Fundamental Analysis
By Orbex
The US Dollar came out tops last week staging one of the strongest comebacks after declining since late March. Boosted by stronger than expected housing data, the FOMC meeting minutes which was a non-event and a hawkish than expected speech by Janet Yellen late on Friday helped the Greenback to reverse from the lows. CPI data released on Friday also saw the core inflation rise 1.8% on an annualized basis reiterating the fact that the Fed would continue looking at the economic data before deciding when to hike the US Federal Funds benchmark rates.
The British Pound and the Euro were the weakest currencies last week as the ECB officials elaborated on their QE plans for the next couple of months while the Pound Sterling succumbed to speeches from various BoE officials. A better than expected retail sales which saw the Pound Sterling rally across the board failed to keep the currency supported as the BoE officials took turns on Friday
Fundamentals for the Week 25 – 29 May
| Date | Time | Currency | Detail | Expected | Previous |
| 25-May | 02:50 | JPY | Trade Balance | -0.38T | 0.00T |
| 08:00 | JPY | BOJ Monthly Report | |||
| 18:00 | USD | FOMC Member Fischer Speaks | |||
| 26-May | 01:45 | NZD | Trade Balance | 105M | 631M |
| 02:50 | JPY | SPPI y/y | 0.60% | 3.20% | |
| 10:15 | CHF | Employment Level | 4.21M | 4.23M | |
| 13:00 | GBP | CBI Realized Sales | 19 | 12 | |
| 15:30 | USD | Core Durable Goods Orders m/m | 0.50% | 0.30% | |
| USD | Durable Goods Orders m/m | -0.40% | 4.70% | ||
| 16:00 | USD | HPI m/m | 0.70% | 0.70% | |
| USD | S&P/CS Composite-20 HPI y/y | 4.60% | 5.00% | ||
| 16:45 | USD | Flash Services PMI | 57 | 57.4 | |
| 17:00 | USD | CB Consumer Confidence | 95.3 | 95.2 | |
| USD | New Home Sales | 501K | 481K | ||
| USD | Richmond Manufacturing Index | 0 | -3 | ||
| 19:30 | USD | FOMC Member Fischer Speaks | |||
| 27-May | 02:50 | JPY | Monetary Policy Meeting Minutes | ||
| 03:10 | USD | FOMC Member Lacker Speaks | |||
| 03:30 | AUD | MI Leading Index m/m | -0.30% | ||
| 03:45 | AUD | RBA Deputy Gov Lowe Speaks | |||
| 04:30 | AUD | Construction Work Done q/q | -1.40% | -0.20% | |
| 09:00 | CHF | UBS Consumption Indicator | 1.35 | ||
| EUR | GfK German Consumer Climate | 10 | 10.1 | ||
| 27th-3rd | GBP | Nationwide HPI m/m | 1.00% | ||
| Day 1 | ALL | G7 Meetings | |||
| 13:00 | EUR | ECB Financial Stability Report | |||
| Tentative | EUR | German 30-y Bond Auction | 1.07|1.3 | ||
| 16:00 | EUR | Belgian NBB Business Climate | -5.7 | -6.2 | |
| 17:00 | CAD | BOC Rate Statement | |||
| CAD | Overnight Rate | 0.75% | 0.75% | ||
| 28-May | 02:50 | JPY | Retail Sales y/y | 5.90% | -9.70% |
| 04:30 | AUD | Private Capital Expenditure q/q | -2.30% | -2.20% | |
| 09:00 | CHF | Trade Balance | 2.77B | 2.52B | |
| EUR | German Import Prices m/m | 0.50% | 1.00% | ||
| 09:20 | USD | FOMC Member Williams Speaks | |||
| 11:30 | GBP | Second Estimate GDP q/q | 0.40% | 0.30% | |
| GBP | Prelim Business Investment q/q | 1.10% | -0.90% | ||
| GBP | BBA Mortgage Approvals | 39.2K | 38.8K | ||
| GBP | Index of Services 3m/3m | 0.50% | 0.70% | ||
| Tentative | EUR | Italian 10-y Bond Auction | 1.40|1.6 | ||
| Day 2 | ALL | G7 Meetings | |||
| 15:30 | CAD | Current Account | -13.9B | ||
| CAD | RMPI m/m | -0.90% | |||
| CAD | IPPI m/m | 0.30% | |||
| USD | Unemployment Claims | 272K | 274K | ||
| 17:00 | USD | Pending Home Sales m/m | 0.80% | 1.10% | |
| 17:30 | USD | Natural Gas Storage | 92B | ||
| 18:00 | USD | Crude Oil Inventories | -2.7M | ||
| 29-May | 01:45 | NZD | Building Consents m/m | 11.00% | |
| 02:05 | GBP | GfK Consumer Confidence | 4 | 4 | |
| 02:30 | JPY | Household Spending y/y | 3.10% | -10.60% | |
| JPY | Tokyo Core CPI y/y | 0.20% | 0.40% | ||
| JPY | National Core CPI y/y | 0.20% | 2.20% | ||
| JPY | Unemployment Rate | 3.40% | 3.40% | ||
| 02:50 | JPY | Prelim Industrial Production m/m | 1.10% | -0.80% | |
| 04:00 | AUD | HIA New Home Sales m/m | 4.40% | ||
| NZD | ANZ Business Confidence | 30.2 | |||
| 04:30 | AUD | Private Sector Credit m/m | 0.50% | 0.50% | |
| 08:00 | JPY | Housing Starts y/y | 0.10% | 0.70% | |
| 08:45 | CHF | GDP q/q | 0.00% | 0.60% | |
| 09:00 | EUR | German Retail Sales m/m | |||
| 09:45 | EUR | French Consumer Spending m/m | 0.40% | -0.60% | |
| 10:00 | CHF | KOF Economic Barometer | 90.3 | 89.5 | |
| EUR | Spanish Flash CPI y/y | -0.50% | -0.60% | ||
| 11:00 | EUR | M3 Money Supply y/y | 4.90% | 4.60% | |
| EUR | Private Loans y/y | 0.40% | 0.10% | ||
| 12:00 | EUR | Italian Prelim CPI m/m | 0.10% | 0.30% | |
| Day 3 | ALL | G7 Meetings | |||
| 15:30 | CAD | GDP m/m | 0.20% | 0.00% | |
| USD | Prelim GDP q/q | -0.90% | 0.20% | ||
| USD | Prelim GDP Price Index q/q | -0.10% | -0.10% | ||
| 16:45 | USD | Chicago PMI | 53.1 | 52.3 | |
| 17:00 | USD | Revised UoM Consumer Sentiment | 90 | 88.6 | |
| USD | Revised UoM Inflation Expectations | 2.90% |
Currencies/Events to Watch this Week
BoC Rate Statement & GDP: The Bank of Canada will hold its monthly monetary policy meeting on the 27th of May with the consensus expecting that the Canadian Central Bank will not change the interest rates. However, BoC Governor Poloz is expected to be dovish on the economy. On the 29th May, the Canadian monthly GDP is expected to rise 0.2% for the month of April. The Canadian dollar lost ground to the Greenback last week despite a strong rally in Crude Oil prices. Recent inflation data from the country was also weak and this is expected to play into the BoC’s dovish view at its rate statement.
Slow week for the Euro: This week there is not much of economic data scheduled from Europe and the markets will see a short week due to a bank holiday on Monday in some of the major European economies. Focus could likely shift to Greece among other things.
UK GDP second estimates: After falling short of expectations during the first estimate, markets will be looking to the second GDP estimates for the first quarter with expectations of a rise to 0.4% from 0.3% first estimates. A modest pickup in the revised GDP should be able to boost the Pound Sterling. The UK is also closed on Monday.
Busy week for the Yen: Data from Japan this week includes retail sales and national Core CPI and unemployment rate, all of which could provide investors with enough data that could be taken into consideration during the next BoJ’s monetary policy meeting. So far, the Japanese Central Bank has remained optimistic that the inflation target og 2% will be reached and in this regards, the retail sales data and the national core CPI could offer early hints into the larger inflation puzzle.
US Revised GDP: Markets head into a new week with the US second revised GDP on investor’s minds. It is largely expected that we could see a downward revised GDP heading into a contraction, which if true could spell one of the weakest quarterly GDP growth in recent years. Besides the GDP data due late in the week on Friday, Core durable goods orders and Fed speak will keep the markets busy. The US markets will be closed on Monday.
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