25 Feb: Markets hopeful of a positive outcome to US/China trade talks. Secondary US data in focus, Monday.

By | February 25, 2019


Risk assets were able to squeeze higher on Friday on hopes of a positive outcome from the US/China trade talks although by the end of the week no final agreement had been arrived at. Over the weekend, Donald Trump added to those hopes, by adding, in a tweet, that the trade talks on Saturday were “very productive”. The Chinese Vice -Premier, Liu He, also said after his White House meeting with Trump, that there had been “great progress”, so we can probably expect an extension to the “risk-on” mood at the start of the coming week.

The Aud$ and the Nzd$ were the main beneficiaries in the FX markets, with the Aud$ also underpinned after China denied reports that the Dalian port had banned Australian coal imports. Elsewhere in the FX markets, the other currencies were choppy but largely unchanged. The US stock indices ended up by around 0.8%, with the DJI ending the week above 26000 for the first time since November, while WTI put on 0.5%.

The coming week is going to be busy, with plenty to come from both the EU and the US – as well as the never ending Brexit negotiations. From the EU the main events will be the UK Inflation Report Hearing and a speech from the UK PM, Theresa May (Tue), the German CPI/HICP (Wed) and the EU Mfg PMIs and EU CPI (Fri). The US will focus on the semi-annual testimony to Congress from Fed Chair Powell (Tue/Wed), the Q4 GDP and the Personal Consumption/Expenditure Index (Fri). There will be plenty of other data too, although Monday will get off to a slow start with just the NZ Q4 Retail Sales and then, later in the day, the US Wholesale Inventories, Chicago Fed National Activity Index, Dallas Fed Mfg Business Climate. Have a good week.

Economic data highlights will include:

Mon: NZ Q4 Retail Sales, US Wholesale Inventories, Chicago Fed National Activity Index, Dallas Fed Mfg Business Climate

Tue: German Consumer Confidence, UK Inflation Report Hearing, UK PM, May, Speech, US Building Permits, Housing Starts, Case Shiller House Price Index, Richmond Fed Mfg Index, API weekly Crude Oil Stock Inventory

Wed: NZ Trade Balance, Australian Construction Work Done – Q4, EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, US Wholesale Inventories, Durable Goods, Pending Home Sales, Fed Chair Powell testimony to Congress

Thur: Japan Retail Trade, Australian Private Sector Credit, Personal Consumption/Expenditure Index – Q4, New Home Sales, China NBS Mfg/Non-Mfg PMIs, German CPI/HICP, US Preliminary Q4 GDP, Personal Consumption/Expenditure Index, Chicago Purchasing Managers Index, Kansas Fed Mfg Activity, Weekly Jobless Claims

Fri: AIG Performance of Services Index, NZ Building Permits, Terms of Trade, Tokyo CPI, Unemployment, Industrial Production, Nikkei Mfg PMI, RBA Commodity Index, German Import/Export Index, Unemployment, EU Mfg PMIs, UK Consumer Credit, EU CPI, Unemployment, US Personal Consumption/Expenditure Index, Personal Income/Spending, ISM Mfg PMI/Prices Paid, Construction Spending, Michigan Consumer Sentiment Index   That’s about it. Have a good week.

EURUSD: 1.1330
Res  1.1350  1.1370  1.1390
Sup  1.1310  1.1275  1.1295
USDJPY: 110.65
Res  110.95  111.15  111.40
Sup  110.50  110.25  109.95
GBPUSD: 1.3053
Res  1.3075  1.3110  1.3160
Sup  1.3010  1.2980  1.2940
USDCHF: 1.0004
Res  1.0025  1.0045  1.0060
Sup  0.9995  0.9980  0.9960
AUDUSD: 0.7128
Res  0.7145  0.7165  0.7185
Sup  0.7100  0.7075  0.7050
NZDUSD: 0.6839
Res  0.6860  0.6875  0.6895
Sup  0.6825  0.6810  0.6790
S&P.fs: 2794.78
Res  2800.00  2815.00  2830.00
Sup  2785.00  2770.00  2755.00
DJ30.fs: 26035.50
Res  26095.00  26260.00  26445.00
Sup  25870.00  25740.00  25595.00
SPI200.fs: 6136
Res  6150  6175  6200
Sup  6120  6095  6070
XAUUSD: 1327.74
Res  1335.00  1340.00  1345.00
Sup  1320.00  1315.00  1310.00
XAGUSD: 15.91
Res  16.00  16.10  16.20
Sup  15.80  15.70  15.60
WTI.fs: 57.05
Res  58.15  59.50  61.00
Sup  55.80  54.45  52.80