What mattered last week:
- Worries over the spread of the Coronavirus from China saw the S&P 500 finish the week almost 1% lower on profit taking.
- Asian equities experienced larger falls with the Shanghai Composite down 3.2%, the Hang Seng down almost 4% and Japan 1% lower.
- Coronavirus impacting on the eve of Chinese New Year Holidays and at a time when Chinese economic data was beginning to show signs of recovery.
- Concerns over the impact of the Coronavirus on demand in Asia saw crude oil futures fall -7.5% to near $54.00 a barrel.
- While yields on 10 year U.S. bonds fell back to recent lows near 1.70%.
- The ASX200 made fresh all-time highs, before closing the week largely unchanged near 7090.
- The AUDUSD remained on the back foot, closing below .6850 while the Japanese Yen found safety haven buyers near recent lows.
For the week ahead, the key events are:
Australia: NAB business confidence (Tuesday), Q4 CPI (Wednesday), PPI and private sector credit (Friday.
- AU Q4 CPI (Wednesday): Headline inflation is expected to rise by 0.6% q/q with y/y steady at 1.7% in Q4. The trimmed mean is forecast to rise 0.4% q/q ensuring the annual rate of 1.5% is well below the bottom of the RBA’s target band.
New Zealand: Balance of trade (Thursday), ANZ Roy Morgan consumer confidence (Friday).
China: NBS Manufacturing and Non-Manufacturing PMI’s (Friday).
Japan: Consumer confidence (Wednesday), employment, industrial production, retail sales (Friday).
U.S.: New home sales (Monday), durable goods, S&P Case-Shiller home price, CB consumer confidence (Tuesday), pending home sales (Wednesday), FOMC interest rate meeting (Thursday), personal income, personal spending and core PCE (Friday).
- FOMC Meeting (Thursday morning): No change to policy is expected at this meeting. Powell will give a press conference after the meeting that is likely to reiterate the Feds, strong “on hold” bias.
December quarter earnings season continues with reports from heavyweights including Apple, Microsoft, Amazon and Facebook.
Canada: GDP and PPI (Friday).
- GDP (Fri): The market is looking for a 0.1% rise in November after a disappointing 0.1% m/m decline in October.
Euro Area: German IFO (Monday), GFK Consumer confidence (Wednesday), German and EA employment (Thursday), German and EA inflation as well as EA GDP (Friday).
- German IFO (Monday): The IFO data survey of over 7000 business is expected to see a modest improvement to 97 in January from 96.3 in December.
UK:Bank of England interest rate meeting (Thursday).
Bank of England interest rate meeting (Thursday): This is a ‘live’ meeting after some dovish commentary from MPC members in recent weeks, including Carney. At the margin, the expectation is for interest rates to remain unchanged at 0.75%.
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
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