Eyes On U.S. Federal Reserve Members’ Speeches
SGT Markets | Jun 20, 2017 05:47AM ET
EUR/USD
Eyes on U.S. Federal Reserve members’ speeches.
Federal Reserve FOMC raised Interest Rates. Fed Chair Janet Yellen, who was unabashedly hawkish, failed to convince the market that the economy is as rosy as she thinks. Investors are skeptical because of all the recent disappointments in U.S. data including consumer confidence and housing-market reports. With no major U.S. economic data scheduled for release this week, investors will be watching Fed speak to see whether the 6 U.S. policymakers scheduled to speak will confirm Yellen’s hawkishness.
Washington Post reported that U.S. President Donald Trump is being investigated by special counsel Robert Mueller for possible obstruction of justice.
On the other hand, French NFP higher than expected but last German ZEW Economic Sentiment released confirmed its slowdown.
The ECB deposit rate was kept unchanged at minus 0.4 percent and the main refinancing rate at zero. The European Central Bank ruled out further interest-rate cuts in a sign that it’s moving closer to an exit from its stimulus program. Policy makers reiterated their pledge to increase the size or duration of their bond-buying program if the economy deteriorates. Updated forecasts show a stronger growth outlook but a weaker inflation picture across the projection horizon.
German Unemployment Change better than expected while Eurozone CPI (Preliminary release) slowed down along with German CPI.
Ranging between 1.129, strong resistance repeatedly under test, and 1.112. As we wrote previously, 1.11 could be retested in search of the strong supports in that area.
Our special Fibo Retracement is confirming the following S/R levels against the monthly and weekly trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Bearish
1st Resistance: 1.1194
2nd Resistance: 1.1291
1st Support: 1.1100
2nd Support: 1.1022
EUR
Recent Facts:
9th of March, ECB Interest Rate decision + ECB Press Conference
Interest Rates unchanged, ECB President Dovish (can be cut again in the future if necessary).
14th of March, German CPI + German ZEW Economic Sentiment
German CPI as expected, German ZEW worse than expected.
24th of March, German Manufacturing PMI
Significantly better than expected.
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30th of March, German CPI F
Lower than expected.
31st of March, German Unemployment Change + Eurozone CPI
German Unemployment Change better than expected (for the sixth time in a row), Eurozone CPI worse than expected.
3rd of April, German Manufacturing PMI
As expected.
11th of April, German ZEW Economic Sentiment
Better than expected.
21st of April, French Manufacturing PMI + German Manufacturing PMI
Better than expected.
23rd of April, French Elections (first round)
Centrist Emmanuel Macron, a pro-EU ex-banker and former economy minister, emerged as the leader of the first round of voting and qualified for a May 7 runoff alongside the second-place finisher, far-right leader Marine Le Pen.
24th of April, German Ifo Business Climate
Better than expected.
27th of April, ECB Interest Rate decision + ECB Press Conference
Unchanged, eyes on next Inflation data.
28th of April, CPI (Preliminary)
Higher than expected.
2nd of May, German Manufacturing PMI
As expected.
3rd of May, German Unemployment Change + Eurozone GDP (Preliminary)
German Unemployment Change better than expected (for the 5th time in a row).
Eurozone GDP (Preliminary) as expected.
7th of May, French Elections
Centrist pro-EU Macron Won French Elections.
12th of May, German GDP (Preliminary release)
As expected.
16th of May, Eurozone GDP (Preliminary release) + Trade Balance + ZEW Economic Sentiment
Better than expected.
17th of May, Eurozone CPI
As expected.
23rd of May, German Manufacturing PMI
Better than expected.
30th of May, German CPI (Preliminary release)
Worse than expected.
31st of May, German Unemployment Change + Eurozone CPI (Preliminary)
German Unemployment Change better than expected (for the 8th time in a row), Eurozone CPI worse than expected.
1st of June, German Manufacturing PMI
Slightly better than expected.
8th of June, GDP, Interest Rate Decision + ECB Press Conference
GDP better than expected, ECB moving closer to an exit from its stimulus program.
13th of June, French Non-Farm Payrolls
Better than expected.
13th of June, German Zew Economic Sentiment
Worse than expected.
USD
Recent Facts:
3rd of March, ISM Non-manufacturing PMI + Fed Chair Yellen Speech
ISM Non-manufacturing PMI better than expected, Yellen noted that a rate increase at next meeting "would likely be appropriate" insisting on the condition that data on employment and inflation have to move in line with expectations.
8th of March, ADP Nonfarm Employment Change
Better than expected.
10th of March, Nonfarm Payrolls + Unemployment Rate
Better than expected.
14th of March, Producer Price Index
Higher than expected.
15th of March, Core CPI + Retail Sales
As expected.
15th of March, FOMC Economic Projections + FOMC Statement + Fed Interest Rate Decision + FOMC Press Conference
The Federal Reserve increased interest rates by 0.25% to a 0.75-1% range. Dovish speech of Chairwoman Yellen.
24th of March, Manufacturing PMI + Services PMI (preliminary release)
Worse than expected (4th time in a row).
28th of March, Conference Board Consumer Confidence
Better than expected (the highest since December 2000).
30th of March, GDP
Better than expected.
5th of April, ADP Nonfarm Employment Change + ISM Non-Manufacturing Employment + ISM Non-Manufacturing PMI
ADP Nonfarm Employment Change better than expected.
ISM Non-Manufacturing Employment + ISM Non-Manufacturing PMI worse than expected.
7th of April, Nonfarm Payrolls + Unemployment Rate
Nonfarm Payrolls worse than expected, Unemployment Rate better than expected.
14th of April, Core CPI + Retail Sales
Core CPI (Inflation) Lower than expected.
Retail Sales worse than expected.
20th of April, Philadelphia Fed Manufacturing Index
Worse than expected.
27th of April, Durable Good Orders + Pending Home Sales
Worse than expected.
28th of April, GDP (Preliminary release)
Worse than expected but Price Index higher than expected.
3rd of May, ADP Nonfarm Employment
ADP Nonfarm Employment better than expected.
5th of May, Nonfarm Payrolls + Unemployment Rate
Better than expected.
11th of May, U.S. Producer Price Index (PPI)
Higher than expected.
12th of May, U.S. Retail Sales + Core CPI (Inflation data)
Worse than expected.
18th of May, Initial Jobless Claims + Philadelphia Fed Manufacturing Index
Better than expected.
23rd of May, Manufacturing PMI + New Home Sales
Worse than expected.
24th of May, FOMC Meeting Minutes
U.S. central bank kept its benchmark rate unchanged, highlighting a slowdown in economic activity (more proof that weakness in the first-quarter was temporary is needed for future rate hikes).
26th of May, Core Durable Good Orders + U.S. GDP (Preliminary release)
Core Durable Goods Orders worse than expected, GDP (Preliminary) better than expected.
31st of May, Chicago PMI + Pending Home Sales
Worse than expected.
1st of June, ADP Nonfarm Employment Change + ISM Manufacturing PMI
Better than expected.
2nd of June, Nonfarm Payrolls + Unemployment Rate
Nonfarm Payrolls worse than expected, Unemployment Rate better than expected.
13th of June, Producer Price Index
Core PPI (ex food and energy) better than expected.
14th of June, CPI + Retail Sales
Worse than expected.
14th of June, FOMC Interest Rates Decision + Statement
Interest Rate hike as expected.
GBP/USD
Eyes on today Bank Of England Governor Carney’s speech and on U.S. Federal Reserve members’ speeches.
Federal Reserve FOMC raised Interest Rates. The core rate of inflation in the U.S. increased at just 1.7 percent on year, the fourth straight monthly deceleration and the slowest overall pace in two years.
UK CPI (Inflation) data again higher than expected while UK Retail Sales worse than expected. Last data regarding UK manufacturing and industrial production were worse than expected along with UK GDP, Preliminary release.
1.298 area and 1.283 area are strong Resistances and they were under test, as we wrote in the previous commentaries. We believe the risk is to the downside for GBP/USD. If GBP/USD fails to break above 1.283, it should sink back to 1.27 area (important Support which could be tested more than once).
Brexit Secretary David Davis starts negotiations in Brussels, which will be followed by a Brussels summit during this week where British Prime Minister Theresa May will encounter fellow European Union leaders.
The pound fell sharply on Friday after British Prime Minister Theresa May's Conservative Party lost its parliamentary majority in a general election, leaving no single party with a clear claim to power ahead of the start of negotiations on Britain's divorce from the European Union.
And there are still some unresolved tensions with Scotland and Northern Ireland, which voted against leaving the EU. Theresa May provided no clear plan about the comprehensive “free-trade” partnership with EU members she wants to achieve.
Our special Fibo Retracement is confirming the following S/R levels against the monthly and weekly trendlines obtained by connecting the relevant highs and lows back to 2001:
Weekly Trend: Bearish
1st Resistance: 1.2830
2nd Resistance: 1.2978
1st Support: 1.2705
2nd Support: 1.2530
GBP
Recent Facts:
4th of August, Bank of England Interest Rates decision (expected a cut)
Bank of England lowers Interest Rates as expected (record low of 0.25%) and increases purchase program.
15th of March, Job Market
Better than expected.
16th of March, Interest Rates Decision + BoE Meeting Minutes
A Bank of England policymaker unexpectedly voted to raise interest rates.
21st of March, CPI
CPI Higher than expected.
23rd of March, Retail Sales
Better than expected.
31st of March, GDP YoY
Worse than expected.
3rd of April, Manufacturing PMI
Worse than expected.
5th of April, Services PMI
Better than expected.
7th of April, Manufacturing Production
Worse than expected.
11th of April, UK CPI
Higher than expected.
12th of April, UK Job Market
Worse than expected.
21st of April, UK Retail Sales
Worse than expected.
28th of April, UK GDP (Preliminary release)
Worse than expected.
2nd of May, Manufacturing PMI
Better than expected.
3rd of May, Construction PMI
Better than expected.
4th of May, Services PMI
Better than expected.
11th of May, UK Manufacturing Production + Trade Balance + BoE Interest Rate Decision
Manufacturing Production + Trade Balance worse than expected.
The Bank of England made no changes to monetary policy but warned that living standards will fall this year as the headwinds from Brexit mount.
16th of May, UK CPI (Inflation data)
Higher than expected.
17th of May, UK Job Market
Worse than expected.
18th of May, Retail Sales
Better than expected.
25th of May, GDP (Preliminary)
Worse than expected.
1st of June, UK Manufacturing PMI
Slightly better than expected.
2nd of June, Construction PMI
Better than expected (Highest level since February 2016).
5th of June, UK Services PMI
Worse than expected.
8th of June, UK General Elections
British Prime Minister Theresa May's Conservative Party lost its parliamentary majority in a general election, throwing the country's politics into turmoil and potentially disrupting Brexit negotiations.
9th of June, industrial production + manufacturing production
Worse than expected.
13th of June, UK CPI
Higher than expected.
14th of June, UK Job Market
Claimant Count Change better than expected, Average Earnings Index worse than expected.
15th of June, Retail Sales
Retail Sales worse than expected.
USD
Recent Facts:
See above.
AUD/USD
Eyes on U.S. Federal Reserve members’ speeches.
A large part of the gains in the Australian dollar was driven by the Country’s job market report (seen as stronger-than-expected). The strength caught investors by surprise and helped take AUD/USD out of its 0.757 psychological barrier to its strongest level in 2 months.
Australia GDP also better than expected but the performance came one day after the Reserve Bank of Australia (RBA) cautioned that growth "is expected to have slowed in the March quarter",
In the last meeting, the Reserve Bank of Australia held Interest Rates at 1.5% as expected but reporting that the current account widened to a deficit of A$3.1 billion, compared with a surplus of A$100 million seen for the first quarter.
Insisted over extension above 0.757 area seems destined to end and leave place to an exhaustion pattern, but an eventually breakout is possible and it depends closely on Oil prices’ future alignments. In the breakout scenario now ongoing, first Resistance is 0.768 and second target is 0.773. If price will be back below 0.757 then it is likely to see it dropping in area 0.748, first, and 0.740, finally.
Our special Fibo Retracements are confirming the following S/R levels against the monthly and weekly trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Neutral
1st Resistance: 0.7680
2nd Resistance: 0.7735
1st Support: 0.7480
2nd Support: 0.7408
AUD
Recent Facts:
1st of November, RBA Interest Rates Statement
RBA’s Governor Lowe signals tolerance for weak inflation and bets seem off for future rate cuts.
3rd of November, RBA Monetary Policy Statement + Retail Sales
RBA said it is focused on the medium-term inflation target.
Retail Sales better than expected.
8th of November, ELECTION OF THE 45th PRESIDENT OF THE UNITED STATES
Donald Trump elected President.
9th of November, Reserve Bank of New Zealand Interest Rate Decision + Monetary Policy Statement
Interest Rates cut to 1.75% from 2.00% as expected.
19th of December, Mid-Year Economic and Fiscal Outlook
Scott Morrison announced lower than an original prediction of A$37.1 billion, investors see it as promising to stave off a downgrade of its AAA (triple A) rating from S&P Global.
9th of January, Retail Sales
Worse than expected.
19th of January, Employment Change
Better than expected.
25th of January, CPI (Consumer Price Index measures the change in the price of goods and services from the perspective of the consumer)
Lower than expected.
1st of February, AIG Manufacturing Index
Worse than expected.
2nd of February, Building Approvals + Trade Balance
Better than expected.
7th of February, RBA Interest Rates Decision + RBA Rate Statement
RBA held steady as expected at a record low 1.50%, while noting better economic conditions with China.
8th of February, New Zealand Interest Rate Decision + RBNZ Monetary Policy Statement
Interest Rates unchanged and RBNZ’s agenda contains no changes for 2017.
16th of February, Employment Change
Better than expected.
28th of February, New Home Sales, Current Account, Private Sector Credit.
1st of March, Australia GDP
Better than expected.
16th of March, Employment Change + Unemployment Rate
Worse than expected.
2nd of April, Retail Sales
Worse than expected.
4th of April, RBA Interest Rate Decision
Interest Rates unchanged, as expected. Dovish tone in Philip Dowe’s Speech.
9th of April, Home Loans
Worse than expected.
13th of April, Australia Employment Change
Better than expected.
18th of April, RBA Meeting Minutes
Dovish.
26th of April, Australia CPI
Lower than expected.
2nd of May, RBA Interest Rate Statement
RBA holds Rates at 1.5%.
4th of May, Australia New Home Sales + Trade Balance
Worse than expected.
9th of May, Australia Retail Sales
Worse than expected.
18th of May, Australia Employment Change
Better than expected.
24th of May, Australia Construction Work Done
Worse than expected.
24th of May, Moody’s Credit Rating on China
Moody's Investors Service downgraded China's credit rating to A1 from Aa3, changing its outlook to stable from negative.
25th of May, OPEC Meeting
OPEC decided to extend production cuts by nine months to March 2018.
30th of May, Building Approvals + Private House Approvals
Better than expected.
1st of June, Australia Retail Sales
Better than expected.
6th of June, Reserve Bank Of Australia Interest Rate Decision and Statement
In the last meeting, the Reserve Bank of Australia held Interest Rates at 1.5% as expected, reporting that the current account’s deficit widened.
7th of June, Australia GDP
Better than expected.
15th of June, Australia Employment Change
Better than expected (3rd month in a row).
USD
Recent Facts:
See above.
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