Weekly Outlook 26th of March - 30th of March, 2018

2018-03-26

Last week, the Dollar mostly lost its position relative to the main basket of currencies - the biggest weakness was against the Canadian dollar -1.8%, the British Pound - 1.5%, Euro-0.6%, Japan Yen -1.25% . New Zealand dollar -0.45%, Swiss Franc -0.70%.


The dollar fell significantly on Wednesday amid a statement by the Fed, it was decided to raise the interest rate by 0.25% to 1.75%, and another two rate hikes were announced this year that did not justify the hope of another three rate increases, slightly raised the forecast for long-term rates, to a level of 2.75% - 3.0%. Fewer forecasts of inflation in the Fed predict the annual inflation rate at the level of 2.1% next year against 2% in the previous forecast. In addition, the US President signed a decree on imposing a 25% duty on imported goods from China, amounting to 50 billion dollars, to which China responded with duty on 128 goods from the US, which led to a strong drop in US indices - Dow Jones showed a decline in 2.94%, the Nikkei index fell by almost 1000 points -4.53%. Yet at the end of the week, the US Department of Commerce reported growth, more than expected in February, of orders for basic capital goods. Orders for non-military capital goods, except for aircraft, increased by 1.8%, with a forecast of 0.8%. The volume of orders for basic capital goods increased by 7.4%, shipments increased by 1.4%, orders for cars increased by 1.6%, for cars and components by 1.6%.


Deputy Head of the Central Bank of Japan Vakatabe said that the strengthening of inflation is inadequate, the Central Bank of Japan should clearly state its position on this matter. Inflation in Japan is projected to increase from 1.4% to 1.5% in February, core inflation increased from 0.4% to 0.5% confirming the forecasts.


The euro was not able to take advantage of the weakening of the dollar against the background of not unambiguous statistics in the Eurozone. Weak data on business activity in the private sector of the Eurozone, Germany and France. The expansion in the eurozone the worst for the whole year, the composite index fell 1.8 points compared to February, the PMI index in the services sector fell 1.2 points with a fall forecast of 0.2, the PMI in the industrial sector fell 2 points forecast of 0.5, which was the worst indicator for 8 months. In Germany, business confidence is deteriorating for 2 consecutive months, although in general it remains at a high level - the business climate index fell to 114.7 from 115.4 in February, the current conditions index fell to 125.9, the expectations index remained at the forecast level in 104.4.

The British Pound has traditionally been strengthened by pessimistic statements about Brexit, certain agreements have been reached, representatives of both sides have announced the harmonization of a two-year transition period, a decision on the rights of British and European citizens, although the issue of the Irish border remains open. In addition, during the week, reports on the economy of the country were published, consumer prices in February grew by 0.3% less than in January, the total wage increased by 2.8%, while the total growth is expected to grow by 3% in the first quarter. Similarly, the British government is satisfied with the temporary abolition of steel tariffs by the US, and are confident that the cancellation will act not on a temporary but on an ongoing basis.

We bring to your attention a number of news, which, in the opinion of the analyst, will have an impact on the movement of trading instruments.

 

Monday 26 March
Germany - Import price index
USA - Index of national activity of the Federal Reserve Bank of Chicago, placement of promissory notes, presentation by the representative of the Federal Reserve, speech by a member of the Open Market Committee of the Federal Reserve.

 

Tuesday 27 March
Australia - Speech by the Deputy Head of the RBA
Eurozone - indicators of the business climate, optimism in the industry, moods in the economy, confidence in business circles.
USA - Housing Price Index, the index of business activity in the manufacturing sector, the report of the oil institute.

 

Wednesday 28 March
New Zealand - Index of business optimism from RBNZ, forecast of activity from the National Bank.
Germany - The index from the marketing company Gfk is built on the basis of a survey of consumers to assess their level of confidence in the economy of the country.
Switzerland - Index of expectations ZEW is an indicator published by the Center for European Economic Studies and assessing the business climate, the employment market situation and other aspects that have an impact on day-to-day business in Switzerland.
US - annual data on GDP, the price index of GDP, the index of prices for personal consumption expenditure, a statement by the representative of the Federal Reserve.

 

Thursday March 29
New Zealand - Construction Permission, published by the Bureau of Statistics of New Zealand, estimates the number of permits issued for the launch of new construction projects. It is considered a leading indicator of the housing market.
Japan - Data on retail sales, Foreign investment, Investments in foreign shares.
Australia - private sector lending
Switzerland - Index of leading indicators, is based on 12 main economic indicators. Used to assess the economic state of Switzerland.
Germany - data on unemployment, consumer price index.
United Kingdom - GDP data.
US - Expenditures on personal consumption, primary and repeated jobless claims, price index.

 

Friday 30 March
Japan - Consumer price index, unemployment rate.
USA - report on oil platforms.