FX News Today

German PPI falls 3% in February: The index of producer prices for industrial products fell by 3.0% compared with the corresponding month of the preceding year. In January 2016 the annual rate of change all over had been –2.4%.In February 2016 energy prices decreased by 9.4% compared with February 2015, prices of intermediate goods by 2.2%. In contrast prices of non-durable consumer goods rose by 0.2%, prices of capital goods by 0.7% and prices of durable consumer goods by 1.4%.The overall index disregarding energy decreased by 0.7% compared with February 2015.Compared with the preceding month the overall index fell by 0.5% in February 2016 (–0.7% in January 2016 and –0.5% in December 2015).

European Outlook: Asian stock markets moved broadly higher, with Japanese markets again the notable exception and weighed down by ongoing strength in the Yen. US and especially UK stock futures are also up and UK stock markets seem set to outperform again. Eurozone stocks failed to extend gains yesterday and especially the DAX was hit by the strength of the EUR, which climbed above 1.13 against the USD. With the round of central bank decisions out of the way markets can get down to closer evaluation of the measures and implications, but currency reactions already showed that the race to the bottom on rates doesn’t always have the desired effect. Oil continued to rally as WTI traded over $40 and the mood heading into the London session remains mostly risk-on, Brent crude prices have logged a three-month high at $41.69. The mood looks likely to continue with scheduled Fed speakers today being known doves.

BoE & SNB – Both in Wait and See Mode: BoE and SNB left policy on hold yesterday and the statements were if anything less dovish than some may have hoped for. The BoE left its implicit tightening bias in place, even if rate hike expectations have been pushed out into 2017 and the bank is effectively on hold. The SNB meanwhile noted a weaker growth environment and lowered its inflation projections, but argued that its current negative rate, coupled with ad hoc intervention on forex markets should be sufficient to cope with that.

 ECB’s Draghi “stands ready to use all instruments” in a timely repetition of last week’s dovish statements, arguing that the ECB’s package was very strong and will channel financing to the real economy, while interest rates will remain steady to lower for an extended time. Though he sees some signs of economy improvement, risks remain to the downside. The euro has pulled back from highs, though this merely confirms the FX games continue after BoJ’s Kuroda suggested rates could go as low as -0.5% under NIRP earlier this week and the BoJ made some inquiries into just what was driving the yen firmer yesterday.

Main Macro Events Today

• CAD CPI: We expect CPI, to slow to a 1.3% y/y pace in February (median +1.5%) after the 2.0% y/y growth pace in January that was the fastest annual CPI growth rate since November of 2014. CPI is seen rising 0.1% on a month comparable basis in February (median +0.2%) after the 0.2% gain in January. The BoC’s core CPI index is seen rising 0.7% m/m in February, consistent with recent moves in this not seasonally adjusted index during February, after the 0.3% gain in January. Annual core CPI growth is expected to expand at a 2.2% y/y rate in February (median 2.1%), up from the 2.0% pace in January. The expected core CPI figure would, of course, leave the measure above the BoC’s 2.0% midpoint. Governor Poloz has maintained that the elevated core CPI growth rates are transitory and not reflective of a tightening in supply conditions.
• US Michigan Consumer Sentiment: U.S. Michigan Consumer Sentiment Preview: The first release on Michigan Sentiment is out Friday and should show a rise to 92.0 (median 92.2) from 91.7 in February. Current conditions should be 106.9 from 106.8 in February and expectations should be 82.0 from 81.9 in February. The IBD/TIPP Poll for the month rose to 46.8 from 47.8 and we expect the Bloomberg Consumer Comfort survey to average 44.0 in March.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

European Outlook: Asian stock markets outside Japan moved higher overnight, following on from gains in the U.S. after the FOMC trimmed its dot plot to imply just two tightening’s in 2016, which aligns the Fed’s view with the market. Japanese markets were weighed down by renewed strength in the Yen, following the dovish Fed statement. U.S. and U.K. stock futures are also up and oil prices are starting to eye USD 39 per barrel. So good leads for European stock markets, but also bond futures and with the Fed statement out of the way the focus shifts to BoE and SNB meetings today.

Fed Trims Dots and Remains Cautious: The FOMC statement reflects ongoing caution on global economic and financial developments, though optimism was maintained on the domestic front, and especially with regard to the labor market. The Fed also raised the profile of inflation, which “picked up” but remains shy of its target. The Fed’s mostly downward forecast revisions for the dot-plot and GDP, along with steadier inflation and job outlooks, left the markets taking a dovish cue from the proceedings, though Yellen left open the door for a move as early as April. She also the Fed is “not activity debating or considering negative rates,” or looking into other methods of accommodation. The Fed still has a range of tools it can use if it finds itself back in that situation of needing to add more stimulus. The adoption and impact of negative rates by other central banks is being studied.

UK Chancellor Osborne announced GBP 3.5 bln in spending cuts as he presents the government’s 2016-17 budget. He said that cuts would be implemented towards the end of the current parliament, in 2019-20. On the Brexit issue, he argued that the UK is “better off” inside a “reformed” EU and that the official UK growth forecasts from the independent Office for Budget Responsibility were based on the country remaining within the union. UK growth was revised down to 2.0% for 2016, down from 2.4% forecast in November, and 2.2% in 2017, down from 2.5% previously envisaged. He quoted the OBR’s view that leaving the EU would “usher in an extended period of uncertainty.”

CPI better than expected. The 0.168% February US. CPI drop was upstaged by a sturdy 0.283% core price rise, as the expected 6.0% energy price drop and 0.2% food price rise accompanied hefty gains of 1.6% for apparel prices that extended a 0.6% January rise, a second consecutive 0.5% rise for medical care service prices, and a 0.3% rise for owners’ equivalent rent after four consecutive 0.2% increases. We saw 0.2% gains for new vehicle and tobacco prices.

Main Macro Events Today

• BoE Decision: There is a strong consensus for the BoE to stand pat on policy this week, and we expect the minutes to reveal a unanimous vote to maintain the repo rate at 0.5% (median same). This would make it exactly seven years the repo has been at its historic low. Weakness in the February PMI surveys and the benign inflation backdrop should ensure a dovish-tilted tone in the minutes, though still keeping the door open to an eventual rate hike, which markets are now discounting to be in Q1 next year. It will be interesting to see if there is any mention of “Brexit” risks, which kicked into gear following the PM Cameron’s renegotiated membership terms and consequence setting of a referendum data (June 23).September.
• SNB Decision: The SNB will have eyed the ECB’s move carefully and especially the fact that the deposit rate cut was rather modest and so far the impact on the CHF proved temporary, could allow the Swiss central bank to hold off with another rate cut at its policy meeting on Thursday. Much will depend on developments in forex markets and even if rates are on hold this week, the SNB has shown before that it can always act at short notice and outside its quarterly policy meetings.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

The improvement in stocks has run out of steam, which should keep bond futures supported. Asian stock markets are mostly slightly down, stock futures in the UK and the US are also heading south, after the BoJ kept policy on hold, while offering a somewhat bleaker picture of the economy and highlighting that inflation expectations are weakening. The door to further easing remains open then, but the BoJ’s decision to stay pat for now, is likely to be mirrored by other central banks this week. The Fed starts its two day meeting today and SNB and BoE will announce their policy decisions on Thursday, with policy expected to be kept on hold, leaving the focus on statements.

RBA – Upbeat on jobs but does not rule out rate cut. The Minutes from the last RBA meeting show that it does not rule out another rate cut. Employment has stalled in January, following a very strong end to 2015. “Nevertheless, conditions in the labour market had clearly improved since early 2015,” the RBA said. “Leading indicators of employment had increased further and were consistent with employment growth in the months ahead. “But the central bank said low inflation will allow it to cut the cash rate if jobs growth flattens out or the global economy goes into meltdown. “Continued low inflation would provide scope to ease policy further, should that be appropriate to lend support to demand,” the minutes said.

BoJ kept policy on hold, but signalled an implicit easing bias, by painting a bleaker picture of the economy and warning that inflation expectations are falling. The bank also announced that it will exempt around USD 90 bln in money-reserve funds (MRFs) – short term funds – from negative rates, after warnings that investment money would be driven into bank deposits. The pledge to increase base money at an annual rate of JPY 80 trillion was left in place. The BoJ said that while “Japan’s economy continues to recover moderately as a trend”, the pick up in exports, which was still seen in January, has paused, mainly due to slowing growth in emerging market economies. At the same time it said inflation expectations weakened recently. So the door to further easing is left open.

ECB ups pressure on governments to implement structural reforms. Bank of France head Villeroy stressed that monetary policy alone cannot revive the economy and said France needs reforms to boost conference. ECB’s Rimsevics also said that monetary policy can only buy time and that politicians need to act on reforms. Hardly anything new, but with the ECB effectively removing market pressure on governments Draghi finds that verbal pressure alone is a blunt tool.

 

Main Macro Events Today

• US PPI: February PPI is expected to decline by 0.3% (median -0.2%) in its Tuesday release with the core figure down -0.1% (median -0.2%). This compares to January figures which had the headline up 0.1% and the core up 0.4%. Data in line with our forecasts would result in a flat y/y headline with a 1.1% y/y pace of growth for the core. Oil price declines have tapered off but are still likely to weigh on the release.

• US Retail Sales: February retail sales data is out on Tuesday and the headline should decline 0.2% (median -0.1% with the ex-autos figure down 0.3% ( median -0.2%) for the month. This follows January figures of 0.2% for the headline and 0.1% for the ex-autos figure.

• US NY Fed Empire State Manufacturing Index: The March Empire State Index is out Tuesday and should reveal a headline increase to -12.0 (median -12.0) from -16.6 in February and -19.4 in January. Producer sentiment was strong over the course of the fall but weakened into the new year. We expect the ISM-adjusted average of all measures of sentiment to hold at 49 for a third month.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

ECB’s policy “bazooka” backfired at least yesterday, where a buffet of easing steps were at first embraced then later spurned by the markets. For a while it seemed like Draghi had found his magic touch again. By burying a rather modest deposit rate cut in a broad package of other stimulus package, including a new corporate bond purchase program, he managed to keep markets happy, bring in spreads and give stock markets a boost, but only for an hour or so. Peripheral government bonds, stressed banks and corporate bonds were the main beneficiaries. In the long run though Draghi’s eagerness to shield highly indebted countries and banks struggling with non-performing loans may come back to haunt the ECB and the Eurozone. It would appear Draghi did too good a job of signaling the moves in advance, which were clearly priced in, then followed by rapid unwinding on-the-fact. He also managed to confuse markets while he initially managed to bury the modest deposit rate cut in a host of other measures and implicit easing bias. He undid most of the good work by remarking that he doesn’t expect it to be necessary to cut rates again. Given the ECB’s track record, the only thing that means is that there won’t be another cut at the next meeting, and we would expect markets to settle down again today as the details of the stimulus package sink in. Today’s CPI number release from Germany won’t change the picture either as numbers were in line with expectations and mostly unchanged.

Japanese business sentiment deteriorated abruptly in the first quarter, the BSI Manufacturing Index indicated today. Financial market turmoil and slow demand globally had impacted negatively Japan’s flimsy economic recovery. The data pressures the policymakers to deploy extra stimulus measures to reflate an economy that is bordering on yet another recession. BSI Index measuring sentiment at large manufacturers came in at -7.9 in January-March, swinging from 3.8 in Q4 2015. BSI index is a joint survey by the Ministry of Finance and the Economic and Social Research Institute, an arm of the Cabinet Office.

OPEC, Non-OPEC meeting unlikely to happen on March 20 as previously scheduled, as Iran has yet to agree to the oil production freeze, according to sources cited on Reuters earlier. That sure could explain the reversal in NYMEX crude into the red by -1.9% and back below $38 bbl to the $37.50 area.

Canada’s erosion in Q4 capacity use was not a surprise, as the drop to 81.1% in Capacity Utilization Rate fit with the already revealed slowing in real Q4 GDP growth to an 0.8% pace (q/q, saar) from the 2.4% growth rate in Q3. Revisions were substantial in today’s report, but the pattern in 2015 remained intact: The post-recession Q4 2014 near term peak use rate was revised to 82.8% (was 83.3%), falling to 81.9% in Q1 (was 82.5%) and 80.5% in Q2 (was 81.4%) before rising to 81.6% in Q3 (was 82.0%).

 

Main Macro Events Today

• Canada Employment numbers: We expect employment to rise 10.0k in February (median same at +10.0k) after the 5.7k drop in January. The year started out in a mess, with crude oil prices plunging and global growth worries intensifying. Against that backdrop, total jobs dipped. A less dire backdrop of firmer oil prices and markets that were not melting down is expected to lead to some optimism, lifting employment in February. But the resource and manufacturing sectors remained a drag, which may leave another disappointing report.

• Baker Hughes Oil Rig Count: Trends in rig counts are significant clues for market participants in the oil and gas sector as they reveal the supply dynamics in the sector. Rig counts are reported week on Fridays. On March 7th the company announced that the international rig count for February 2016 was 1,018, down 27 from the 1,045 counted in January 2016, and down 257 from the 1,275 counted in February 2015. The worldwide rig count for February 2016 was 1,761, down 130 from the 1,891 counted in January 2016, and down 1,225 from the 2,986 counted in February 2015.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

German trade surplus narrows as exports continue to drop. Germany posted a sa trade surplus of EUR 18.8 bln in January, down from EUR 20.3 bln in the previous month. The narrowing reflects a second monthly drop in exports, which fell -0.5% m/m at the start of the year. Imports meanwhile rebounded and rose 1.2% m/m in January, after falling -1.6% m/m in December. This is nominal data that is impacted by oil prices and forex developments, but it confirms the trend of growing imports and slowing export demand, which means the German recovery is for once not export driven, but supported by consumption and lately also investment.

Reserve Bank of New Zealand (RBNZ) cut 25 bps to 2.25%, contrary to widespread expectations for no change. Rate cuts were anticipated this year, just not so soon. Today’s cut was due to a concern over eroding inflation expectations. And more could be in store: Governor Wheeler said “Further policy easing may be required to ensure that future average inflation settles near the middle of the target range. A further cut could come as early as next month on April 28.

China’s CPI accelerated to a 2.3% y/y pace in February from the 1.8% growth rate in January. While that left CPI expanding at the fastest pace since the middle of 2014, the gain was driven by food costs, which spiked higher during the week of Lunar New Year holidays. Colder weather also lifted food prices. Hence, the pick-up in the CPI growth rate should prove temporary. Underlying inflation remains tame, leaving ample leeway for the government to implement further monetary and fiscal stimulus this year. The PPI fell 4.9% y/y in February after the 5.3% drop in January, leaving the 48th consecutive decline.

There weren’t any real surprises from the Bank of Canada, as it left its policy rate unchanged at 0.50%. The key take-away from January, that risks to the inflation profile remained largely balanced, was repeated. Though the general tone of the announcement might have been a little more upbeat, there was still plenty of caution noted given downside global risks. Meanwhile, the S&P/TSX was the global outperformer (excluding Italy), rising almost 0.7%, doubling the gain on Wall Street, thanks to its heavy weighting in oil and commodities.

Main Macro Events Today

• ECB Interest Rate Decision: The ECB is widely expected to ease policy again today when updated set of staff projections will likely bring downward revisions to growth and inflation projections. A deposit rate cut of at least 10 bps together with the introduction of a tiered system to soften the impact is widely priced in. The ECB is also widely expected to widen monthly QE purchases but without a very large deposit rate cut or a change in the pool of assets, Draghi will eventually run into supply constraints, with German bonds the bottle neck the ECB has to funnel its monthly QE spending through unless the ECB abandons the rule of purchasing paper in line with the policy key. That, however, could be interpreted as outright state financing, and such a decoupling or too “exotic” moves could bring Draghi further into conflict with the Bundesbank, but refraining from radical steps risks disappointing markets.

• US Jobless Claims: Weekly US Jobless Claims (expectations 270k) and Continuing Jobless claims (expectations 2,218K) have been following a volatile downward trajectory since early October of last year. Weaker than expected data will add to the slowing path of rate hikes, better than expected will add to the NFP figures from last Friday and increase speculation regarding a move by the FED next week.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.