11 Mar: Poor NFP takes the wind out of the US$. Busy week ahead. Brexit, US/EU CPI in focus.

By | March 11, 2019

 

The US$ and stockmarkets were generally weaker on Friday after  the data showed that the US employment growth stalled in February, with the NFP creating only 20K jobs, adding to signs of a sharp slowdown in economic activity in the first quarter. It was not all bad news though, as the previous months figure was unusually large (304K) and was revised up by 12K, so the 2 month average of 168K was not far from the expectations of 180K. The headline unemployment rate was at 3.8% vs 3.9% expected, while average hourly earnings came in at +0.4%mm (3.4%yy) vs +0.3% (3.3%yy) exp, both better than expected.

The US dollar was soft on all fronts with the exception of Sterling, which remained heavy because of the ongoing Brexit uncertainly. US stocks were down by around 0.5%/0.9%, while commodities had a mixed Friday session, with the metals higher – Gold (+1.1%), Silver (+2.1 %), while WTI had a volatile ride but finished the day down by 1%. Stocks did not like the data but eventually recovered as the session went on and ended the session more or less flat.

The coming week will see a relatively steady flow of data but there will be something on each day of the week to keep traders alert.

Monday will start quietly in Asia and Europe, with just the US January Retail Sales to provide direction, while Tuesday will focus on the US February CPI and the UK Parliamentary vote on Brexit, which seems highly unlikely to be passed without any fundamental change regarding the Irish backstop issue, and will only add to the uncertainty. Before then though, Fed Chair Jerome Powell will be speaking early in the Asian time zone. In terms of data, the Australian Home Loan data (Jan) and the NAB Business Conditions/Confidence (Feb) will be closely watched, as will the UK Manufacturing/Industrial Production. Wednesday will begin with the Australian WBC Consumer Confidence and the China Retail Sales/Industrial Production figures for February, to be followed by the EU Industrial Production and the US Durable Goods Orders and PPI. Thursday will see the Australian Consumer Inflation Expectation, the China Fixed Asset Investment, German CPI/HICP and the US New Home Sales and Jobless Claims figures, while Friday will finish up with the BOJ Meeting/Interest Rate Decision, EU CPI, US Capacity Utilisation/Industrial Production and the Michigan Consumer Sentiment Index. Have a good week.

Economic data highlights will include:

Mon: NZ Electronic Card Retail Sales, Japan Preliminary Machine Tool Orders, Eurogroup Meeting, German Industrial Production, Current Account, Trade Balance, US Retail Sales, Business Inventories

Tue: US Fed Chair Powell, Speech, Australian Home Loans, Investment Lending for Homes, NAB Business Conditions/Confidence China Foreign Direct Investment, EcoFin Meeting, UK Manufacturing/Industrial Production, Goods Trade Balance, Industrial Production, US CPI, US NFIB Business Optimism Index, UK Parliamentary Brexit vote, API Weekly Crude Oil Stock Inventory

Wed: NZ Food Price Index, China Retail Sales, Japan Tertiary Industry Index, EU Industrial Production, US PPI, Durable Goods Orders, Construction Spending, EIA Crude Oil Stocks Weekly Change

Thur: Australian Consumer Inflation Expectation, Japan Machinery Orders, China Fixed Asset Investment, German CPI/HICP, US Jobless Claims, Import/Export Index, New Home Sales

Fri: NZ Business PMI, NZ Visitor Arrivals, China House Price Index, BOJ Meeting/Interest Rate Decision, EU CPI, US New York State Empire Mfg Index, Capacity Utilisation, Michigan Consumer Sentiment Index, Baker Hughes Oil Rig Count

CURRENCIES
EURUSD: 1.1233
Res  1.1260  1.1295  1.1325
Sup  1.1200  1.1150  1.1175
USDJPY: 111.14
Res  111.40  111.70  112.00
Sup  111.00  110.75  110.50
GBPUSD: 1.3015
Res  1.3050  1.3100  1.3145
Sup  1.2990  1.2955  1.2915
USDCHF: 1.0082
Res  1.0100  1.0125  1.0150
Sup  1.0065  1.0040  1.0010
AUDUSD: 0.7044
Res  0.7065  0.7090  0.7115
Sup  0.7020  0.7000  0.6975
NZDUSD: 0.6804
Res  0.6820  0.6840  0.6855
Sup  0.6790  0.6770  0.6745
INDICES / COMMODITIES
S&P.fs: 2746.78
Res  2760.00  2775.00  2785.00
Sup  2735.00  2720.00  2710.00
DJ30.fs: 25496.00
Res  25700.00  25890.00  26120.00
Sup  25205.00  25000.00  24795.00
SPI200.fs: 6185
Res  6210  6245  6285
Sup  6130  6165  6095
XAUUSD: 1299.18
Res  1300.00  1305.00  1310.00
Sup  1295.00  1290.00  1285.00
XAGUSD: 15.34
Res  15.40  15.50  15.65
Sup  15.25  15.15  15.00
WTI.fs: 55.99
Res  56.55  57.30  58.15
Sup  55.20  54.40  53.35