Its another NFP week! Fundamental forecast for Mar 30- Apr 3


Weekly fundamental, CPI, ECB, Fundamental forecast, GDP, Mario Draghi,unemployment claims

Mario Draghi ‘s testimony on monetary policy before the European Parliament’s Economic and Monetary Affairs Committee, in Brussels saw the ECB chief refuse claims that the Central Bank is blackmailing Greece and compounding the pressure on the country. This accusation was based on the withdrawal of a waiver that entitled the Central Bank to accept the Greece’s junk-rated debt as collateral as the exchange came based on indications that the Greece on the verge of default. He justified the ECB’s decision by his statement; “Let me disagree with you about everything you said,” “It’s bit rich when you look at our exposure to Greece” which totals 104 billion euros ($113.8 billion), Draghi says. “What sort of blackmail is this? We haven’t created any rule for Greece, rules were in place and they’ve been applied.” Draghi also put to rest claims that the newly launched QE may be hampered by insufficient bonds to execute the program. He said; ‘‘We see no signs that there will not be enough bonds for us to purchase, Feedback from market participants so far suggests that implementation has been very smooth and that market liquidity remains ample.’’ He is obviously sounding more and more upbeat about the Euro zone since the commencement of QE. The Euro strengthened after the speech.

Greece’s Prime Minister Alexis Tsipras, met with Angela Merkel, receiving a warm welcome from the German chancellor. She urged him to follow the path set out by Greece’s creditors, stating that Greece belongs in Europe and its her desire that the economy succeeds.

FOMC Vice Chair, Stanley Fischer’s speech last week served to reiterate what we already know, that the Feds are “widely expected” to commence raising U.S. interest rates this year, as policymakers chose to decide on subsequent policy tightening or loosening on a meeting-to-meeting basis, citing significant economic progress and a very strong labor market. He also mentioned that the strong dollar may offset some benefits of monetary accommodation. Fed chair Yellen’s speech on Friday followed same pattern and she adopted same diction as her vice Fischer stating that she expects conditions may warrant an increase in the federal funds rate target sometime this year, generally anticipating that a rather gradual rise in the federal funds rate will be appropriate over the next few years, depending on the economic situation which will determine the pattern of the hikes. The U.S. GDP data showed that the economy grew by 2.2% annualized pace in the fourth quarter, attributed to the largest gain in consumer spending in eight years. Corporate profits fell in the last three months of the year, the worst annual performance since the recession. The previous GDP figure was also revised to 2.2%.

NEW ZEALAND- NZD

The economy of this nation is highly dependent on the service sector which accounts for about 63% of its total GDP. On Tuesday, the ANZ Business Confidence which surveys about 1,500 businesses, asking respondents to rate the relative 12-month economic outlook will be released. This index has been on a steady rise for months and came at 34.4 in the previous month, the highest level recorded in the last six months. Global Dairy Trade price index which measures the change in the average price of dairy products sold at auction. The last release came at -8.8%, the lowest level recorded in a while.

UK- GBP

The Current Account is definitely a key figure to watch as the UK elections draw closer. Besides the economic impact of this figure, parties involve will use this as a tool to argue for against their positions. The previous release was a 27 billion deficit, and the new is forecast to come at a 21.1 billion deficit. On Wednesday, the Manufacturing PMI, a survey of about 600 purchasing managers which asks them to rate the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories is due for release and forecast at 54.5. On Thursday, the construction purchasing managers index which has been positive for the last two months is expected to improve further from 60.1 in February, to 60.4 in March.

AUDUSD closed below 0.78 after reaching a high of 0.7937 last week

AUDUSD

US-USD

Its another NFP week. The first high impact release for the week is the CB Consumer Confidence is estimated at 96.6, a slight increase from previous 96.4 as consumer confidence declined more than expected in February. Its another labor data week. On Wednesday, the ADP Non-Farm Employment which measures the estimated change in the number of employed people during the previous month, excluding the farming industry and government is forecast at 231k, a potential increase from 213 in March. On Thursday, we have the ISM Manufacturing PMI which worsened last month and is expected to slightly fall further to 52.5 from previous 52.9. On Thursday, the Trade Balance is due, forecast to show a difference in value between imported and exported goods and services during the reported month of -41.5 while the Unemployment Claims is expected to come at 285k, which is still below 300k, therefore showing the continued strength of the labour market situation. Further confirmation of this strength is expected to be evident in the Non-Farm Employment Change result on Friday which is expected to show 251k people added jobs. Still a positive reading and the Unemployment Rate is forecast to remain at 5.5%. The labor market obviously is at a strong point, which is one of the criteria for the Feds to begin raising rates. At this point, the markets may begin to weigh in on the USD in anticipation of the rate hikes expected to come soon.

USDCAD Weekly Outlook: It is up to NFP

CANADA-CAD

On Tuesday, the countries GDP m/m is estimated to show a 0.2% change in the inflation-adjusted value of all goods and services produced by the economy, a slight decrease from 0.3% in the previous month. On Thursday, the Trade Balance will be due, estimated to show 1.8 % deficit in value between imported and exported goods during the reported month which is potentially a slight improvement from -2.5% recorded in the previous month.

It worthy of note that Greece is expected to submit a renewed reform proposal today, Monday March 30. Hopefully, this will be acceptable to its eurozone counterparts to enable the indebted nation access to additional bailout funds as Greece is expected to run out of cash by April 8. Will Greece prove it is worthy of additional funds? We will wait and see. The Euro is expected to the choppy, hence Euro pairs may not have direct movement.

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