European Morning Update
Releases from Australia
| |
Forecast |
Actual |
| Australia – February |
|
|
| Employment Change |
15.0K |
+36.7K |
| Participation Rate |
65.2% |
65.2% |
| Unemployment Rate |
4.2% |
4.0% |
There seems to end to the strength of Australia’s employment market which has seen jobs grow again, this time by a healthy 36.7K in February and bringing the total unemployed to a new 33 year low at 4.0%.
Australians are worried about inflation and higher interest rates but with jobs still plentiful these worries are lessened. It still keeps the pressure on wages and this is something on which the RBA will keep a close eye. It also helps them hike rates again to try and reign in inflation.
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Releases from Japan:
| |
Prior |
Current |
| January Industrial Production (F) (MoM) |
- 2.0% |
- 2.2% |
| February Tokyo Condominium Sales (YoY) |
-19.1% |
- 28.0% |
Japan revised lower the January industrial production numbers by 0.2% to finalize the month at -2.2%. As is feared – but expected – shipments dropped by 1.0% over the month and inventories by -1.4%.
And production is not going to be helped by the continuing problems seen in the housing market which saw condominium sales worsen over February by 8.9% to -28.0% YoY. Following the initial decline last year the number has been gradually recovering and this latest setback will be a disappointment.
This fall in development is also hitting industrial production and the labor market which is dampening consumer demand. Having been looking around at apartments it is noticeable how prices are being lowered to be able to offload properties though this has not yet hit the brand new developments just yet. These tend to have a higher premium and also a higher demand.
And finally the Economic Minister Ota has been bemoaning the double blow of higher oil prices and a lower Dollar-Yen which predictably is hitting corporate profits. However, the higher Yen has provided a cushion to the full blows in the market but the underlying problem is more the reduced competitiveness of Japanese prices which is restricting exports.
The following economic releases are due today:
January
U.S. Business Inventories (MoM) +0.4%
February
Italian CPI (MoM) +0.3%
Italian CPI (YoY) +2.9%
U.S. Import Price Index (MoM) +0.8%
U.S. Import Price Index (MoM) NA
U.S. Advanced Retail Sales (MoM) +0.2%
U.S. Retail Sales less autos (MoM) +0.2%
March
U.S. Initial Jobless Claims (8th) 355K
U.S. Continuing Claims (1st)
The ECB is due to publish its monthly report
The SNB is due to announce its rate decision
Germany’s LFW Institute Presents New Economic Growth Forecast
Just as I thought it was safe to call a correction the Dollar baulked at being bought once again and has dipped to new lows. If I look at the wave structure and see the sheer lack of any significant pullback it does seem as if something is amiss. Indeed, as a general guideline when the first correction (wave ii) is shallow then the second (wave iv) is more complex.
On this basis I won’t totally give up the idea that we’re still in a correction especially given the levels we are currently approaching. Within an expanded flat (where part of the correction goes beyond the trend extreme and then returns to the first corrective level) we are uniformly close to these across the four majors. The expansions commonly reach 38.2% of the first leg of the correction with the exception of the Swissie which has a habit of expanding by 23.6%.
These expansion supports are at 1.5575 Euro, 100.00-20 Yen, 1.0079 Swissie and 2.0304 Pound.
These then set the barriers to continued losses which I would have to say would then likely extend losses towards the long terms targets at 1.5797 Euro, 98.55-90 Yen, 0.9960-90 Swissie and a more cautious 2.0460 Pound.
Until those breaks we should take note of the risk of a move back to the Dollar’s corrective highs seen over the past 2 sessions.
Note important support and resistance areas:
|
USDJPY |
EURUSD |
USDCHF |
GBPUSD |
| Res |
101.60-70 |
1.5659-92 |
1.0200-45 |
2.0458-60 |
| Res |
100.66-00 |
1.5585-03 |
1.0130-65 |
2.0340-57 |
| Spt |
99.40-85 |
1.5500-20 |
1.0054-79 |
2.0249-75 |
| Spt |
98.55-90 |
1.5440-60 |
0.9959-93 |
2.0160-90 |
Ian Copsey
Global Forex Trading
http://www.gftforex.com
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