February 2017 Market Overview
This month started with improved ADP Non-Farm Employment Change and Non-Farm Employment Change, ISM Manufacturing and Unemployment Claims. CB Consumer Confidence, Average Hourly Earnings m/m, ISM Non-Manufacturing PMI and Unemployment Rate came below Expectations. Fed Funds Rate remained at 0.75%. Second week saw improved Crude Oil Inventories, improved Unemployment Claims, while Preliminary UoM Consumer Sentiment disappointed.
This mid-month brought good news all around with improved PPI m/m, Retail Sales m/m, Core Retail Sales, CPI m/m and Core CPI m/m, Building Permits, Crude Oil Inventories and Filly Fed Manufacturing Index. FOMC Meeting Minutes were disappointed with cautious approach to fixed date on rate hike, Unemployment Claims were improved and Crude Oil Inventories came well below.
USD Index is potentially forming Head and Shoulder, with the neckline at 99.45 and the target around 95.05. Now dancing on 100 support.
The month started with reduced Manufacturing PMI but above expectations and reduced Caixin Manufacturing PMI. Trade Balance came at 355B, well above expectations. CPI y/y came at 2.5%, and above expectations of 2.4%.
German Ifo Business Climate came below expectations as did German ZEW Economic Sentiment and Flash GDP q/q. Second half of the month saw improved Flash Manufacturing PMI, Flash Services PMI and German Ifo Business Climate. Uncertainty with upcoming French and Dutch elections weighted on the Euro.
EurUsd reversed at 1.0847 resistance and slowly descended to the zone of support around 1.05, testing it twice.
The month started with Manufacturing PMI as expected followed by disappointing Construction PMI and Services PMI. Official Bank Rate remained at 0.25%. This was followed by improved Manufacturing Production m/m and Claimant Count Change, while CPI y/y, Average Earnings Index 3m/y and Retail Sales were disappointing. Second half of the month brought Improved Second Estimate GDP q/q.
GBPUSD after a short decent in the first week GBP spent the rest of the month consolidating.
First week saw disappointing Retail Sales, Interest Rate remained at 1.5%, and Mid-month brought well improved Employment Change and Unemployment Rate. Private Capital Expenditure q/q came below expectations.
AudUsd ascended to the resistance zone around 0.773, where it remained, retesting it at the end of the month
Week ahead in the News
USD: CB Consumer Confidence, Preliminary GDP q/q, ISM Manufacturing and Non-Manufacturing PMI, Unemployment Claims and Crude Oil Inventories.
CNY: Caixin Manufacturing PMI; GBP: Manufacturing, Construction and Services PMI, AUD: GDP q/q, CAD: GDP m/m, BOC Rate Statement, NZD: Employment Change q/q, Unemployment Rate .