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02/06/2017 Fundamental Analysis
02/06/2017
Fundamental Analysis
Major events this week (May 29 - June 2)
Friday, 02 June 2017 07:30 GMT
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Day/Time (GMT)
Flag Currency Event Period Actual Forecast Previ-ous
MONDAY
01:00 pm EUR ECB President Draghi Speaks
TUESDAY
01:30 am AUD Building Approvals m/m April 4.4% 3.2% -10.3%
07:00 am CHF KOF Economic Barometer May 101.6 106.2 106.3
02:00 pm USD CB Consumer Confidence May 117.9 120.1 119.4
09:00 pm NZD RBNZ Financial Stability Report
WEDNESDAY
09:00 am EUR Core CPI Flash Estimate y/y May 0.9% 1.0% 1.2%
01:30 pm CAD GDP m/m March 0.5% 0.3% 0.0%
THURSDAY
01:30 am AUD Retail Sales m/m April 1.0% 0.3% -0.2%
08:30 am GBP Manufacturing PMI May 56.7 56.5 57.3
12:15 pm USD ADP Non-Farm Employment Change May 253K 181K 174K
FRIDAY
08:30 am GBP Construction PMI May 52.7 53.1
12:30 pm CAD Trade Balance April 0.0B -0.1B
12:30 pm USD Non-Farm Employment Change April 186K 211K
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Key highlights of the week ended May 26
United Kingdom
On Monday, the British Prime Minister Theresa May had an interview with the BBC channel’s Andrew Neil. The interviewer asked the UK Prime Minister why the Conservative Party included a social care cap in its campaign, while it refused to do so at the very beginning of the rally, but May said she was honest with the nation and just wanted to clarify what the Party put in its manifesto. During the interview, the British PM stated that people wanted to see the stronger economy that could pay for the National Health Service and the public services. The Office for National Statistics reported that the economy grew at a seasonally adjusted quarterly pace of 0.2% in the first quarter, the slowest pace of growth since the beginning of 2016, compared to an originally reported 0.3% expansion pace. Meanwhile, market analysts expected the March quarter’s pace to remain unchanged. Euro zone
The Munich-based Ifo Institute for Economic Research reported that its Business Climate Index climbed to 114.6 points in the reported month, following April’s 113.0 and surpassing analysts’ expectations for an increase to 113.1. That marked the strongest reading since 1991. May’s jump was mainly driven by Emmanuel Macron’s victory in the French 2017 Presidential Election, which boosted confidence across the Euro zone.
Canada
Statistics Canada reported that the value of Canadian wholesale trade climbed 0.9% in March, surpassing the C$60B mark for the first time, up from the preceding month’s upwardly revised gain of just 0.3%. Nevertheless, March’s figure missed analysts’ expectations, as they anticipated an increase of 1.1% during the reported month. As markets expected, the Bank of Canada left its monetary policy unchanged as its meeting on Wednesday, suggesting that economic growth will likely slow in the June quarter. In a dovish statement, the Bank expressed concerns over capacity utilisation and subdued growth, but noted strong consumer spending, the prosperous housing market and solid job growth. Nevertheless, policymakers voted to keep the benchmark Overnight Rate at a record low of 0.50%.
United States
The Department of Commerce reported on Tuesday that sales of new houses dropped 11.4% to a seasonally adjusted annualised pace of 569K units in April, following the prior month’s upwardly revised pace of 642K units, the highest since October 2007, and falling behind expectations for a decrease to a 611K-unit pace. On an annual basis, new home sales were up 0.5% in April. The Energy Information Administration reported that US crude stockpiles fell 4.4M barrels in the week ended May 19, following the preceding week’s decrease of 1.8M barrels and surpassing expectations for a 2.4M barrel decline. Thus, inventories hit 516.3M barrels, the lowest level since mid-February, suggesting that the OPEC production cut deal began working. The Labour Department reported that initial jobless claims rose 1K to 234% in the week ended May 19, following the preceding week’s upwardly revised 233K. Meanwhile, market analysts anticipated an increase of 5K to 238K during the reported week. That marked the 116th of claims remaining below the 300K level, the longest stretch since 1973. The Commerce Department reported on Friday that Q1 GDP growth came in at a seasonally adjusted annualised pace of 1.2%, compared to an originally reported pace of 0.7%. Meanwhile, analysts expected the economy to expand 0.9% in the reported quarter. However, that was the worst performance over the past 12 months. A separate report released by the Commerce Department showed that new orders for US-manufactured durable goods dropped 0.7% last month, whereas orders for core durable goods fell 0.4%.
Friday, 02 June 2017 07:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
GBP
Impact
British manufacturing activity slows in May but less than expected
High
Manufacturing activity in the United Kingdom fell less than
expected last month, a private survey revealed on Thursday.
Markit reported that its PMI for the British manufacturing
sector came in at 56.7 points in May, the strongest since June
2014, down from the preceding month’s 57.3. However,
market analysts anticipated a bigger drop to 56.5 during the
reported month. Furthermore, Markit noted that new order
growth remained strong, whereas the pace of job creations hit
its 35-month high in May. The Markit Senior Economist Rob
Dobson said that the strong PMI data suggested that the
British economy gained positive momentum in the second
quarter. Strong manufacturing activity is set to provide a boost
to the UK Prime Minister Theresa May’s ruling Conservative
Party ahead of the 2017 General Election, which is scheduled
to take place on June 8. Markit also noted that domestic
demand remained the key driver of growth in the
manufacturing sector. Apart from that, the report showed that
manufacturers’ optimism over the economy hit a 20-month
high last month.
Trends* Q1 17 Q2 17 Q3 17
MAX 1.84 1.32 1.62
75% percentile 1.25 1.26 1.28
Median 1.22 1.22 1.24
25% percentile 1.20 1.20 1.18
MIN 1.07 1.03 1.02
* the data is based on international banks’ forecasts
01.06 open
price 01.06 close
price % change
GBP/USD 1.2890 1.2883 -0.05%
EUR/GBP 0.8723 0.8703 -0.23%
GBP/CAD 1.7402 1.7410 0.05%
GBP/JPY 142.80 143.47 0.47%
Friday, 02 June 2017 07:30 GMT
“The sector should have sufficient momentum to see it through the uncertainty generated by the current unexpected general election and into the start of Brexit negotiations later in the quarter.” — Rob Dobson, IHS Markit
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
USD
Impact
US companies create 253K new jobs last month vs 181K forecast
High
US private companies created more than expected jobs last
month, official figures showed on Thursday. The ADP National
Employment Report revealed that the US private sector added
253K new jobs to the economy in May, compared to the
preceding month’s downwardly revised gain of 174K positions.
Meanwhile, analysts expected private firms to create 181K new
jobs during the reported month. The Moody’s Analytics Chief
Economist Mark Zandi said that wage growth would likely
accelerate “through the year into 2018” amid the tightening
labour market. Strong job creation is expected to comfy the
Federal Reserve and force it to raise interest rates further in
the upcoming months. The ADP data come ahead of the
Labour Department’s non-farm payrolls report, scheduled to be
released on Friday. According to analysts, both US private and
public sector created 181K new jobs last month, following
April’s gain of 211K new positions. Moreover, the jobless rate
is set to come in at 4.4% for May, unchanged from the
previous month. Economists suggest that the US labour
market is close to or at full employment.
Trends* Q1 17 Q2 17 Q3 17
MAX 1.42 1.45 1.45
75% percentile 1.37 1.38 1.40
Median 1.35 1.36 1.36
25% percentile 1.32 1.32 1.31
MIN 0.84 1.22 1.20
* the data is based on international banks’ forecasts
01.06 open
price 01.06 close
price % change
AUD/USD 0.7431 0.7374 -0.77%
USD/CHF 0.9678 0.9715 0.38%
USD/JPY 110.78 111.37 0.53%
NZD/USD 0.7084 0.7060 -0.34%
Friday, 02 June 2017 07:30 GMT
“The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force. Increasingly, businesses’ number one challenge will be a shortage of labor.” — Mark Zandi, Moody’s Analytics
Major events previous week (May 22 - 26)
Friday, 02 June 2017 07:30 GMT
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
Day/Time (GMT)
Flag Currency Event Period Actual Forecast Previ-ous
MONDAY
06:00 pm GBP Prime Minister May Speaks
TUESDAY
08:00 am EUR German Ifo Business Climate May 114.6 113.1 112.9
12:30 pm CAD Wholesale Sales m/m March 0.9% 1.1% -0.2%
02:00 pm USD New Home Sales April 569K 611K 621K
WEDNESDAY
08:30 am EUR ECB President Draghi Speaks
02:00 pm CAD BOC Rate Statement
02:30 pm USD Crude Oil Inventories Last week -4.4M -2.4M -1.8M
THURSDAY
02:00 am NZD Annual Budget Release
08:30 am GBP Second Estimate GDP q/q Q1 2017 0.2% 0.3% 0.3%
02:30 pm USD Unemployment Claims Last week 234K 238K 233K
FRIDAY
12:30 pm USD Prelim GDP q/q April 1.2% 0.9% 0.7%
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
EXPLANATIONS
Chart SMA (55) – Simple Moving Average of 55 peri-
ods SMA (200) – Simple Moving Average of 200
periods
Third Quartile – separates 25% of the highest forecasts
Second Quartile – the median price based on the projections of the industry
First Quartile – separates 25% of the lowest forecasts
Dukascopy Bank SA, Route de Pre-Bois 20, International Center Cointrin, Entrance H, 1215 Geneva 15, Switzerland tel: +41 (0) 22 799 4888, fax: +41 (0) 22 799 4880 [email protected]
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