Weekly Outlook: 2016, February 07 - 14

Nothing To Fear Ahead Of Yellen And The Lunar New Year - Crédit Agricole

What we’re watching

USD – "Next week’s Congressional testimony by Fed Chair Yellen will be key in driving the USD and risk sentiment further. We do not expect a case of further falling rate expectations to be made here."

SEK – "Although the Riksbank is likely to hold off from further easing next week, a dovish rhetoric should keep easing expectations to the detriment of the SEK intact."

the source

Janet Yellen and Glenn Stevens speeches, US Crude Oil Inventories, Unemployment Claims, Retail Sales and Consumer Sentiment. These are the main market movers for this week.

1. Janet Yellen speaks: Wednesday, 15:00. Federal Reserve Chair Janet Yellen will testify on the Semiannual Monetary Policy Report before the House Financial Services Committee, in Washington DC. Yellen may explain the Fed’s decision to leave rates unchanged on its January meeting and may offer clues about possible timing for the next hike. The weakness overseas in China, Japan and Europe raised concerns about their effects on US economic outlook. Therefore, policy makers decided to wait and let the storm pass before raising rates again.
2. US Crude Oil Inventories: Wednesday, 15:30. U.S. crude oil inventories surged more than expected last week. Inventories edged up 7.8 million barrels to 502.7 million barrels beating analysts’ expectations for an increase of 4.8 million barrels. Economists expect this growth trend to continue.
3. US Unemployment Claims: Thursday, 13:30. The number of jobless claims increased unexpectedly last week by 8,000 to 285,000 as more Americans sought unemployment benefits. However, the reading still suggest that employers are still eager to hire since the number of claims stayed below the 300,000 threshold. The four-week moving average of claims rose 2,000 to 284,750 last week. Economists had forecast claims rising to 280,000. US jobless claims are expected to reach 287,000 this week.
4. Glenn Stevens speaks: Thursday, 22:30. RBA Governor Glenn Stevens testifies before the House Representatives in Sydney. The RBA decided to keep rates on hold at its last cash rate meeting last week. Concerns over the global economy especially in China, one of its main trading partners, caused a further decline in Australia’s terms of trade. However, Australia’s domestic economy has improved in 2015 business conditions advanced above average levels, employment growth picked up and the unemployment rate declined.
5. US Retail Sales: Friday, 13:30. US retail sales declined in December by 0.1%, the weakest reading since 2009, raising concern about the pace of consumer spending in 2016. The release was in line with market forecast. In 2015, sales climbed 2.1%, the smallest advance of the current economic expansion. Weaker sales in electronics stores, clothing merchants and grocers, indicate Americans preferred to increase their savings despite the constant improvement in the labor market. Core sakes, excluding automobiles also contracted by 0.1% while expected to climb 0.2%. Economists expect retail sales will rise 0.1%, while core sales will remain flat.
6. US Prelim UoM Consumer Sentiment: Friday, 15:30. Consumer confidence surged in January to the highest level in seven months, reaching 93.3, following 92.6 in December. The reading suggests low inflation had a favorable impact on households, whose outlook for wage gains remained subdued. Economists expected a reading of 92.7. The current conditions index dropped to 105.1 from the prior month’s 108.1, while the six month outlook edged up to 85.7, the highest since June, from 82.7. Consumer confidence is expected to rise to 92.6 this time.

the source