There are a lot of potential storms that could impact the markets this week from the political, to the monetary, to actual weather. On Monday, stocks and commodities spun their wheels awaiting developments, while currencies stole the spotlight.
The Euro spent the day under pressure after weekend developments that showed Euroskeptic parties picking up wind at their backs. A diplomatic incident between the Netherlands and Turkey just before Wednesday’s Dutch election has Wilder’s Freedom Party regaining momentum while a French poll showed Marine Le Pen regaining her first round lead in the polls.
Meanwhile, the Pound gained ground as the Brexit bill returned to the house of Commons amid speculation the lower house could reject amendments proposed by the house of Lords that the street has seen as weakening the government’s negotiating position. Reports on the timing of triggering Article 50 to start Brexit negotiations have varied from as soon as tomorrow to later in the month. UK employment and a Bank of England meeting could attract attention as well this week.
The USD generally continued to weaken even though Friday’s strong US employment figures build the case not only for a rate increase on Wednesday, but for additional hikes through the year. The Dollar has been pricing in four increases this year but it seems some traders aren’t even bothering to wait for the dot plot Wednesday to take profits off the table.
North American trading could be lighter Tuesday with a big storm bearing down on the northeast which has already resulted in the cancellation of hundreds of flights. German Chancellor Merkel’s visit to Washington has been postponed to Friday due to the big storm.
China sensitive markets appear set to attract attention from traders today with January/February retail sales and industrial production reports due. Traders should note that because the date of Lunar New year fluctuates from year to year, China publishes data for the first two months of the year on a combined basis. The Hang Seng had outperformed yesterday, bouncing back ahead of the news suggesting strengthening expectations. Other data that could attract some attention include business survey results for Germany and Australia plus US producer price inflation.
There have been no major economic announcements after the US close today.
Significant announcements released overnight include:
Italy industrial production (0.5%) vs street 3.2%
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
11:30 am AEDT Australia NAB business conditions previous 16
11:30 am AEDT Australia NAB business confidence previous 10
1:00 pm AEDT China retail sales street 10.6%
1:00 pm AEDT China industrial production street 6.2%
7:00 am GMT Germany consumer prices street 2.2%
10:00 am GMT Germany ZEW current street 78.0
10:00 am GMT Germany ZEW expectations street 13.0
10:00 am GMT Eurozone industrial production street 0.9%
8:30 am EDT US producer prices street 1.9% vs previous 1.6%
8:30 am EDT US core PPI street 1.5%
8:30 am EDT Canada Teranet house prices previous 13.0%
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