Weekly Outlook February 15-19, 2016

Last week:

  • The Fed Chair, Janet Yellen, testify to the Congress that recent financial condition in the US and other countries have recently become less supportive and pose risks to economic growth in the US. However, rate hike this year still possible, but in gradual sequences, as long as economic growth and employment data shows some solid figure. Markets tend to react as a “riskier” US dollar and the greenback traded lower after the testimony.

This week: 

*All time are GMT

Sunday: 

  • 11.50 pm Japan Prelim GDP (q/q): despite the quantitative easing policy that being introduced by Bank of Japan (BoJ), the Japanese economy shows some contraction in Q3/2015 by -0.2%, worse than market expectations of -0.1%. In Q4/2015, the analyst predicted that the growth in Japan still contracted by -0.3%. It could become the third straight quarter of contraction.

Monday: 

  • 02.00 pm European Central Bank (ECB) President speaks: dMario Draghi will testify in Brussels and may speak about the global slowdown and its effect to the Eurozone. Expect for market volatility during the testimony.

Tuesday: 

  • 09.30 am UK Consumer Price Index y/y (CPI y/y): inflation rose up by 0.2% in December 2015, the highest figure since January 2015. However, the inflation figure remains low, far below the Bank of England (BoE) target at 2.o%.
  • 10.00 am German ZEW Economic Sentiment (m/m): despite the figure on January beat the market expectation for 10.2, the German analyst and investors confidence on economic condition remains low and weaken since mid-2015. This month, the analyst predicted that the figure will be 0.1, lower than the previous month.

Wednesday: 

  • 09.30 am UK employment data (m/m): the unemployment rate in the UK declined to 5.1%, lowest level since 2005. While the number of people claiming for unemployment by 4.3 thousand in December 2015 and pay for employees in the UK increased by 2.0%. This month, the number of unemployment is expected to decline by 2.9 thousand in January and the wage growth increase by 1.9% or slight decline compare to the previous month.
  • 01.30 pm US Building Permits (m/m): the number of building permits is expected to decline to 1.21 million, from the previous 1.23 million permits. Despite the decline that the market expected, the trend remains upward since 2011.
  • 01.30 am US Producer Price Index (PPI) (m/m): expect to see another contraction by -0.2%, continuing the previous contraction. The decline in energy price drives the slowdown on the producer price.
  • 07.30 pm FOMC Meeting Minutes: the Fed left the rates unchanged and said that the opportunity for the next rate hike still occurs. It would be interesting to watch any signal about the exact time for the rate hikes, because the Fed also notice about the global economic condition that can affect the US economy.

Thursday: 

  • 12.30 am Australia employment data (m/m): unemployment rate in December remain unchanged at 5.8%, or the lowest since May 2014.  In January, the unemployment rate expected to be the same at 5.8%. While the job market is expected to gain 12,9k jobs, better than previous figures (lost 1k jobs).
  • 01.30 pm US Philly Fed Manufacturing Index (m/m): expected to see a better figure from -3.5 to be -2.9. Despite the better figure that market expected, the sentiment on economic condition still worse.
  • 01.30 pm US unemployment claims (w/w): the unemployment data is expected to reach 275k, or slightly worse than the previous week (269k). Despite the weaknesses that market’s predict for this week, the figures on unemployment still show optimism.

Friday: 

  • 01.30 pm US inflation data: the consumer prices (m/m) drop by -0.1% in December, or lowest in the last 3 month. A sharp decline in energy prices leads the slowdown on the consumer price. Despite the slowdown, the year-on-year figure shows better result at 0.7%, or better than previous 0.5% figure. This month, the consumer prices expected to remains low at -0.1% (m/m).
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