Jan 22, 2017 - Weekly Macro W4 (PMIs, CPIs, GDPs, and UK Supreme Court ruling on triggering Article 50)

We have plenty of interesting data next week among other PMIs, CPIs, GDPs and US housing. However Brexit could steal the headlines again as the UK Supreme Court is due to decide whether the government may use Royal Prerogative to trigger Article 50. The ongoing earnings season is also worth to watch with a lot of big names among others McDonald's, Banco Santander, Alibaba, Alphabet, UBS, Microsoft and many others. Investors will also follow closely first days of Donald Trump in the office as he promised many radical steps right from the start of his presidency.

Monday

Japan will kick-start the week with Industrial activity and Leading Economic index. Both of minor importance but as beginning of the week is usually “data-free”, there could be some moves sparked by these. In the afternoon we have Canadian Wholesale Sales, but as it is quite volatile indicator, only a big surprise may have significant impact. If you would consider to keep positions open O/N don’t forget about Mr. Draghi in the evening speaking in Italy.

Tuesday

It’s going to be a PMI day starting with Japan, then France, Germany and EZ and in the afternoon US PMIs but as last week the Brexit will be in the spotlights. Very important will be the UK Supreme Court Brexit ruling about the government appeal against the High Court ruling which blocked the Royal Prerogative being used to trigger Article 50. If the Supreme Court ruling blocks the RP, this would mean that Ms. May will have to leave the decision about triggering Article 50 for the parliament. In extreme situation that could turn Brexit into Bremain … so be ready for eventual fireworks. In the afternoon US Existing Home Sales which last month hit more than 6 years high and it’s definitely a positive sign. The analysts forecast a slight seasonal drop which wouldn’t however mean reversal of the positive trend. In the evening the first of the regular Crude reports. The API Crude oil stock could move the Crude and oil currency crosses like CAD, NOK.

Wednesday

We start the day with Australian consumer inflation (CPI) after midnight. The quarterly data ticked up recently and this could mean a challenge for the RBA aiming to boost the economy and curb the housing bubble the same time. Analyst doesn’t expect any major change but a surprise could easily move AUD crosses both directions. In Europe, the German Ifo Business Climate will be released in the morning and actually the index is higher than it was in 2007-2008, just before the crises. Germans seems to be optimistic despite the risk on the horizon: Britain out, Trump in … and elections all over Europe where the traditional parties will be challenged by anti-establishment forces. However business leaders in Europe’s strongest economy do not seem to care. In the afternoon, we have EIA Crude inventories and later the evening, CPI from New Zealand which is still stubbornly low.

Thursday

We will not have anything from Asia and the first notable data will be the Spanish Unemployment that could be much more closely watched given the speculations about eventual ECB tapering. Unemployment rate in Spain dropped in October below 20% but analysts don’t expect further decline. Definitely the weak euro helps the southern countries to boost their economies. Later in the morning, we will get the UK Prelim GDP figures with minor monthly slowdown expected. The afternoon will be about the US, most important data weekly Unemployment Claims (which probably can’t go much lower, although the employment rate is still 5% below the highs in 2000) and the New Home Sales (which is in stable uptrend despite a few weaker months recently). Around midnight the Statistics Bureau of Japan will release national and Tokyo Core CPI which is declining from 2015 – one of the major problems of the BoJ.

Friday

For comparison the BoJ will release its own Core CPI and even though this indicator is not sub-zero the downtrend in the rate of price level change seems to be very strong. The main data of the day is the first estimate of the US growth. The US Advance GDP will show whether the surprisingly good figure from last quarter was a one-time shot or the economy is accelerating much stronger than most of the analysts predicted at the beginning of the last year. At the same time we have Durable Goods Orders number which is expected to stabilise around 0.5%. As the last significant data will be the results of the consumer survey provided by the University of Michigan, it has several components, but the most watched is Consumer Sentiment. As the optimism of US consumers skyrocketed after Donald Trump won the presidential election, the indicator is expected to hold close to its maximum levels. 

Good Luck and remember to watch your risk and be consistent

Mr. Tech Man

DISCLAIMER: This material was created for informational purposes only and represents the Land of Trading team’s view of the past and current economic and capital market environment. It is not an investment advice and should not be viewed that way at all, and the creators of this material cannot be held liable for any potential losses resulting from trading, where despite this disclaimer someone would consider this material as an investment advice. All rights reserved ©2016. 

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