
EUR German WPI m/m 0.50% 0.20% 0.00%
7:00am USD FOMC Member Mester Speaks
8:00am EUR Current Account 32.0B 35.1B 36.8B
9:00am EUR Trade Balance 21.2B 20.7B 20.9B
12:30pm CAD CPI m/m 0.30% 0.30% 0.30%
CAD Core Retail Sales m/m -0.20% 0.50% 0.00%
CAD Common CPI y/y 1.90% 1.90%
CAD Median CPI y/y 2.10% 2.10%
CAD Retail Sales m/m 0.60% 0.30% 0.50%
CAD Trimmed CPI y/y 2.10% 2.00%
CAD Core CPI m/m 0.10% 0.20%
1:15pm USD FOMC Member Brainard Speaks

 

TECHNICAL RECAP

The table below contains our previous directional forecast and what spot level it was made at, as well as the previous close, open, high, low, close and percent change on the week that were subsequently observed for the past week for each of the major currency pairs.

 

 

 

Previous

Forecast

Open

Prev. Close

High

Day

Low

Day

Close

% Change

EUR/USD Mildly Higher 1.1942 1.1996 1.1750 1.1770
Spot: 1.1968 1.1939 Monday Friday -1.4%
           
USD/JPY Lower 109.28 111.05 109.21 110.74
Spot: 109.37 109.37 Friday Monday +1.3%
           
GBP/USD Mildly Higher 1.3540 1.3608 1.3451 1.3470
Spot: 1.3563 1.3538 Monday Tuesday -0.5%
           
AUD/USD Mildly Lower 0.7540 0.7565 0.7447 0.7508
Spot: 0.7555 0.7532 Monday Wednesday -0.3%
           
USD/CAD Lower 1.2789 1.2924 1.2750 1.2884
Spot: 1.2784 1.2795 Tuesday Thursday +0.7%
           
NZD/USD Lower 0.6961 0.6974 0.6851 0.6918
Spot: 0.6965 0.6963 Monday Wednesday -0.6%

 

Disclaimer:

TheFXperts’ Forex MarketWatch Reports are provided strictly for educational purposes and represent the opinions of the authors. No recommendation or endorsement for specific financial trading or investment purposes is offered. Subscribers are advised to seek financial, business and legal guidance from licensed professionals.

 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s