Forex research

Weekly market preview – 27 January 2014

A real key week ahead for the markets, where the release of a raft of economic announcements is likely to bring substantial volatility following a somewhat quiet week gone. The US is likely to take most of the attention with the announcement from the FOMC with regards to whether the tapering will continue apace despite the poor jobs data released earlier in the month. In the UK, a somewhat quieter week means we are looking towards the preliminary GDP reading on Tuesday to follow on from the positive sentiment provided by falling unemployment. Meanwhile in the eurozone, the CPI flash estimate is likely to provide further clarity on the inflation scenario which is driving talk of negative interest rates.

In Asia, the Japanese retail sales is one of very few notable releases to look out for. Finally in New Zealand, the interest rate decision will be key following higher than expected inflation in December.


US

A major week in the US, with the release of the FOMC monetary policy statement being accompanied by the first GDP estimate of Q4 2013. The most important of these is the FOMC announcement on Wednesday with regards to their next decision on monetary policy. The decision from the Fed last month to trim their monthly purchases by $10 billion started a pathway to completely eliminating the trend of operating as a buyer in the bond market as a means of boosting stability and encouraging growth. Given that this has been previously dictated largely by the movements within the jobs market, many had seen a January taper as out of the question following the lowest rate of job creation in a year and a half. However, with most of that impact being driven by extraordinary weather conditions that affected almost every state in the US, it is likely that the FOMC will view it as an outlier and not indicative of anything more significant.

The impact to the markets following last month’s taper was surprisingly muted, with many saying it had been factored into prices already. However, with the likes of the S&P500 only 30 points off all-time highs at the time of the decision, I do not believe this to have been the case per se. It is more likely that this shows a success in the ability of the Fed to properly manage expectations in the markets. This likely had alot to do with the decision to not taper in September when many had expected them to. What will be interesting is how markets respond to the next taper as it will likely give an indication of just how aggressively the Fed will be pulling back on stimulus going forward.

Personally, I do expect to see another taper on Wednesday, owing to the raft of positive figures apart from that non-farm payroll release. The unemployment rate fell to 6.7% for the first time since December 2008, with the ADP non-farm payroll figure showing the highest number since this time last year. That being said, there are mixed views in the markets as to whether Yellen will play it safe and encourage members not to taper as a means to prove she is will be highly accomodative in her role as chairperson. This difficulty in gauging whether the taper will be resumed means that this release is going to be the major event of note which markets are looking towards as a key driver of volatility going forward.

On Thursday, the US GDP figure will be released, following the recent announcement that the IMF has upgraded their 2014 US growth target to 2.7%. This month we are expecting to see a somewhat more muted figure of 3.3% following an rise of 4.1% on an annualized basis as measured from the Q3 figure. The annualized reading can sometimes confuse given that it provides a gauge of how the economy would grow if projected from that given quarter, taking into account seasonal factors and inflation. Nevertheless, the Q3 figure represented the strongest rate since Q4 2011.

The GDP figure is always absolutely critical for investors from a macro point of view as it measures the growth of the value of all the goods and services produced by the economy. Many see this as the strongest all-encompassing measure of how an economy is faring since it takes into account all sectors across the board. Bear in mind that this week’s release is the first estimate and thus provides the markets with the earliest indication of by how much the statisticians expect the US economy to have grown within Q4 2013. For this reason, the US GDP figure will be key as a potential market moving event in the week.

UK

A similar story in the UK, where the main event of note is going to be the preliminary GDP figure for Q4 2013. Given that this is the first release which indicates by how much the economy is expected to have grown, there is likely to be significant volatility surrounding this figure. Unlike the US figure, this number is not annualized and thus makes it harder to compare the two. The closest of the two figures being released which is comparable is the year on year figure, which is expected to rise moderately to 2.0%. Bear in mind that the IMF has recently cited the UK as the leading light in Europe, with expectations of 2.4% growth in 2014. Thus we are looking for a strong figure on Tuesday to follow on from the outstanding reductions in unemployment seen in the recent 6 months. Should this come true and the figures impress, this would provide yet another coup for the UK economy and could provide even further emphasis for the likes of the GBP and FTSE100 after recent rallies.

Eurozone

A mixed week ahead for the eurozone, where the German business confidence, along with eurozone CPI and unemployment rates will be in focus. The first of these to be released is the German IFO business climate survey, which acts as a leading measure of both eurozone and German economic health as perceived by manufacturers, builders, wholesalers and retailers. The figure has a high degree of correlation with the manufacturing PMI, however it is the correlation with the German GDP figure which is more interesting. Often a significant shift higher or lower on this figure has preceded a substantial move in the GDP QoQ figure. This was highlighted most notably when the October 2012 business climate figure marked the start of the recovery for the region, which was confirmed by the GDP release seen in February 2013. Thus on that occasion, this provided a leading indicator of the recovery, months ahead of the headline figures. For this reason, it is key to watch this release, which is expected to rise marginally to 110.0 from 109.5.

Later in the week, the eurozone CPI figure is released, which many will be keeping a look out for. The inflation environment in the eurozone has come back into the limelight over the second half of 2013, where Mario Draghi opted to reduce the headline interest rate by 25 basis points in response to the fall to 0.7% in inflation. The threat of deflation appears to be back on the scene following a brief boost, falling back to 0.8% earlier this month. This week’s measure is expected to show a push back to 0.9% for January on a year on year basis. However, should we see the figure fall short yet again, this could become a serious problem for Draghi who could begin to seriously consider negative interest rates or alike to avoid deflationary fears. Remember that price stability is the number one target for central banks and thus any notable shift lower will have to be addressed as a matter of urgency.

Finally, keep an eye out for the eurozone unemployment rate, due to be released on Friday. This has been somewhat of a sticking point within the eurozone, where the peripheral economies have found it extremely hard to generate sufficient employment. This obviously provides a drag upon their ability to grow given the loss of tax revenue and subsequent increase in welfare payments. The unemployment rate has remained around 12.1% for almost a year now and despite falling back from 12.2% in September, there has been little to suggest the single currency region is on any substantial path towards reducing this key measure. Expectations are that we will see yet another figure of 12.1% posted. However, should we see a fall back to 12.0% it would be highly notable and could point to the beginning of much needed improvements to the chronic unemployment seen throughout this crisis.

Asian & Oceania

A quiet week in Asia, where the main event of note come out of Japan in the form of the retail sales figure due on Wednesday. The Japanese economy has seen a somewhat mixed 2013, where the promises from Shinzo Abe seems to be coming true following a move out of deflation, which also saw the yen devalue significantly and Nikkei225 reach record highs. However, with the highest debt to GDP ratio of all the major developed economies, standing above 220%, the need for a VAT hike is evident. However, coming at a time when the recovery and growth is somewhat fragile means that figures such as the retail sales number are absolutely crucial to understand the health of economic activity. Should we see a weakening of this figure, it would be difficult to see how the VAT rise in April will not have a negative impact on sales in the country. Market forecasts point towards a moderate fall from 4.1% to 3.9%, yet any larger tumble could be notable and draw attention.

Finally, in New Zealand, the monetary policy decision from the RBNZ is due on Wednesday. This has become increasingly pertinent given that we saw a greater than expected inflation figure last week, bringing into account the possibility of an interest rate rise in the near future. Bearing in mind that most major economies are providing guidance of how long their rates will remain low, it would be highly notable should the RBNZ raise rates so soon. I do not expect to see a rise today, yet this announcement will become more and more crucial as 2014 goes on.
 
UK Opening Call from Alpari UK on 27 January 2014

Traders risk averse following Friday’s sharp sell-off

Today’s UK opening call provides an update on:

* Traders risk averse following Friday’s sharp sell-off;
* Emerging market risk may encourage the Fed to delay the next taper, expected on Wednesday;
* Asian sell-off not helped by largest ever Japanese trade deficit;
* Economic data and earnings in focus today

Traders are heading into a very important week for the financial markets feeling extremely risk averse, as Friday’s sell-off in the US spills over into the Asian session over night and European futures this morning.

Attitudes appear to have changed dramatically in a very short period of time. Only a couple of months ago it seemed nothing was going to deter investors from buying the dips in the market to profit from the better entry points, regardless of what the Fed was doing and what the data told them. At one point we’d entered a new phase in the recovery where bad news was good news and good news was also good news. It was a win win from an investor standpoint.

How things have changed. Since the start of the year, the rose tinted glasses have come off and investors are seeing things a lot more clearly. Earnings season may have a lot to do with this as investors were looking to it for confirmation that the economic recovery is sustainable and is gathering pace, and the previous reliance on the Fed’s ultra-loose monetary policy was no longer there.

Instead all it has highlighted is that little has changed on this front. Companies are continuing to cut costs to drive earnings growth, which previously was enough to keep investors happy. However, that was when the Fed was flooding the markets with cash which meant that investors were looking for any opportunity to buy the dip. With the Fed now reducing its purchases and planning to wrap it up entirely later this year, that is no longer the case.

This brings us to another threat which created a lot of panic in the markets last week, initially triggered by the weak Chinese manufacturing PMI on Thursday. The sell-off in emerging market currencies created a fair amount of panic last week and is only likely to spur further panic going forward about the impact on Fed tapering on the emerging markets.

We always knew this was a threat as investors poured money into these markets in search of yield. The moment the Fed decided to start reducing its purchases, one of its most difficult tasks was going to be reducing the impact on these markets as much as possible. With that clearly not going to plan, the Fed could decide to hold off on further tapering on Wednesday in order to allow the markets to calm down a little and stop the recent panic turning into full blown chaos.

The sell-off in Asia over night wasn’t helped by the Japanese data, released on Sunday night, that showed Japan’s trade deficit grew to its highest ever level as a proportion of GDP. While the surprise jump is thought to be largely due to one-off factors, these higher deficits are expected to continue going forward.

This has all left investors feeling very risk averse right now and that is likely to continue as we head into a very important week. Not only do we have the Fed decision on Wednesday, we also have some key economic data being released, while corporate earnings season will get into full flow with a large number of S&P 500 and Dow components scheduled to report on the fourth quarter.

It’s going to be a relatively quiet start to the week in terms of economic data, with the only notable release this morning being the German Ifo business climate figure. This is expected to rise to 110 from 109.5 in January. This will be followed by the release of the US services PMI and new home sales later.

Ahead of the open we expect to see the FTSE down 61 point, the CAC down 22 points and the DAX down 64 points.
 
US Opening Call from Alpari UK on 27 January 2014

Friday’s sell-off carries over to Asia and Europe

Today’s US opening call provides an update on:

* Friday’s sell-off carries over to Asia and Europe this morning;
* Traders unwillingness to buy the dips could prompt 10% pull back;
* US economic data and earnings in focus on Monday

The negativity that weighed heavily on markets towards the end of last week is still apparent on Monday, as European markets trade in the red across the board following a similarly negative session in Asia over night.

Over the last year or so, traders have found a way to find the positives in any news that justified them buying any dips in the market. When it comes to earnings season this has been earnings growth, despite the fact that this has been driven by cost-cutting rather than stronger sales, which would point to longer term growth potential.

The most obvious example has been markets rallying in response to poor economic data, with the justification here being that it meant the Fed would continue to inject $85 billion every month into the financial markets. The problem now is that the Fed has started tapering and intends to end the asset purchase program later this year, leaving investors unwilling to celebrate poor data and accept short term boosts to earnings.

Add to this the recent concern over the capital outflows in the emerging markets, highlighted last week by the huge sell-off in the currencies, and traders no longer appear willing to buy into those dips. We’ve already seen more than a 3% sell-off in the S&P and more than 4% in the Dow, and the sell-off could continue in the coming weeks/months until we’ve seen around a 10% sell-off making equities attractive again to bargain hunters.

US futures suggest we’re going to see a temporary halt in the sell-off this morning but it’s interesting that they’re only marginally higher which really highlights the lack of appetite for risk despite the huge sell-off. This could change as the day goes on with plenty of earnings and economic releases scheduled that could provide a temporary boost for investors.

Ahead of the open we expect to see the S&P up 5 point, Dow up 19 points and the NASDAQ up 5 points.
 
Daily Market Update - 27 January 2014 - Alpari UK


Chief Market Analyst James Hughes looks at the major stories moving financial markets today, including the huge falls seen on US markets on Friday, the fallout over the Argentina crisis and the issues facing emerging markets as a result of the US taper. James also looks at the major economic data for this week.
 
US Opening Call from Alpari UK on 28 January 2014

Indices recover following sharp sell-off in recent days

Today’s US opening call provides an update on:

* Apple earnings weigh heavily on Nasdaq futures;
* Apple expected to open more than 7% lower despite highest ever iPhone sales;
* Minor gains this morning may reflect a small pullback in the sell-off, rather than a change in sentiment;
* Focus turns to economic data and earnings on Tuesday

The S&P and Dow are expected to track Europe higher on Tuesday, while the Nasdaq is currently seen opening lower with Apple losses seriously weighing on the index.

Investors were far from impressed with Apple’s earnings after the close on Monday, despite the tech giant announcing higher than expected earnings. The disappointment came from the number of iPhone sales in the fourth quarter, which despite rising to 51 million, the highest ever, fell well short of expectations of 55 million.

On top of this, guidance for the current quarter was disappointing, which didn’t help matters. However, with all this in mind, the more than 7% sell-off in after hours trading seems to be quite an overreaction. This isn’t uncommon during earnings season, but what it means is we’ll have to wait a couple more days to see what investors really think of the numbers.

This is likely to weigh slightly on the S&P as well, although the weighting on this index is far smaller than on the Nasdaq, so the impact is significantly less. The S&P and Dow are both seen opening higher this morning, reflecting the improvement in investor sentiment on Tuesday, which has also been seen in European markets.

That said, the size of the rally in equity markets today may suggest this is just the markets taking a breather from the recent sell-off. Unless the rally picks up more in the next 24 hours or so, I wouldn’t be surprised to see more selling later on in the week.

There’s some economic data being released during the US session today, which could help improve investor sentiment further. First up we have core durable goods orders before the opening bell on Wall Street, which are expected to rise 0.5% in December, following an even bigger increase the month before.

Following this we have the January consumer confidence figure which is expected to remain unchanged from a month earlier at 78.1. It is important for the economic recovery in the US that consumer confidence remains at these higher levels so this figure could get a reaction in the markets today. Especially if we see something significantly above or below expectations.

Another focus today will be corporate earnings, with many large companies due to report, including Pfizer, AT&T and Yahoo. A relatively disappointing earnings season so far has been one of the main reasons why we haven’t seen a continuation of the rally in equity markets in January. If we continue to see the same today, it could weigh further on equity markets as we head into the second half of the week.

Ahead of the open we expect to see the S&P up 7 point, Dow up 86 points and the NASDAQ down 11 points.
 
Daily Market Update - 28 January 2014 - Alpari UK


Markets stabilise following sell-off - 00:09
Turkish central bank will hold extraordinary meeting today - 00:29
2013 UK GDP grows at strongest level since 2007 - 01:28
Tomorrow FOMC statement and RBNZ statement - 02:49

Research analyst Joshua Mahony discusses the market rise following a strong sell-off spurred on by Emerging Markets fears. Along the same loines, Joshua discusses the Turkish lira selloff and how their central bank could stem EM fears later today. In UK affairs, he notes the strength of the UK GDP figure in what has been a very bullish period for the UK economy. Finally, Joshua previews tomorrows FOMC and RBNZ meetings.
 
UK Opening Call from Alpari UK on 29 January 2014

Turkish rate hike eases EM concerns ahead of Fed decision

Today’s UK opening call provides an update on:

• Markets boosted by aggressive rate hike from the Turkish central bank;
• Fed expected to taper again this evening despite concerns in emerging markets;
• Quiet European session expected ahead of Fed decision.

The Turkish central bank’s bold decision to raise interest rates to 12% yesterday evening appears to have given the markets a significant boost over night.

Asian indices ended higher across the board over night, while European indices are expected to open almost an entire percentage point higher on Wednesday. We’ve seen a huge amount of concern in the markets since the end of last week in response to the across the board selling in emerging market currencies.

This was always going to be a risk when the Federal Reserve started reducing its asset purchase program, with the markets no longer being flooded with liquidity and investors being offered higher rates closer to home. However, the action taken by the Turkish central bank should significantly reduce the capital outflows and even draw some money back into the country. If other countries follow suit, this should re-stabilise the markets at a time when further Fed tapering is widely expected.

The interest rate hike could not have come at a much better time for the markets, with the Fed expected to announce its next round of tapering this evening. Questions had been raised over whether the Fed would risk another taper at a time of such volatility in the emerging markets, with some suggesting they should hold off until the next meeting in March and allow the markets to calm a little.

That said, volatile financial markets have not stopped the Fed in the past, so there’s no reason to suggest they would now. The timing of the rate hike from the Turkish central bank suggests this is the case. I would say at the very least, the Fed will announce a $5 billion taper that will both calm the markets and show that it is committed to ending the quantitative easing program this year.

With the Fed’s announcement expected later on this evening and the economic and earnings calendars offering little in terms of catalysts, it could be a relatively quiet morning in the markets. This should allow the events of the last week to completely sink in and create a little more stability in the markets, before the Fed potentially shakes things up again.

Ahead of the open we expect to see the FTSE up 40 point, the CAC up 38 points and the DAX up 92 points.
 
Daily Market Update - 29 January 2014 - Alpari UK


Markets mixed following Emerging Markets comedown - 0:09
Turkey raises overnight rate yet questions remain - 00:30
FOMC taper uncertain as markets seek direction - 02:14
RBNZ meeting could bring notable rise in interest rates - 04:11

Research analyst Joshua Mahony discusses the overnight decision from the Turkish Central bank to raise rates and what this means for the wider emerging markets going forward. He also discusses the FOMC decision whether to taper asset purchases later today, along with the possibility of the RBNZ to raise their interest rates for the first time since 2010.
 
UK Opening Call from Alpari UK on 30 January 2014

Fed taper and Chinese data weigh on European futures

Today’s UK opening call provides an update on:

• Turkish rate hike boost doesn’t last long as investor pessimism takes over once again;
• Fed reduces its asset purchases by another $10 billion as expected;
• Downward revision to Chinese HSBC manufacturing further weighs on markets;
• Economic data may distract from emerging market turmoil on Thursday.

The downbeat tone in the markets is once again expected to carry into the European session on Thursday, with indices seen opening slightly lower across the board.

You would never guess that only a month ago we were celebrating the fact that many indices in the US and Europe were about to end the year at, or near, record highs. Not even the Fed’s first taper in December stopped bargain hunters from buying the dips and riding the rally into year end. What a difference a month can make.

The bizarre thing is that very little has actually changed, the Fed is still tapering, companies are still relying on cost-cutting for earnings growth, Chinese growth is still slowing and we’re seeing some capital flight in emerging economies which was both expected and occurred in the middle of last year. The biggest change has been people’s perception of these events, which I guess is all that counts.

Yesterday’s relief rally following the huge rate hike in Turkey was extremely short-lived, which clearly highlights just how pessimistic investors are right now. On top of that we saw selling in the US following the Fed’s decision to reduce asset purchases by another $10 billion even though this is exactly what people were expecting.

In other words, there’s very little difference in data, earnings and expectations this month. However, rather than buying the dips, traders are instead jumping at any opportunity to short the market. Now, the chances are this is just that long awaited correction that has been talked about for so long and the uptrend will continue soon enough. The only question is, how big a correction are we going to see? Already we’re closing in on 5% and I still think there’s probably another 5% to come.

In terms of what’s going to move markets today, already we’re seeing the Fed’s decision to taper last night and the disappointing Chinese data weighing on European futures. The HSBC manufacturing PMI for January was revised slightly lower to 49.5, further adding to the negativity in the markets. It was this preliminary reading last week that set off the concerns about the emerging economies. I can’t imagine this revision will help matters.

There’s plenty of European data being released this morning which could act as a distraction to what’s going on in the emerging markets and the US. First up we have the flash fourth quarter GDP reading for Spain, which is expected to show the country growing by 0.3%. This isn’t much but it is a huge positive for a country that prior to the third quarter was stuck in an almost two year recession and even now boasts near record high unemployment above 26%.

To further highlight how depressing the unemployment situation is in Spain, compare it to Germany, the strongest economy in the eurozone, where unemployment currently stands at 6.9%. This is expected to remain unchanged in January, with the number of unemployed actually falling by 5,000.

Finally we have a number of confidence surveys being released for the eurozone, most of which are expected to post further improvements in January. This is a positive for the euro area, but we have to be a little concerned that the majority of these improvements are being driven by the stronger economies, such as Germany, which is somewhat papering over the cracks of the region as a whole. While we shouldn’t grumble as Germany’s success, we also shouldn’t be distracted by numbers that don’t necessarily reflect the sentiment in many of the countries in the euro area.

Later on it’s over to the US where we have a number of other pieces of data being released, including the first estimate of the fourth quarter GDP figure. Also being released is the weekly jobless claims data, pending home sales and personal consumption expenditure prices, a measure of inflation that the Fed is believed to follow quite closely.

Ahead of the open we expect to see the FTSE down 11 point, the CAC down 5 points and the DAX down 15 points.
 
US Opening Call from Alpari UK on 30 January 2014

Is US taper justified as markets look towards GDP figure

Today’s US opening call provides an update on:

* US tapering shows that the Fed is serious about ending QE;
* HSBC Chinese manufacturing PMI revised further into contraction;
* German employment outlook improves following positive data;
* US GDP expected to post strong figure despite slowdown;

European stock markets have started the day in a positive manner, following a decision from the US to continue apace with the tapering of asset purchases in yesterday’s FOMC meeting conclusion. The decision to reduce bond buying to $65 billion in February is notable for a number of reasons. Firstly, as a parting gift to Ben Bernanke, this is the first unanimous monetary policy vote since June 2011, with all 10 voting members believing that a further reduction is appropriate. The decision to reduce what has been seen by many as a form of steroids was expected to have a significantly bearish effect, yet given the willingness of the markets to shrug off both tapers so far are a testament to the strength that remains within this current bull market.

Now that we have seen the first two tapers, I believe we are now likely to see less risk for future decisions as it is less of an unknown going forward. The Fed are clearly serious about reducing the rate of purchases at a steady and constant rate, where a poor payrolls figure failed to stand in the way. It has been evident that there are a number of positives coming out of the US, with the ADP and unemployment rate in particular portraying a healthy jobs market despite the effect of the adverse weather conditions upon the headline payrolls figure. Thus the fact that the FOMC is able to look beyond such a shock figure is an indication that we are likely to need something more substantial to refrain from more future cuts to the asset purchase facility. Next month will see a Yellen chaired Fed and despite Bernanke saying there will be consistency across both Fed’s, we will be watching for any shifts in emphasis given that she is perceived to be more of a dove than the outgoing Bernanke.

China received a rather unwelcome Chinese new year’s present this morning, when the HSBC manufacturing PMI figure was revised further lower for January. The fall into contractionary territory last week was one of the key factors which brought about heightened pressure upon the emerging market economies. Thus the further reduction from 49.6 to 49.5 is somewhat of a kick in the teeth and shows that this be could be the beginning of a more drawn out slowdown in the Asian powerhouse. This will of course need to be proven as currently there is the possibility of this representing a one off month. It is also worth noting that this survey is focused upon smaller and medium sized businesses, rather than the larger state influenced firms being measured in the official figure. Thus while a poor HSBC manufacturing PMI may show a weakening of some smaller companies, this is somewhat expected as the Chinese economy shifts towards reducing the excess capacity that has been a dominant feature throughout 2013 by reducing some of the incentives previously in place.

German employment received a significant boost in January, with the unemployment rate falling to 6.8%, with December’s figure also being revised lower to 6.8%. This was driven by the significant fall in the unemployment change figure, which saw the largest monthly fall in jobless since March 2011. The Eurozone unemployment conditions are one of the most worrying factors which have persisted throughout this crises despite improvements across the likes of the banking sectors and debt market. Thus for many, the ability to bring employment back into check remains the most difficult and final hurdle to pass in the pathway back towards normality. Of course, of all Eurozone nations, it is the German economy which has typically fared best and led the way for some of the weaker economies in the single currency region. However, given the high degree of labour mobility within the Eurozone, improvements in the German employment market will prove beneficial all-round. One thing to note is that whilst the unemployment rate did fall back to 6.8%, this figure has provided a constant stumbling block which the German economy has failed to surpass on 14 occasions within the past two years. Thus I believe the shift to 6.7% would be much more notable as an indicator of whether the German economy is on positive path lower of if we are going to continue to see the unemployment rate stall at 6.8%.

Looking ahead, the US GDP figure is due to be released this afternoon, with market expectations pointing towards a fall back to 1.3% for Q4 2013, following a hugely impressive 2.0% achieved back in Q3. Given the strength of that Q3 figure, the markets are not expecting to see such a strong figure for every quarter and thus a reduction was always expected. The effect of the nationwide arctic freeze seen in December is sure to have had a notable impact upon the Q4 figure and thus a fall is not likely to be treated with too much trepidation at a time when the markets are looking positively upon the US economy.

US markets are expected to open higher, with the S&P500 +7 and DJIA +47 points.
 
Daily Market Update - 30 January 2014 - Alpari UK


Federal Reserve tapers despite flare up in emerging markets - 00:17
Chinese manufacturing contracts faster than previously thought - 02:59
Mixed data in Europe this morning - 04:25
Focus on US unemployment, inflation and housing - 06:05

We're seeing more risk aversion in European markets this morning, following the Fed's decision last night to reduce its asset purchase program by another $10 billion. Market Analyst Craig Erlam talks about the Fed's decision to taper, what else is weighing on investor sentiment and what we should look out for in the markets on Thursday.
 
US Opening Call from Alpari UK on 31 January 2014

ECB under pressure to respond as inflation falls to 0.7%

Today’s US opening call provides an update on:

* ECB under pressure to respond as inflation falls back to 0.7%;
* ECB may be forced to consider unconventional tools, including QE as a last resort;
* Eurozone unemployment falls to 12% after stabilising in 2013;
* Focus on the US consumer for the rest of the day

The risk of deflation in the eurozone has become a hot topic again this morning after the eurozone CPI was seen falling back to 0.7%.

This is the level that prompted the ECB to cut interest rates to record lows of 0.25% back in November, and therefore speculation will be rife about how they will respond at the meeting next week. The problem the ECB now faces is that any interest rate cut to, say, 0.1%, will probably have minimal impact, which means they will be forced to consider more unconventional measures.

The options that have been discussed at previous meetings include negative deposit rates, with the rate currently standing at 0%, and forward guidance, which the ECB attempted last year and proved to be very unsuccessful due to the lack of any form of threshold. The central bank policy makers appear very reluctant to fully adopt either of these options which should make next week’s decision all the more interesting.

Other options that the ECB may consider include another round of long term refinancing operations (LTRO’s), although many have raised doubts about whether this would address the real issue. Quantitative easing is one that has been successful in other countries, but I feel this would be more of a last resort than a likely option at an upcoming meeting.

On the bright side, eurozone unemployment was lower at 12%, with the November reading also revised down to this level. Unemployment stabilised over the last year following its relentless rise to record levels prior to this. The fact that we’re finally seeing this number come down, albeit slowly, is a sign that the eurozone is turning a corner. Although I’m sure there’s still plenty of countries that aren’t seeing this yet.

The focus for the rest of the day will remain on economic data, with fewer companies reporting fourth quarter earnings on Friday. We have a number of releases which will be of interest to traders today, with particular focus on the consumer.

The UoM consumer confidence figure is expected to be revised higher to 81 from 80.4, which will be music to the ears of those hoping for a strong recovery in the US this year. It will also ease concerns about consumer spending levels in January, which has been another poor month on the weather front, a potential deterrent for shoppers.

Even if this has had an impact on consumer spending, a good consumer sentiment figure would suggest that these are one-off figures and things should improve in the coming months. Shortly before this, we’ll have the release of the December personal spending figure, which is expected to fall to 0.3%. Anything above this would further ease concerns about falling consumer spending.

Also being released today is the core personal consumption expenditure index, the Fed’s preferred measure of inflation. This is unlikely to have much impact on the markets though as it is expected to remain at low levels of 1.1%. Finally we have the January Chicago PMI, which is seen remaining relatively unchanged at 59.

Ahead of the open we expect to see the S&P down 17 points, Dow down 146 points and the NASDAQ down 32 points.
 
Weekly market preview – 3 February 2014

The first week of the month means one thing, and that is a whole plethora of top tier economic releases and announcements to sink our teeth into. The US focus will be largely centered upon the jobs report due to be released on Friday. Meanwhile in the UK, the release of the three industry specific PMI figures will no doubt dominate proceedings in the early part of the week. Over in the eurozone region, Thursday’s ECB press conference takes on a heightened importance following the continued downward pressure seen in the inflation rate.

In Asia, the celebration of Chinese New Year and the spring festival mean that we are likely to see less activity from the region. Despite this, Saturday’s manufacturing PMI figure will be keenly followed given the impact the fall in the HSBC figure had upon the emerging markets. Finally, a busy week for Australia sees the RBA come back to the fore with the accompanying statement from Glenn Stevens likely to dominate proceedings.


US

A highly significant week ahead for the US economy, with the release of the ADP non-farm payroll figure leading the way to Friday’s jobs report climax. The impact the jobs data has had upon ongoing tapering has been absolutely crucial and thus the release of this weeks employment figures will give us a better idea of whether Yellen is likely to taper at her first meeting.

The ADP non-farm payroll is commonly seen as a poor man’s version of the headline figure owing to the lessened impact and questionable correlation. That being said, the importance of the ADP figure came into question over the last month. The release of the lowest non-farm payroll since mid 2012 was widely attributed to adverse weather seen across the US and drove the Fed to seek guidance from alternate employment measures including the ADP figure. The fact that the ADP non-farm payroll (highest since December 2011) and unemployment rate (lowest since November 2008) both came in very positively allowed the FOMC to conclude that significant strength remained in the US jobs market despite the fall in the non-farm payroll figure.

This month, expectations are somewhat lower, with a figure closer towards 191k being mooted following an impressive 238k last month. In my mind, anything around the 200k mark would be respectable and given that the last two releases have beaten estimates, I believe the jobs market is picking up strongly which could lead to third consecutive beat in this measure.

On Friday, the release of the fabled jobs report is likely to bring the most volatile period of the whole week, when the unemployment rate and non-farm payroll figures are released. As mentioned previously, the non-farm payroll figure came in substantially lower than expected last month, posting the lowest change in payrolls since mid 2012 at 74k. However, with no adverse conditions effecting this month’s figure, the expectation is for this measure to return to ‘business as usual’. Estimates point towards a figure closer to 185k, which would be somewhat short of the 200k+ seen prior to the big freeze. However, this would still point to a healthy range for the measure and would make a potential March taper highly plausible.

Much of that decision with respect to a March taper is also driven by the unemployment rate, which is also released on Friday. The unemployment rate has been utilised as a target under forward guidance for both the UK and US, showing the importance of this figure. Given the proximity of the current 6.7% rate of unemployment to the 6.5% threshold, any further fall would be highly significant to the markets. That being said, the outgoing Fed chair Bernanke has said that interest rates will remain at low levels for an extended period after the 6.5% threshold is reached.

As ever, it is worth watching out for some of the other statistics that are released alongside these two key figures, with the average weekly hours, average hourly earnings and participation rate all key in Fed understanding of whether there has been positive progression for workers in the US. As mentioned, the March FOMC meeting is going to be key going forward, given that there isn’t one scheduled for February. Thus this week’s jobs data will be one half of the new data being utilised by the FOMC for their next decision. For that reason, there is a possibility we could see less emphasis upon FOMC decision-making in this release and more upon the US economic health and potential impact to forward guidance.

UK

A major week in the UK economy, where the first half of the week will be dominated by the release of industry specific PMI figures, followed by the latest monetary policy statement from the Bank of England’s Monetary Policy Committee (MPC).

On Monday, the manufacturing PMI figure provides the latest outlook for an industry which behind services is the second highest contributor to the UK’s GDP figure. Much was made of the over-reliance of the UK economy on services following the 2007/08 crash and thus the ability to become stronger in areas such as manufacturing allow for greater stability going forward. As a proponent of 2013 Q4 GDP growth, the manufacturing sector contributed 0.10% of the 0.70% overall growth and for that reason, this survey is key to understanding how the sector will contribute going forward. Market estimates point towards a figure around 57.0 from 57.3 last time which would represent the second consecutive fall in the measure.

On Tuesday, the construction PMI figure is released, following the news that it was the only sector which shrank in Q4 within the GDP reading. This comes despite the booming housing market and perhaps points to weaknesses in policy with respect to building new construction projects. That being said, the construction PMI has been the best performing over recent months and thus one should not be too dismissive. It will be key to note whether we can see a positive push into higher expansion this month, despite a predicted fall to 61.6 following last month’s figure of 62.1. However, given the relatively minor impact that this sector has upon growth in the UK, this figure will be third in line in terms of emphasis for me.

Wednesday brings the most important of the three, with the services PMI providing a leading indication of what direction the UK’s most important sector is moving in January. As mentioned, the services sector is absolutely key to whether the UK economy is growing or not and thus the ability to see ahead of time in what direction the sector appears to be progressing is invaluable. Market forecasters point towards a potential rise back to 59.1 from 58.8 last month. Ultimately, any rise in this figure would be positive for the economy as it would point towards a move back in the right direction for not only the sector, but most importantly the wider economy.

Finally, on Thursday the monetary policy committee at the BoE will announce their latest interest rate and asset purchase policy decisions. As with previous months, there is little likeliness of any change in either the interest rate or asset purchase facility given that Mark Carney’s forward guidance policy seeks to provide a stable environment. Add to this the fact that the economy has been performing particularly well in recent months and there is no appetite for further changes.

Thus as with previous months it is worth looking out for any change in the statement, most notably in relation to the forward guidance policy which is coming under increased pressure now that we approach the key 7.0% threshold much earlier than expected. Recent statements from Carney at the World Economic Forum cited a willingness to update the forward guidance policy to encompass different tools. Whilst this is unlikely to have been finalised quite yet, I am looking for further clues as to how this might take shape.

Eurozone

A similar week ahead for the eurozone, where the release of various PMI figures, along with the latest ECB meetings will dominate proceedings. The PMI releases are split across two days, with the manufacturing figures due on Monday, whilst Wednesday will be focused upon the services sectors. As mentioned previously, the key numbers to be watching out for are the German and eurozone figures primarily. However, it is also worth noting that those weaker areas such as French manufacturing are going to be key as we need to see a move closer towards expansion to bring a sense of calm. Currently, with a figure of 47.0 in play, economists and analysts can plainly see an uncomfortably deteriorating sector in the second largest eurozone economy. Also watch out for the eurozone composite PMI, which takes into account all areas of the single currency and gives a more all encompassing figure.

The biggest event of the week arrives on Thursday, when the ECB announce their latest decision with regards to monetary policy. This would not be as much of a major event had it not been for the latest inflation figure out of the eurozone, which saw CPI fall back to 0.7%. The last time we saw an inflation rate of 0.7%, Mario Draghi decided to pull back interest rates, cutting the minimum bid rate by 25 basis points. However, given that the impact of that rate cut upon CPI was almost non-existent, there are significant doubts as to whether Draghi will employ the same type of tactic. Thus whilst I do not expect a rate cut, this meeting will be significantly more interesting for the fact that Draghi has to address this threat of deflation in some way. Thus look out for both the headline rate and failing that, an indication of what alternate could be utilised.

Asia & Oceania

A somewhat quiet week in Asia, in part due to the fact that China will be celebrating the spring festival following the Chinese new year. That being said, there is the release of the manufacturing PMI to address, which is due out over the weekend. Much has been made of the Chinese data recently for a number of reasons, not least the emerging markets sell-off seen over the last week. This was initiated from a disappointing HSBC manufacturing PMI figure, which saw the sector shift back into contraction. The emerging markets were the ones to suffer the most from the market jitters seen in response to this figure, however it has been felt around the work in the form of heightened risk aversion.

The official manufacturing PMI figure typically performs better than the HSBC reading for a number of reasons. Firstly, the official figure is geared towards the larger, state backed firms, which will of course fare better during the weaker times of growth for the economy in comparison to smaller firms. Also, the HSBC figure is an independent measure and thus there is little political will to alter how the industry is portrayed to the world. Following the admission that trade figures have been manipulated by bogus invoicing, it is understandable that analysts treat official data out of China with a degree of skepticism. Thus there is a greater degree of trust associated with the HSBC nowadays as a true measure.

That being said, the official manufacturing PMI figure remains the main measure of the manufacturing sector for the worlds second largest economy. Following the HSBC figure falling into contraction, this release is going to be absolutely key and should it also fall back below 50, this could spark a significant sell-off globally. Estimates point towards a pull back to 50.5 from 51.0 last month. Given the proximity of this to the key 50.0 mark, it is well worth looking out for this release.

Finally in Australia, a busy week is dominated by the RBA monetary policy statement which sees governor Glenn Stevens take the stand once more in what is likely to be a somewhat less showstopping meeting than usual. One of the key drivers behind the dovish rhetoric from Stevens has been the need to drive the AUD rate lower. However, with the Aussie continuing to fall, signs point towards things going the right way for the RBA. That being said, not long ago he explicitly mentioned a target of 0.85 for the AUDUSD pair, and with the level currently at 0.875 there is still some way to go. Thus I would say that it is unlikely we are going to see a reduction in the interest rate this month, yet the accompanying statement will still be crucially important to how markets perceive this event.
 
UK Opening Call from Alpari UK on 3 February 2014

Week off to a bad start Chinese data disappoints

Today’s UK opening call provides an update on:

• Week off to a bad start driven by disappointing Chinese and Australian data;
• Emerging market concerns continue to weigh on investor sentiment;
• Busy week ahead with plenty of data and earnings releases, as well as three central bank meetings;
• Eurozone manufacturing PMIs in focus this morning.

We could be in for another bad week in the markets after things got off to a shaky start in Asia over night, with losses being made across the board driven largely by disappointing data from China and Australia.

The Chinese non-manufacturing PMI dropped to 53.4 in January, a decline that surprised no one given how the rest of the data has performed so far this year, but nonetheless weighed on markets over night. On the bright side, the figure remained comfortably above 50, the level that separates growth from contraction, while continuing to show growth, albeit slightly slower, in both the services and construction sectors.

Data out of Australia wasn’t any better with the number of building permits in December falling by 2.9%, well below the flat reading that was expected. This is just the latest disappointing figure from a country that is struggling to adapt to life after double digit growth in China that provided a significant boost to Australia’s mining sector. With the central bank meeting tomorrow, this could further encourage policy makers to cut rates again in order to provide a further boost to the economy and devalue the currency to a level its more comfortable with.

These figures just further dampened investor sentiment, which was already pretty low as a result of what’s going on in the emerging economies at the moment. Investors have been concerned about what impact the Fed’s tapering could have on these countries for quite a while now, prompting a similar reaction in the middle of last year when Ben Bernanke first hinted at tapering.

I don’t think this panic will last, although I do expect repeats of this throughout the year as the Fed brings it asset purchase program to a close. Given the size of the rally in stocks last year, I think part of this sell-off is being driven by investors using the emerging markets story as an excuse to allow for a correction in the markets.

This week could be very important from an investor sentiment standpoint, with plenty of economic data being released, including the US jobs report on Friday, three central bank meetings taking place and another batch of earnings being announced. This morning we have a number of manufacturing PMIs being released from the eurozone, all of which are expected to show a slight improvement compared to December.

Over in the US later we also have some manufacturing figures being released, as well as construction data for December. Overall though, the US session is likely to be pretty quiet, with trading volumes taking their normal hit on the day following the Super Bowl.
 
Daily Market Update - 3 February 2014 - Alpari UK


James Hughes look at a negative start to the week for financial markets and looks ahead to a key week of economic data with the ECB and Non-farm payrolls looking to take centre stage.
 
UK Opening Call from Alpari UK on 4 February 2014

Further negativity over night weighs on European futures

Today’s UK opening call provides an update on:

• Disappointing manufacturing data prompts further selling on Monday;
• Negativity carries over the Asia and Europe, where futures are around 1% lower this morning;
• UK construction PMI and Spanish unemployment data being released this morning;
• Nikkei takes another beating as yen correction continues;
• RBA reluctantly keeps rates at 2.5% while dropping dovish comments from this month’s statement.

We’re looking at another negative start to the European session on Tuesday, following another sell-off in the US on Monday in response to some weaker than expected manufacturing data, which prompted a similar reaction in Asian stocks over night.

To be honest, the response to the manufacturing data on Monday was a little over the top, which just highlights the risk averse approach from investors right now. The drop in the figure on Monday, like the decline in a number of the data releases for December and January, was driven largely by the terrible weather in the US, which is only going to be a temporary factor.

With that in mind, what we’re seeing in the markets so far this year may not be investors panicking about the turmoil in emerging markets, or the ongoing weaknesses in corporate earnings, or even the poor data coming out of the US for December and January. Instead, I believe these are all simply being used as an excuse for investors to allow for the significant correction that many investors have been calling for, for a number of months now. Which begs the question, when are investors going to start buying the dips.

Well, I don’t think it will be this week, not with such an important US jobs report being released on Friday and a huge ECB meeting on Thursday. With dreadful weather negatively impacting the December and January figures in the US, I will be very surprised to see a strong jobs report this week, which means the negativity may persist for another couple of weeks yet. However, once we start seeing decent figures again for February, I believe investors will start buying into the dips again, and at levels that back in December would have been seen as a huge bargain.

What that means today though is that this risk aversion in likely to continue. Especially as there’s very little economic data being released in either Europe and the US. There’s only a couple of notable releases this morning, the first being the Spanish unemployment change figure. This is expected to show a decline of 21,300 in January, which is quite encouraging but will have little impact on the overall rate of unemployment rate, which currently stands at a staggering 26.03%.

Also this morning we have the UK Construction PMI for January, which is expected to fall slightly from the month before, while still remaining at extremely high levels of 61.5. This is a very good sign for the sustainability of the UK recovery, which is clearly being felt in all sectors of the economy, despite being driven largely by a pickup in the housing market and consumer spending. That said, this has been one of the wettest January’s in years, which could negatively impact this figure in the short term.

Given investors’ reaction to other blips in the data recently, it will be interesting to see what the response will be if the figure does in fact decline much more than is currently expected, which I think is very likely. There’s been a lot of optimism around the UK recovery over the last six months or so, but that doesn’t mean the country is immune to fear driven sell-offs by risk averse investors, regardless of how unjustified it may seem.

The mood was no better over night during the Asian session. The Nikkei suffered further sell-offs, driven by a short term strengthening of the yen, which brings this year’s losses to more than 12%, meaning the Japanese index is technically in a correction phase.

The Australian dollar rallied over night after the Reserve Bank of Australia Governor Glenn Stevens was forced to release a more hawkish statement in response to the rising levels of inflation. Stevens had previously claimed that the RBA was ready to cut rates further if needed, while claiming the fair exchange rate for the aussie against the US dollar was around 85 cents, just under 4 cents below current levels. This was dropped from today’s statement which prompted a rally in the aussie, a response I’m sure Stevens will not be too happy with.

Ahead of the open we expect to see the FTSE down 45 point, the CAC down 32 points and the DAX down 91 points.
 
US Opening Call from Alpari UK on 4 February 2014

European indices track US and Asian counterparts lower

Today’s US opening call provides an update on:

* European indices taking a cue from their US and Asian counterparts;
* Risk aversion likely to continue beyond this week’s US jobs report;
* Quiet US session expected, due partly to a lack of catalysts;
* Spanish unemployment remains a concern;
* UK construction PMI hits highest level since August 2007

European indices are trading lower across the board on Tuesday, as investors take a cue from the US and Asia overnight, where indices took another beating.

US futures on Tuesday though are pointing higher, a move that’s probably more reflective of profit taking than an improvement in investor sentiment. Traders have clearly been very risk averse so far this year, with capital flight in emerging markets, a disappointing start to earnings season and poor economic data for the months of December and January all contributing.

That said, I don’t think this is the start of a longer term bearish move in the markets as none of the above are likely to be major issues in the months to come. Things are likely calm down in emerging markets, although I imagine there will be a few more smaller flare ups this year, corporate earnings over the last week have shown a significant improvement and the poor data is largely driven by unusually poor weather in the US and is therefore only likely to be temporary.

Investors know all this which is why I think all of these are simply being used as an excuse to lock in profits following such an incredible year for equity markets and allow the long awaited correction to happen. I don’t believe the correction is over yet though so I expect this risk averse behaviour from investors t continue in the coming weeks, with Friday’s jobs report likely to disappoint again following even worse weather in January than we saw in December.

Friday’s jobs report is even more important than normal following last month’s dreadful numbers, which is likely to lead to increased risk aversion in the lead up to Friday. This won’t be helped today either by the severe lack of catalysts for the markets, with the number of economic releases only really picking up tomorrow. The only notable release from the US is the December factory orders number, which is expected to show a 1.7% decline, probably again largely driven by poor weather.

It’s not been much better during the European session this morning, with only a couple of pieces of data being released. The Spanish unemployment change was extremely poor, especially when compared to recent months and today’s expectations. The number of unemployed rose by 113,100 against expectations of a 21,300 decline. This is a huge miss and a big concern for country given that we were starting to see signs of improvement here. The last release showed unemployment at above 26% which is already extremely unhealthy.

The data out of the UK was much better though, which helped provide a small boost today. The construction PMI rose to 64.6, the highest since before the great recession began, exceeding expectations of a drop to 61.5. This is a huge positive for the UK as it shows that the improvement last year is continuing to be felt throughout the economy, not just in the services sector which has been largely responsible for the recovery so far.

Ahead of the open we expect to see the S&P up 1 point, Dow up 6 points and the NASDAQ down 2 points.
 
Daily Market Update - 4 February 2014 - Alpari UK


Markets continue to fall amid ongoing emerging market fears and US slowdown - 00:09
RBA statement more dovish, removing comment on weaker AUD - 00:48
UK construction PMI shows sharpest rise in output since 2007 - 02:03
Spanish unemployment spikes yet not as bad as first seems - 03:38

Research analyst Joshua Mahony discusses the ongoing sell-off driven by emerging worries fears and poor US data. Overnight the RBA took the headlines, taking a notably more hawkish stance, sending the AUD higher. In the UK, the construction PMI showed the highest output growth in 7 years, counteracting the poor manufacturing figure yesterday. Finally, Joshua discusses the Spanish unemployment change which whilst disappointing, actually wasn't as bad as first perceived.
 
UK Opening Call from Alpari UK on 5 February 2014

Europe set for another negative open as focus turns to data

Today’s UK opening call provides an update on:

* Eurozone services PMIs expected to point to improved sentiment in January;
* Strong November retail sales expected to carry on into the holiday period.
* UK services sector expected to recover following temporary blip in the last couple of months;
* Focus switches to US labour market this afternoon, with ADP figure being released

European stocks are set for another negative start on Wednesday, with all of the major indices currently seen opening around a third of a percentage point lower.

Quite often, European investors will take a cue from their US and Asian counterparts but that doesn’t appear to be the case today as both of these recorded modest gains over night. This could simply be a case of risk aversion ahead of a potentially huge European Central Bank meeting tomorrow. Regardless, there’s plenty of economic data being released this morning which may give the markets a temporary shot in the arm.

First up are the eurozone services PMIs, many of which are revised figures meaning the market impact is likely to be limited. That said, we have seen many occasions in the past when these revisions have been quite significant, so these releases should not be overlooked. Especially when people are looking for signs that conditions in the eurozone are improving, albeit at a very slow pace, and that countries like France, Italy and Spain aren’t going to be a threat to this in the coming months.

France has emerged as the biggest concern over the last 12 months, although there were a few months in the middle when we started to see encouraging PMI figures and the country climbed out of recession. However, that didn’t last long and the country could be confirmed as back in recession when the first GDP estimate is released on 14 February. The recent PMI figures haven’t looked to good either, with both manufacturing and services having been in contraction territory since November. That isn’t expected to change today with the number improving slightly, to 48.6, while remaining below the key 50 level that separates growth from contraction.

The problem with PMIs is that they are only an indication of potential performance in the months ahead based on current sentiment, which is why the figures can sometimes be taken with a pinch of salt. Retail sales figures though, which will be released shortly after, will provide important insight into consumer spending habits around the holiday season.

The November reading showed the biggest year on year improvement in retail sales since March 2010, which could be a sign that consumer sentiment is improving. For December, we’re expecting another strong retail sales figure, around 1.5%, which would be a good sign for the euro area going into the new year. That said, we’ve seen in the past that these figures can be very volatile so I wouldn’t be surprised to see a significant miss here. Especially if it turns out that the November gains were driven by people preparing for the holiday season earlier than normal and spreading the cost over a couple of months, rather than leaving it all until December.

Over in the UK, the services PMI reading is expected to edge higher to 59, having pulled back in December. The services sector is extremely important to the UK, accounting for around two thirds of GDP, so this is seen as the most important of all the PMI readings. These have been mixed so far this month, with manufacturing falling short, while yesterday’s construction number comfortably exceeded expectations. Another strong reading this morning would suggest the recovery is continuing to gather momentum in the early part of 2014.

Finally it’s over to the US later, where we have another batch of economic data being released, although this time the focus will switch to the labour market. Investors will be looking to the ADP non-farm employment change to provide some insight into what we can expect from Friday’s non-farm payrolls figure, although I’m not sure they should bother. Questions are always raised about the accuracy of this as an estimate for the NFP and last month’s reading was a key example of how unreliable it is. With this in mind, we should all take it with a pinch of salt, as I’m sure many others will do today.

Also being released in the US are two services PMI readings, both of which are expected to remain comfortably above 50, the level that separates growth from contraction. Before these though we have the MBA mortgage applications to give us some insight into how the housing market performed at the end of January. The figures haven’t been that great recently due to higher mortgage rates and poor weather. It’s important that things the housing market picks up again as this tends to boost consumer confidence, which is what drove the US recovery for most of last year.
 
Top