UK Prelim GDP and NZD Trade balance

tradersRBA Gov Steven spoke at the Australian Financial Review Banking & Wealth Summit. He generally sounded positive on the general economic situation. What is really being anticipated is when the Reserve Bank of Australia will raise rates as well. Unlike its close neighbor, New Zealand which hopes to leave rate fixed for some time, Australia is likely to raise rates soon to spur the economy. Following the recent perceived economic weakness which can be partly attributed to weakness in China-its largest trade partner-as well as the drop in oil prices. The Aussie started the week on positive note against the USD and may be setting up for a breakout from its recent consolidation on the daily charts.

UK Prelim GDP q/q will be highly watched as elections draw closer and both sides are seeking for bargaining chips with the electorate. The first quarter GDP estimate will be released today at 8:30 am GMT. The final quarter GDP of 2014  was revised upwards from 0.5% to 0.6%. Economists estimate a 0.5% release as growth rate is expected to fall a bit despite the strong industrial production in January and February and strong retail sales figures in Q1. Inflation remains at zero level and may enter deflationary zone soon as interest rates remain at record low levels. The pound has experienced some strength in past weeks. A disappointing data here could weight negatively on the pound.

Last month, New Zealand’s Trade Balance disappointed as total goods exports fell $608 million (13%) to $3.9 billion in February 2015 compared with February 2014, bringing the difference in value between imported and exported goods during the reported month to 50m, slightly higher than previous of 33M but worse than forecast of 375M. This month, we expect a reasonable recovery of the trade balance in-line with forecast of 315M.

The most anticipated news for the week is the FOMC statement on Wednesday. The focus will be to listen for clues by the Feds and how they acknowledge the recent bout of disappointing data from the US. Will the Feds down play the recent weakness as a temporary situation? Or will they seek more time to study additional data before making a decision on the actual economic condition? The dollar has been falling recently. Good data release through the week, along with an hawkish view from the Feds could boost the currency back to positivity. Today by 2:00 PM GMT, we have the CB Consumer Confidence scheduled for release.

By 12:45 GMT, BOC Gov Poloz Speaks.


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