Daily Forex Fundamental Overview

Fundamental Analysis

EUR

“For this year in general, we expect a rise in the unemployment figure due to the large inflow of refugees we have seen over the last year”

- Johannes Gareis

The number of unemployed people in Germany continued to decline in April reaching a historic 25 years low despite the refugee crisis. The number of unemployed people in Germany dropped from March to April by 101,000 to 2.7 million, marking a 25 years' low. The unemployment rate remained at the record-low level of 6.2%. Meanwhile, a separate report showed price growth in Germany decelerated more than expected in April. Inflation in the Euro zone's powerhouse climbed 0.1% year-on-year in April, down from the 0.3% growth seen in March, according to the Federal Statistics Office. On a monthly basis, the measure trashed 0.2% in the reported month, down from the 0.8% rise recorded previously. The Harmonized Index of Consumer Prices showed inflation dropping 0.1% year-on-year, compared with March's 0.1% rise.

Separately, the Euro zone’s business climate improved less than expected in April. The European Commission’s Business Climate Index climbed to 0.13 in the reported month, compared with an upwardly revised 0.12 in March. At the same time, the economic sentiment in the Euro bloc increased to 103.9 in April, up from 103.0 registered in March.

USD

“The first quarter is going to be the worst quarter for consumption for all of 2016”

- RBC Capital Markets LLC

The US economy expanded in the first quarter at the slowest pace in two years due to a sharp pullback in business investment and sluggish global demand. Gross domestic product rose at a 0.5% seasonally adjusted annual rate in the first quarter, according to the Commerce Department. This is the government’s first of three estimates for the quarter before annual revisions in July. Consumers and the housing market kept the US economy from sliding backward, albeit only barely. Among the forces working against the US growth in recent months was a lacklustre demand from overseas and a strong Dollar that have led to a decline in exports, subtracting from growth.

After its meeting earlier in the week, the Fed provided a mixed review of the economy, saying in its statement that economic activity had slowed despite labour market improvement. Though the US central bank had entered the year with the plan to hike interest rates several times, it has so far refrained from any moves, a response to overseas volatility, particularly in China, and to the contradicting signals about US economic health. Analysts say the Fed could still decide to raise interest rates at its next meeting in June. The International Monetary Fund, in mid-April, estimated that the US economy would grow by 2.4% this year, slightly better than the pace of other developed economies.

NZD

“We expect inflation to strengthen as the effects of low oil prices drop out and as capacity pressures gradually build”

- RBNZ

New Zealand firms were more upbeat about the economic outlook this month as a sturdy construction sector remains central to the country's growth in the coming year, while retail, construction, and service firms felt the biggest boost in confidence. The ANZ Business Outlook survey showed that a net 6.2% of New Zealand companies were optimistic about general business conditions and the economy in April, up from 3.2% in March. Some 32% predict their own activity to increase, compared with 29% a month earlier. Construction is still the most optimistic sector in terms of the wider economy and its own activity, and residential investment intentions were unchanged at 36%, while commercial construction intentions slipped to 24% from 30%. ANZ report showed the agriculture sector was the most pessimistic with a net 27% anticipating the economy will deteriorate over the coming year, and just 6% expect their own activity to improve.

A separate report showed new residential building approvals fell steeply in March after climbing at the fastest rate in seven months in February. New Zealand building consents dropped a seasonally-adjusted 9.8% month-on-month in March, according to Statistics New Zealand, after surging a revised 10.3% in February.

 

 

 

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