Press review - page 463

[Sergey Golubev]

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Mario Draghi

Thomas Lawson, 2016.12.09 03:49

Mario Draghi hammered the Euro today. FOMC meeting next week. Eur/Usd bearish because of fundamentals. 

[Achmad Armawijaya]

low volatility, waiting for something, :D

[Sergey Golubev]

5 Things to Watch For in Next Week's Fed Meeting (based on the article)

1. The Fed will hike rates by 25 basis points, only the second increase in 10 years. This will be driven by additional progress toward its dual objectives -- full employment and inflation converging to 2 percent --  along with a desire to validate high market expectations about rates, and to respond to diminished headwinds from abroad (particularly from Europe, despite the results of last week’s Italian referendum).
2. In terms of these dual objectives, the Fed’s policy deliberations will be influenced by the decline of the unemployment rate to 4.6 percent along with the sluggish participation rate, despite continued solid monthly job creation. When it comes to inflation, the inclination to fully embrace the rise in market expectations will be tempered by the recent decline in the growth rate of average hourly earnings.
3. On forward guidance, the Fed will keep open the possibility of multiple hikes in 2017. This is due not only to its anticipation of a solid economic baseline for next year but also the new upside for growth and inflation associated with the recent policy announcements by President-elect Donald Trump. An important consideration here is the degree to which a more active fiscal policy, especially if led by productive infrastructure spending, would allow faster normalization of monetary policy.
4. For the first time in a long while, the FOMC’s “blue dots” -- the expectations of individual members of the Fed board for the future path of rates -- will not migrate down significantly. Instead, they will remain broadly unchanged, while market expectations will continue to converge upward over time.
5. Nonetheless, the Fed’s signals of a somewhat tighter monetary policy will be nuanced, and with good reason. U.S. central bankers will wish to wait for the details of the Trump administration’s economic policies before moving toward significant alterations of a forward guidance that remains heavily “data dependent.”

[Sergey Golubev]

USD Into FOMC: More Gains As Market Reprices More Fed Hikes - Goldman Sachs (based on the article)

• "We expect the FOMC to raise the federal funds rate by 25bp."
• "We expect the USD to continue to move higher and we forecast the TWI USD to appreciate about 7% versus G10 currencies over the next 12 months."
• "We expect further USD strength as the market re-prices more tightening from the Fed."

[Sergey Golubev]

Federal Reserve Hikes Interest Rate, Dot Plot Sees Three More In 2017 (based on the article)

• "The Federal Reserve on Wednesday raised its key interest rate for only the second time in a decade, by a quarter-point to 0.5%-0.75%."
• "Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year."
• "Markets are expected to take today's rate hike in stride, but the outlook on interest rates for 2017 remains somewhat murky. The Fed's 'dot plots' now predict three rate hikes in 2017, one more than previously estimated."

[Sergey Golubev]

Weekly Outlook: 2016, December 18 - December 25 (based on the article)

The dollar soared, in particular against the euro and the yen, as the Fed introduced its hawkish hike. A rate decision from Japan, GDP data from New Zealand, Canada and the US, as well as durable goods orders, stand out in the week leading to Christmas.

1. German Ifo Business Climate: Monday, 9:00. Economists expect both the Brexit vote and Trump’s election will take their toll on the economy at a later stage. German business German business sentiment is expected to climb to 110.7 this month.
2. Japan rate decision: Tuesday. The bank expects to reach its inflation target only at 2018.
3. US Crude Oil Inventories: Wednesday, 15:30.
   
4. New Zealand GDP: Wednesday, 21:45. New Zealand’s growth rate for the third quarter is estimated at 0.8%.
5. US Durable Goods Orders: Thursday, 13:30. Economists expect core orders to climb 0.2% this time.
6. US GDP data: Thursday, 13:30. US third quarter GDP is estimated to reach 3.3%.
7. US Unemployment claims: Thursday, 13:30. New jobless claims are expected to reach 255,000 this week.
8. Canadian GDP data: Friday, 13:30. Canadian GDP is expected to gain 0.1% in September.

[Sergey Golubev]

Weekly EUR/USD Outlook: 2016, December 18 - December 25 (based on the article)

EUR/USD dropped sharply on the Fed’s hawkish hike, reaching levels last seen around 14 years ago. Will it continue toward parity? A key German survey is the highlight in the week leading to Christmas.

1. German Ifo Business Climate: Monday, 9:00.
   
2. German PPI: Tuesday, 7:00.
   
3. Current Account: Tuesday, 9:00.
   
4. Belgian NBB Business Climate: Wednesday, 14:00.
   
5. Consumer Confidence: Wednesday, 15:00.
   
6. ECB Economic Bulletin: Thursday, 9:00. The European Central Bank publishes the data that the Governing Council reviewed ahead of the recent rate decision.
   
7. German GfK Consumer Climate: Friday, 7:00.
8. French Consumer Spending: Friday, 7:45.

[Sergey Golubev]

The Week Ahead: Stock Market Forecasts And What To Do (based on the article)

"This table from the Wall Street Journal reveals their forecasts for 2017 and the high end at 2400 for the S&P 500 would imply just a 6.6% rise from current levels. If you want to learn more about the accuracy of their forecast I would suggest you read this excellent New York Times article by Jeff Sommer.  In reviewing the strategist's forecasts he quotes independent statistician Salil Mehta “It’s not easy to be as bad as they are."

 

S&P 500 price is on bullish market condition for 2270 resistance level to be tested for te bullish trend tobe continuing. By the way, the daily correction will be started if the market crosses 2200 to below on close daily bar, and the daily bearish reversal level is 2100 which is the level for Senkou Span turning level for now.

[Sergey Golubev]

Weekly Fundamental Forecast for Dollar Index (based on the article)

Dollar Index - "Having had the benefit of the weekend to cool off, investors’ thinking may well evolve in this direction. The emergence of this narrative on the eve of the year-end liquidity drain and with many benchmark assets pushed to meaningful extremes may trigger a round of market-wide profit-taking that sinks the greenback."

[Sergey Golubev]

Weekly Fundamental Forecast for USD/JPY (based on the article)

USD/JPY - "The forecast for next week will be set to neutral. While the trend of weakness is attractive, we’re at significant oversold levels ahead of a major Central Bank meeting, and ahead of the holidays, which can be an unforgiving environment if chasing oversold/bought trends."