Jan 9, 2017 - Weekly Macro W2

After a quiet year-end we started the New Year in a pretty busy tone. The solid employment report on Friday helped to support equities and USD. The first full trading week ahead with less data. Some of them, however, could be key market movers. Especially Chinese inflation and Trade balance, UK Manufacturing and Industrial production and US Unemployment, Retail Sales and PPI could be volatility boosters. 

MONDAY

The first day is typically not very packed with data but Aussie traders should be watching Australian housing figures. The Building Approvals were falling the last 2 months indicating a cooling housing market. The housing boom was one of key concerns of policy makers in RBA. Later the day the house price index from the UK and European Unemployment figures may move the market. The later is expected to hold below 10%. The Earnings season will start too with Alcoa reporting its results after US close at 5 PM. Beware equity indices could move in the next weeks as investors responding to some big surprises. 

TUESDAY

We start again with Australia, the Retail Sales will be released after midnight and it will be interesting to watch whether it will hold around recent 0.5% growth levels. More important will be however the Chinese inflation released an hour later. The trends in CPI and PPI are positive and growth is expected to maintain (Consumers) or even accelerate (Producers). The US Job openings will add additional colour to the US job market picture which seems to reached full employment according to data from last few months. The Crude report from API will be important regarding the real supply situation on the oil market, as reports shows a lot of tankers were waiting for unloading during last week of the year.     

WEDNESDAY

Quiet Asian session is expected and we will get probably first volatility booster only after Europe opens. UK Manufacturing and Industrial production will be released, both of them recorded significant declines despite the weak pound. A rebound is expected but if the result will disappoint we can see pound weakness in all the crosses. In the afternoon the EIA Crude inventories will again be watched closely by oil traders as we need to see how much of the black gold was hold unloaded, to get the real supply picture. The Crude price is at breakeven levels where most of the producers are already profitable and Money Managers hold huge long positions in both WTI and Brent. Rig counts are also increasing gradualy so keep an eye on this report, as a significant increase in the inventories with Commodity Index rebalancing this week may result in moves to the downside.

   

THURSDAY

The ANZ Commodity Price Index will kick off the Asian session which could be a mover for both NZD and AUD. Despite these are NZ figures, mining is an important part of the industry in both countries. The European Morning will be rather boring, after lunch we have ECB minutes which is expected to be a non-event. From overseas we have Canadian house prices which keep rising (housing bubble is one of the key problems of the economy) and US unemployment claims where given the state of job market we don’t expect any big change. The same time are scheduled two Fed speakers, so there could come some unexpected volatility even after the data.

FRIDAY

At midnight Yellen is due to speak in Washington DC which could cause sudden moves given the low liquidity at the beginning of the Asian session. We expect Chinese Trade balance later the day, time not scheduled yet. Here we need a good number to confirm investors’ confidence put in the Chinese economy in the recent weeks. The afternoon could be particularly interesting with US Core Retail sales and PPI data as well as 1.5 hour later Consumer Sentiment from the University of Michigan.

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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