A review of the week past
and the week ahead

Welcome to City Index with Tony Sycamore

Tuesday 14thth August 2018


What mattered last week:

  • Temporary easing of U.S.-China trade tension fears as Chinese foreign exchange reserves as well as Chinese exports and imports were better than expected in July.
  • Donald Trump announced the doubling of metal tariffs against Turkey. The latest instalment in the ongoing dispute between Turkey and the U.S. over the imprisonment of an American Pastor. 
  • In response, the Turkish lira fell by almost 20 per cent on Friday building on earlier losses for most of 2018, fuelled by concerns over economic mismanagement as well as intervention from President Erdogan on central bank policy decisions.
  • The EURUSD fell below the key 1.1500 support region, on reports that ECB officials are concerned about European Banks exposure to Turkey.
  • The U.S. imposed further restrictions on Russia in response to the chemical nerve-agent attack in the UK, which prompted a 5.5% rally in USD/RUB.
  • The RBNZ delivered a dovish surprise to the markets by pushing back the start of rate hikes from Q3 2019 to Q3 2020, citing weaker growth and declining business confidence.
  • A reliable dove in recent years, Federal Reserve Bank President Charles Evans made hawkish comments stating that the U.S. economy is performing “very well” and with inflation now back above 2%, raising interest rates to “somewhat restrictive” levels is appropriate.

For the week ahead, the key events are:

Australia: NAB business confidence (Tuesday), Westpac consumer confidence and wage price index (Wednesday). Then follows labour market data (Thursday). The unemployment rate is expected to remain at 5.4% aided by a 15,000 rise in jobs. We also have Reserve Bank of Australia Governor Phillip Lowe before the House of Representatives Standing Committee on Economics (Friday).

Australian June half earnings continues with reports from six of the best performers of 2018, CSL, IAG, Wesfarmers, Cochlear, Woodside and ASX.

New Zealand: A quiet week after the excitement of last weeks RBNZ with PPI (Friday) the only data of note.

China: Retail sales, IP and fixed asset investment (Tuesday). Following a soft retails sales number in May (8.6%) retail sales bounced back in June. The rebound is expected to continue in July with the market looking for an increase of 9.2%, boosted by lower import duties on autos which came into effect July 1.

Japan: IP (Tuesday), balance of trade (Thursday).

U.S: Retail sales and IP (Wednesday). Forecasts for both seem a little on the low side, with markets expectations of 0.1% for retail sales and 0.3% for IP. Then follows housing starts and Philly Fed manufacturing (Thursday) and consumer sentiment (Friday). Keep in mind, housing starts fell 12.3% in June, and the market is looking for a strong bounce back of +7.4% in July.

Canada: CPI (Friday) expectations are for a subdued 0.1% mom increase in the headline number and 2.5% yoy.  
Euro area: EA preliminary 2Q GDP, industrial production as well as the German ZEW business survey (Tuesday). Then follows region-wide balance of trade numbers (Thursday) and the final EA inflation numbers (Friday). 

UK: Labour market data (Tuesday), PPI and CPI data (Wednesday) and then retail sales (Thursday) with the market looking for a rebound back to 0.2% this month after a fall of -0.5% in June.

About TECHFX TRADERS

The session will be run by Tony Sycamore founder of TECHFX TRADERS. Tony has over 20 years’ experience trading primarily at Goldman Sachs and he also worked in senior Institutional roles at Commonwealth Bank and BNP Paribas. His experience has allowed him to see and work with some of the biggest global traders.

Finalist – Best Bank FX Research & Strategy
Tony was the only Australian finalist nominated for Best Bank FX Research & Strategy at the 2016 Technical Analyst awards.

Finalists: Commonwealth Bank of Australia – Tony Sycamore, Director Institutional FX • Banque Pictet & Cie • Credit Suisse RBC Capital Markets • Royal Bank of Scotland • Scotia Bank

Tony Sycamore

Disclaimer

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