The Just Concluded week saw the UK officially trigger Article 50 which commences the official divorce of the UK from the European Union. In her letter to the European Council President, Donald Tusk, the British Prime Minister Theresa May cited her two main expectations of Economic Cooperation and Security Cooperation as part of the New Partnership deal with the EU. The Scottish Government has proposed a new referendum to determine their future in the U.K, Scottish Prime Minister Nicolai Sturgeon may submit a letter to The UK Parliament this week as regards this. We may see further pressure on the Cable going into this week.
In Europe, The Headline Inflation data fell 0.3% lower than the expected forecast of 1.8% y/y to come out at 1.5% y/y, this made the Fibre to fall against other Major currencies, last month’s data rose to 2% based on this data we expected to see continuity but the fall in this month’s data has pushed talks of tightening the accommodative policy further for now.
In the US, the Final GDP for Q4 came out 0.1% better than the expected data of 2% to come out at 2.1%, this gave a boost to the Greenback changing the bearish sentiment after the House failed to pass Donald trump’s Health Bill, also the Greenback faced further pressure when news got out that President Trump was looking for ways to punish currency manipulators.
Furthermore, the CAD GDP m/m for January beat expectations of 0.3% to come out at 0.6% coupled with rising Oil Prices added to the bullish undertone of the Loonie causing the Loonie to strengthen against other currencies on Friday.
Finally the Crude Oil maybe on a rise, as OPEC and Non-OPEC members agreed to extend the output cut from June by an extra 6 months, this caused the Crude Oil futures Market to strengthen. Saudi Arabia also promised to cut supply to the US by 300,000 bpd spilling into the inventory numbers in the US.
Looking ahead into the new week, we have some market moving indicators to look out for.
MONDAYAUD: (2.30AM) RETAIL SALES; With the pick-up in employment we may see a feed through into the retail sales numbers expecting it to beat expectations.
GBP: (9.30AM) MANUFACTURING PMI; We will be watching out for this data looking for signs of slack due to Brexit, if that is not in place the GBP should strengthen else we should see a sell-off
USD: (3.00PM) ISM MANUFACTURING PMI; with the strengthening Economy we should see the Manufacturing PMI post strong numbers probably better than expected portending further strength in the Buck.
CAD: (3.30PM) BUSINESS OUTLOOK SURVEY; With the Positive GDP numbers coupled with better than expected economic numbers, the Survey is surely going to be optimistic as we see development in the US feed into growth statistics in Canada. Hawkish Undertone is expected and should give a boost to the Lonnie.
AUD: (5.30AM) CASH RATE; A Hawkish comment should strengthen the AUSSIE, we expect an upbeat statement from the RBA Governor Phillip Lowe, consequent of the Global growth, Rising Commodity Prices, improving Job Numbers and Strong Consumer demand.
GBP: (9.30AM) CONSTRUCTION PMI; Looking out for Brexit pressures in this data.
AUD: (10.15AM) GOV PHILLIP LOWE SPEAKS; This is not the normal Press Conference that follows an MPC meeting, but a Dinner at the Melbourne Reserve Bank Dinner, fresh from an MPC meeting this could be a good place to get information that may rock the market.
CAD: (1.30PM) TRADE BALANCE; Rising commodity prices plus rising crude oil prices is giving a boost to Canadian exports, positive outcome expected.
NZD: (TENTATIVE) GDT (GLOBAL DAIRY TRADE) PRICE INDEX; We have been having disappointing releases, this shouldn’t be because of rising Global demand and Increase in Commodity prices. Positive data expected. Should strengthen the kiwi.
USD: (1.15PM) ADP NFP (NON-FARM PAYROLL); A better than forecasted data will see the Buck strengthen, looking for Numbers to feed through to Fridays Job data.
USD: (3.00PM) ISM NON-MANUFCTURING; Positive numbers expected
USOIL (WTI): (3.30PM) A drop in inventory is expected due to the planned US Supply cut by SAUDI ARABIA . API (AMERICAN PETROLEUM INSTITUE) should give us a heads up as to the outcome of this data by Tuesday evening.
USD: (7.00PM) MINUTES OF THE FOMC MEETING; Though the Statement was perceived to be less hawkish than expected, We will be expecting the meeting to give us insights as to what the FEDZ really think about the US Economy. Expected reaction is Bullish.
USD: (1.30PM) NFP (NON-FARM PAYROLL); Strong Job numbers is expected to come out today. The numbers will give rise to strong dollar demand.
CAD: (1.30PM) EMPLOYMENT DATA; Positive data expected from here. This would keep the trend of rising employment data.
CAD(3.00PM) IVEY PMI;