US economy start 2016 on the back foot

Market Brief

US dollar continued to lose ground against across the board after data showed the US economy expanded at the slowest since the second quarter of 2009. The gross domestic product increased at a 0.5% annualised rate - versus 0.7% expected - after rising 1.4% in the fourth quarter of 2015 as personal consumption failed to boost growth in spite of a low gasoline price. The dollar index, which measures the value of the US dollar against a basket of currency, fell another 0.34% during the Asian session and is currently trying to validate a break of the key support at around 93.80 (low from mid-October 2014). The dollar index has lost more than 7% since December last year as investors started to price in a slower path of interest rate increase - we do expect more than one rate hike in 2016 and it is already overly optimistic in our view. EUR/USD gained momentum and reached 1.1397 in Tokyo. Given the continuous flow of disappointing economic data from the US, we expect the pair would soon test once again the 1.1495 before heading towards the next one, which lies at 1.1714 (high from August last year).

The South Korean won was one of the worst performing currency among the Asian complex after March’s industrial production came in on the soft side, contracting 2.2%m/m, while the market anticipated a contraction of -0.5%. On a year-over-year basis the industrial output shrank -1.5%, missing estimates of +0.2%, while previous month’s reading was downwardly revised to 2.2% as exports continue to shrink as the Chinese economy slowdown. USD/KRW rose 1,139 from 1,1136.

In New Zealand, business confidence printed higher in April, rising from 3.2 in the previous month to 6.2. However, NZD/USD traded range bound during the Asian session between 0.6956 and 0.6989. In Australia, AUD/USD edged up 0.38% despite weak PPI numbers. The price producer index contracted 0.2%q/q in the March quarter, down from +0.3% in the previous one.

On the equity market, equities were trading in negative territory across Asian markets with the Shanghai and Shenzhen Composites down -0.25% and -0.02% respectively. In Japan, markets were close for Shōwa Day. In South Korea, the KOSPI fell 0.34%, while in Singapore the STI slid 0.65%. In Europe, equity futures are suffering a small sell-off, following the negative lead from Wall-Street.

Today traders will be watching trade balance from Turkey; KOF leading indicator from Switzerland; GDP from Spain; unemployment rate from Norway; mortgage approvals from UK; CPI and GDP from the Eurozone; CPI from Italy; key rate from Russia; trade balance from South Africa; personal income and spending, PCE deflator and Michigan Index.

Global Indexes	Current Level	% Change
Hang Seng Index	21111.4	-1.29
Shanghai Index	2938.323	-0.25
FTSE futures	6221.5	-0.78
DAX futures	10270.5	-0.7
SMI Futures	7966	-1.08
CAC futures	4451.5	-1.1
S&P future	2073.8	0.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Indexes	Current Level	% Change
Gold	1277.43	0.88
Silver	17.82	1.5
VIX	15.22	10.53
Crude wti	46.2	0.37
USD Index	93.3	-0.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Today's Calendar	Estimates	Previous	Country/GMT
DE Mar Unemployment Rate SA	-	3,50%	DKK/07:00
DE Mar Unemployment Rate Gross Rate	-	4,30%	DKK/07:00
TU Mar Trade Balance	-5.00b	-3.17b	TRY/07:00
SZ Apr KOF Leading Indicator	102,5	102,5	CHF/07:00
SP 1Q P GDP QoQ	0,70%	0,80%	EUR/07:00
SP 1Q P GDP YoY	3,30%	3,50%	EUR/07:00
SW Feb Wages Non-Manual Workers YoY	-	-	SEK/07:30
SW January and February Wages will be released on the same day.	-	-	SEK/07:30
UK BOE's Gracie Speaks at SRB Conference in Brussels	-	-	GBP/07:30
SZ SNB's Thomas Jordan Speaks at Annual General Meeting in Bern	-	-	CHF/08:00
RU Apr 22 Money Supply Narrow Def	-	8.51t	RUB/08:00
NO Apr Unemployment Rate	3,30%	3,30%	NOK/08:00
SP Feb Current Account Balance	-	-0.7b	EUR/08:00
IT Mar P Unemployment Rate	11,60%	11,70%	EUR/08:00
NO Mar Credit Indicator Growth YoY	5,00%	5,20%	NOK/08:00
NO May Norges Bank Daily FX Purchases	-	-900m	NOK/08:00
NO Norges Bank Regional Phone Survey	-	-	NOK/08:00
UK Mar Net Lending Sec. on Dwellings	3.7b	3.6b	GBP/08:30
UK Mar Mortgage Approvals	74.2k	73.9k	GBP/08:30
UK Mar Money Supply M4 MoM	-	0,90%	GBP/08:30
UK Mar M4 Money Supply YoY	-	2,00%	GBP/08:30
UK Mar M4 Ex IOFCs 3M Annualised	6,00%	5,00%	GBP/08:30
EC Mar Unemployment Rate	10,30%	10,30%	EUR/09:00
EC Apr CPI Estimate YoY	-0,10%	-	EUR/09:00
EC Apr A CPI Core YoY	0,90%	1,00%	EUR/09:00
EC 1Q A GDP SA QoQ	0,40%	0,30%	EUR/09:00
EC 1Q A GDP SA YoY	1,40%	1,60%	EUR/09:00
EC ECB Governing Council's Weidmann Speaks in Munich	-	-	EUR/09:00
IT Apr P CPI NIC incl. tobacco MoM	0,20%	0,20%	EUR/09:00
IT Apr P CPI NIC incl. tobacco YoY	-0,20%	-0,20%	EUR/09:00
IT Apr P CPI EU Harmonized MoM	0,50%	2,00%	EUR/09:00
IT Apr P CPI EU Harmonized YoY	-0,10%	-0,20%	EUR/09:00
IT Mar PPI MoM	-	-0,50%	EUR/10:00
IT Mar PPI YoY	-	-4,10%	EUR/10:00
RU Apr 29 Key Rate	11,00%	11,00%	RUB/10:30
US Fed's Robert Kaplan Speaks in London at Monetary Forum	-	-	USD/10:30
SA Mar Trade Balance Rand	-1.9b	-1.1b	ZAR/12:00
SA Mar South Africa Budget	4.79b	16.39b	ZAR/12:00
BZ Mar National Unemployment Rate	10,70%	10,20%	BRL/12:00
UK BOE Deputy Governor Cunliffe Speaks at SRB Conference	-	-	GBP/12:00
BZ Mar PPI Manufacturing MoM	-	-0,57%	BRL/12:00
BZ Mar PPI Manufacturing YoY	-	9,70%	BRL/12:00
US 1Q Employment Cost Index	0,60%	0,60%	USD/12:30
US Mar Personal Income	0,30%	0,20%	USD/12:30
CA Mar Industrial Product Price MoM	0,50%	-1,10%	CAD/12:30
US Mar Personal Spending	0,20%	0,10%	USD/12:30
CA Mar Raw Materials Price Index MoM	3,70%	-2,60%	CAD/12:30
US Mar Real Personal Spending	0,10%	0,20%	USD/12:30
CA Feb GDP MoM	-0,20%	0,60%	CAD/12:30
US Mar PCE Deflator MoM	0,10%	-0,10%	USD/12:30
CA Feb GDP YoY	1,50%	1,50%	CAD/12:30
US Mar PCE Deflator YoY	0,80%	1,00%	USD/12:30
US Mar PCE Core MoM	0,10%	0,10%	USD/12:30
US Mar PCE Core YoY	1,60%	1,70%	USD/12:30
US Apr ISM Milwaukee	-	57,78	USD/13:00
BZ Mar Primary Budget Balance	-9.5b	-23.0b	BRL/13:30
BZ Mar Nominal Budget Balance	-11.7b	-52.8b	BRL/13:30
BZ Mar Net Debt % GDP	38,10%	36,80%	BRL/13:30
US Apr Chicago Purchasing Manager	52,6	53,6	USD/13:45
US Revisions: Retail Sales	-	-	USD/14:00
US Apr F U. of Mich. Sentiment	90	89,7	USD/14:00
US Apr F U. of Mich. Current Conditions	-	105,4	USD/14:00
US Apr F U. of Mich. Expectations	-	79,6	USD/14:00
US Apr F U. of Mich. 1 Yr Inflation	-	2,70%	USD/14:00
US Apr F U. of Mich. 5-10 Yr Inflation	-	2,50%	USD/14:00
CH Mar Leading Index	-	99	CNY/22:00
IN Mar Eight Infrastructure Industries	-	5,70%	INR/22:00
AU Australia's Budget Deficit Estimated A$35b	-	-	AUD/22:00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Currency Tech

EURUSD
R 2: 1.1714
R 1: 1.1465
CURRENT: 1.1396
S 1: 1.1217
S 2: 1.1144

GBPUSD
R 2: 1.4959
R 1: 1.4668
CURRENT: 1.4643
S 1: 1.4300
S 2: 1.4132

USDJPY
R 2: 112.68
R 1: 111.91
CURRENT: 106.94
S 1: 105.23
S 2: 100.78

USDCHF
R 2: 1.0093
R 1: 0.9913
CURRENT: 0.9621
S 1: 0.9476
S 2: 0.9259

• S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot