Top Daily Economic News(FEBRUARY16, 2019)

No: 225

Date: FEBRUARY 16, 2019

 

Daily World Economic and Financial News

(CNBC): FEBRUARY16, 2019--- The U.S. dollar dropped on Friday after San Francisco Federal Reserve Bank President Mary Daly suggested the central bank may hold off on raising interest rates in 2019, bolstering risk appetite in the currency market. The Fed probably will not need to raise rates this year, given a slowdown in economic growth and muted inflation, Daly told the Wall Street Journal in an interview published on Friday.

(CNBC): FEBRUARY16, 2019--- The euro fell Friday morning after Benoit Coeure, a member of the European Central Bank's executive board, said a new round of cheap multi-year loans to banks was possible. Coeure added that the euro zone's recent economic slowdown is more pronounced than earlier expected, suggesting the path of inflation will also be more shallow. In spite of some recovery on Friday, the currency was nevertheless headed for a second week of losses and was down 1.77 percent year to date. The results of a meeting on Friday between U.S. Treasury Secretary Steve Mnuchin and Chinese President Xi Jinping is also in focus for foreign exchange investors.

(CNBC): FEBRUARY16, 2019--- Analysts say oil prices are approaching breakout levels, and the final day of trading this week will offer clues about whether crude futures can keep rallying. Brent crude on Friday topped $66 a barrel for the first time this year, hitting a roughly three-month closing high at $66.25 and rising 6.7 percent this week. Meanwhile, U.S. West Texas Intermediate crude approached $56 on Friday, settling 2.2 percent higher at $55.59 a barrel, the best closing prices since Nov. 19.

(REUTERS): FEBRUARY16, 2019--- Gold jumped to a two-week high on Friday after weak U.S. economic data boosted expectations the U.S. Federal Reserve would hold pat on monetary tightening, while palladium matched an all-time high on a prolonged deficit. Spot gold was up 0.63 percent at $1,320.81 an ounce at 2:04 p.m. ET, having touched its highest since Feb. 1 at $1,319.81.

(REUTERS): FEBRUARY16, 2019--- Platinum gained 2.16 percent to $802.50. Silver rose 1.02 percent to $15.78, also heading for its second weekly decline, down over 1 percent so far.

(CNBC): FEBRUARY16, 2019--- Analysts say oil prices are approaching breakout levels, and the final day of trading this week will offer clues about whether crude futures can keep rallying. Brent crude on Friday topped $66 a barrel for the first time this year, hitting a roughly three-month closing high at $66.25 and rising 6.7 percent this week. Meanwhile, U.S. West Texas Intermediate crude approached $56 on Friday, settling 2.2 percent higher at $55.59 a barrel, the best closing prices since Nov. 19.

(CNBC): FEBRUARY16, 2019--- Market expectations for U.S.-China trade talks have shifted such that they would now cheer any result that lacked the Trump administration raising or applying more tariffs on March 1, says Hannah Anderson, a global market strategist at J.P. Morgan Asset Management.

(REUTERS): FEBRUARY16, 2019--- The pound edged higher on Friday as strong British retail sales lifted sentiment, though investors were considering the consequences of a Brexit vote defeat in parliament for Prime Minister Theresa May.

(REUTERS): FEBRUARY16, 2019--- Sterling was stuck near one-month lows on Thursday after Prime Minister Theresa May lost a symbolic Brexit vote in parliament, weakening her hand as she seeks to renegotiate her withdrawal agreement with Brussels.

 

EUR/USD ANALYSIS

The EUR/USD pair broke lower and reached a fresh 2019 low of 1.1233 this Friday, down for a second consecutive week. The greenback was the strongest despite hesitating twice throughout the week. It suffered the first knee-jerk Tuesday, amid decreasing demand for safe-haven assets, due to the US Congress reaching an agreement about funding the government, which led to strong gains in equities markets. The upside remained capped for the common currency amid disappointing growth data, as German's GDP remained path in Q4 according to preliminary estimates. The dollar turned back positive with the improved mood, hesitating  Thursday again on market talks of stalemated negotiations between the US and China. It finally resumed advancing Friday, as US-Sino trade headlines were a bit more encouraging, with a Chinese newspaper reporting some ends were met within this week talks, which will continue the next one.

The EUR's inability to run was not only due to poor German growth. EU Industrial Production plunged in December, while for the whole EU, the estimate of Q4 GDP printed a measly 0.3%.  Also, Italian League member, Claudio Borghi, said that the EU elections are the last chance to change Europe, otherwise Italy will have to leave, adding weigh on the common currency. US data was mixed, as the final figures of January inflation were better-than-expected, with the core CPI up 2.2% YoY, but December Retail Sales posting their largest fall in over a decade, down monthly basis by 1.8%.

The common currency was also hit by comments from ECB's Coeure, who said that targeted longer-term refinancing operations are “being discussed,” amid softer inflation and growth. Friday releases were also mixed, with Industrial Production falling 0.6% in January and Capacity Utilization shrinking to 78.2% from 78.8% previously. The most relevant preliminary Michigan Consumer Sentiment Index for February came in at  95.5, beating expectations and well above the previous 91.2.

The upcoming week will bring the ZEW survey about economic sentiment in the EU and Germany, expected to have declined again. The US Federal Reserve will release the Minutes of its latest meeting Wednesday, while preliminary Markit PMI estimates for the Union and the US will be out Thursday. EU and German inflation will also be out next week.

EUR/USD technical outlook

The EUR/USD pair bounced from the mentioned low, heading into the weekend below the 1.1300 figure, bearish according to the weekly chart, as it's the first time the whole weekly candle developed below the 200 SMA since November 2017. In the same chart, the 20 SMA maintains its downward momentum above the current level, while the Momentum lacks directional strength right below its mid-line and the RSI accelerates south around 40. The bearish case is stronger in the daily chart, as the price is below all of its moving averages which maintain strong downward slopes. The closest is the 20 DMA at 1.1365. The Momentum indicator heads lower in negative levels and at its lowest for this year, while the RSI lacks directional strength, consolidating around 40. Supports from the current level came at 1.1250 and 1.1215, the low set in November 2018, with a break below this last anticipating a steeper decline first toward 1.1160 and later toward the 1.1100 figure. The 1.1300 figure is offering an immediate resistance ahead of this week high of 1.1341. Beyond it, the recovery could extend up to 1.1400, where selling interest is expected to return.

International & Financial Terms

  1. Turmoil: a state of great disturbance, confusion, or uncertainty
  2. Treasury Bill:  Short term government securities not more than one year.
  3.  Closed Economy: An economic system that does not trade outside it`s borders.
  4. Downside:  A downward price movement or loss.
  5. ECB:  European Central Bank.

 

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258 السبت 16 فيفرييه 2019 10:34