WEEKLY MARKET RECAP, WEEK AHEAD, AND SCHEDULE

WEEKLY MARKET RECAP, WEEK AHEAD, AND SCHEDULE
22 February 2009

Sunday
The euro depreciated vis-à-vis the U.S. dollar last week as the single currency tested bids around the $1.2510 level and was capped around the $1.2825 level. The pair lost about 230 pips last week. Eastern European meltdown jitters surfaced and western European banks’ exposures there dominated. Obama signed the US$ 787 stimulus bill and talk lingers his administration may nationalize some U.S. banks. Credit default swaps widened globally.
ECB’s Trichet would not rule out “non-standard action.” Tumpel-Gugerell said the ECB is revising its 2009 and 2010 forecasts. Stark called for “gradualism” in monetary policy. The European Commission criticized six countries, including France , for large budget deficits. Germany reported a “cloudy economic outlook” and passed a €50 billion stimulus.
Data released in the U.S. last week saw the February New York State Empire Index fall to -34.65; December net long-term TICS capital flows grew to US$ 34.8 billion; January housing starts were off 16.8%; January building permits were off 4.8%; January industrial production fell to 101.3 with capacity utilization lower at 72.0%; the January import price index improved to -1.1%; January headline PPI was up 0.8% m/m with core PPI up 0.4% m/m and 4.2% y/y; weekly initial jobless claims were steady at 627,000 with continuing jobless claims higher at a 42-year high; the Philadelphia Fed’s manufacturing survey printed at -41.3; the U.S. January leading index gained 0.4%; and January core CPI was up 0.3% m/m and 1.7% y/y.
Data released in the eurozone last week saw the EMU-15 trade balance print at -€700 million; the German February ZEW economic sentiment index improved to -5.8; and EMU-16 manufacturing PMI fell to 33.6 in January with PMI services lower at 38.9.
Technical Outlook
Last week’s high (1) was below the 76.4% retracement of the 1.2328-1.4718 range and last week’s low (2) was neared multi-month lows. The 1.2892/ 1.2927/ 1.3204/ 1.3359/ 1.3597/ 1.3745 levels represent upside resistance targets while the 1.2548/ 1.2328 levels represent downside support targets.
¥/ CNY
The yen depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the ¥94.45 level and was supported around the ¥91.40 level. The pair gained about 225 pips last week. The Nikkei 225 stock index lost 1.87% on Friday to close at ¥7,416.38. Finance minister Nakagawa resigned after an embarrassing G7 speech and Yosano is assuming his helm. Japan may be planning an additional ¥20 trillion stimulus. PM Aso’s favourable approval ratings are below 10%. The government downgraded its economic assessment for the fifth consecutive month, noting the economy is “worsening rapidly while in a severe situation.” The government may compile its fourth stimulus package since August.
Data released in Japan this week saw Q4 GDP off 3.3% q/q; December revised industrial output was off 9.8% m/m; January total machinery orders were off 48.4% m/m and 84.1% y/y; and the 2008 current account surplus was around US$ 440 billion.
Last week’s high (1) was below the 38.2% retracement of the 110.64-87.10 range and last week’s low (2) was below the 23.6% retracement of the same range. Upside resistance targets remain the 96.10/ 97.53/ 98.43/ 101.65 levels while downside support targets remain the 92.66/ 88.88/ 87.10/ 84.20 levels.
The Chinese yuan appreciated vis-à-vis the U.S. dollar as the greenback closed at CNY 6.8367 in the over-the-counter market, down from CNY 6.8392. The G7 praised China ’s “fiscal measures and continued commitment to move to a more flexible exchange rate.” A government official said USD/CNY may reach 6.95 to 7.00.
Data released in China last week saw January foreign direct investment off 32.6% to US$ 7.54 billion.
₤
The British pound depreciated vis-à-vis the U.S. dollar last week as cable tested bids around the US$ 1.4090 level and was capped around the $1.4445 level. The pair lost about 50 pips last week. The G7 did not discuss sterling. MPC’s Bean said sterling’s weakness may be helping the current account deficit. BoE chief King said the MPC wants to expand the money supply by purchasing government and other securities through its Asset Purchase Facility. MPC’s Besley said the BoE has “unfinished business.” Outgoing BoE #2 Gieve expects quantitative easing soon to stave off a possible 10-year depression.
Data released in the U.K. last week saw Rightmove February asking house prices were off 9.1% y/y; January CPI was off 0.7% m/m and up 3.0% y/y with core off 0.8% m/m and up 1.3% y/y; the January DCLG house price index fell 10.2; the CBI February industrial output balance fell to -44; January average pay rose 1.9% y/y; M4 money supply growth expanded 17.5% y/y; January public sector net borrowing fell to -₤3.3 billion; January retail sales climbed 0.7% m/m and 3.6% y/y; and 2008 home repossessions reached a twelve-year high.
Last week’s high (1) was below the 23.6% retracement of the 2.0156-1.3501 range and last week’s low (2) was near a multi-decade low. Upside resistance targets include the 1.4720/ 1.5071/ 1.5475/ 1.6043 levels while downside support targets include the 1.3682/ 1.3501/ 1.2810 levels.
CHF
The Swiss franc depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the CHF 1.1885 level and was supported around the CHF 1.1580 level. The pair gained about 185 pips last week. The franc lost ground on UBS’s provision of information on U.S. investors who held unknown accounts outside of the U.S.
Data released in Switzerland last week saw December retail sales climb 3.6% y/y and the January trade balance reached CHF 2.03 billion.
Last week’s high (1) was above the 76.4% retracement of the 1.2298-1.0371 range and last week’s low (2) was right around the 61.8% retracement of the same range. Upside resistance targets include the 1.1843/ 1.2298 levels while downside support targets include the 1.1672/ 1.1562/ 1.1424/ 1.1285 levels.
CAD
The Canadian dollar depreciated vis-à-vis the U.S. dollar last week as the greenback tested offers around the C$ 1.2670 level and was supported around the C$ 1.2390 level. The pair gained about 260 pips last week.
Data released in Canada last week saw December manufacturing shipments off 8%; December wholesale sales were off 3.4%; January leading indicators fell to -0.8%; and January consumer prices climbed to -0.3% m/m and 1.1% y/y.
Last week’s high (1) was near multi-month highs and last week’s low (2) was above the 23.6% retracement of the 0.9818-1.3006 range. Upside resistance targets include the 1.2673/ 1.2752 levels while downside support targets include the 1.2254/ 1.2053/ 1.1788/ 1.1412 levels.
AUD
The Australian dollar depreciated vis-à-vis the U.S. dollar last week as the Aussie tested bids around the US$ 0.6330 level and was capped around the US$ 0.6540 level. The pair lost about 170 pips last week.
Data released in Australia last week saw December personal finance up 4.1% m/m; January merchandise imports were off 14% m/m at A$ 17.26 billion; Q4 retail sales were up 0.8% q/q; the December leading economic index was off an annualized 1.2%;
Technical Outlook
Last week’s high (1) was below the 50.0% retracement of the 0.6007-0.7266 range and last week’s low (2) was right around the 76.4% retracement of the same range. Upside resistance targets include the 0.6488/ 0.6637/ 0.6785/ 0.6914/ 0.6969/ 0.7262 levels while downside support targets include the 0.6305/ 0.6007 levels.
SCHEDULE
Sunday, 22 February 2009
all times GMT
(last release in parentheses)
N/A
Monday, 23 February 2009
all times GMT
(last release in parentheses)
N/A Japan February small business confidence (24.8)
N/A Germany January wholesale price index (-3.0% m/m)
N/A Germany January wholesale price index (-3.3% y/y)
N/A UK February Nationwide house prices (-1.3% m/m)
N/A UK February Nationwide house prices (-16.6% y/y)
0500 Japan January supermarket sales (-2.8% y/y)
0800 CH January M3 money supply (2.4% y/y)
0900 Italy January consumer price inflation
1330 Canada December retail sales (-2.4% m/m)
1330 Canada December retail sales, ex-autos (-2.3% m/m)
1740 US Atlanta Federal Reserve President Lockhart speaks
2350 Japan Bank of Japan Policy Board meeting minutes
2350 Japan January corporate service prices (-2.5% y/y)
Tuesday, 24 February 2009
all times GMT
(last release in parentheses)
0030 Australia January balance of payments imports (-2.0% m/m)
0745 France February consumer confidence (-41)
0745 France January consumer spending (-0.9% m/m)
0745 France January consumer spending (-1.7% y/y)
0745 France January housing starts (-16.0%)
0745 France January housing permits (-11.1%)
0815 CH Q4 employment level (3.956 million)
0830 Italy February consumer confidence
0900 Eurozone December current account (-€16.0 billion)
0900 Germany February Ifo, business climate (83)
0900 Germany February Ifo, current assessment (86.8)
0900 Germany February Ifo, expectations (79.4)
0900 CH January UBS consumption indicator (1.15)
0930 UK Q4 total business investment (-1.3% q/q)
0930 UK Q4 total business investment (-0.1% y/y)
0930 UK January BBA loans for house purchase
1000 Eurozone December industrial new orders (-4.5% m/m)
1000 Eurozone December industrial new orders (-26.2% y/y)
1400 US Q4 S&P/ Case-Shiller home price index
1500 US Federal Reserve Chairman testifies before Senate
1500 US February consumer confidence (37.7)
1500 US December house price index (-1.8% m/m)
1500 US Q4 house price purchase index (-1.8% q/q)
1500 US February Richmond Fed manufacturing index (-49)
2145 NZ Q1 RBNZ 2-yea inflation expectation (2.7%)
2350 Japan January merchandise trade balance (-¥320.7 billion)
Wednesday, 25 February 2009
all times GMT
(last release in parentheses)
0030 Australia Q4 construction work done (4.4%)
0030 Australia Q4 wage cost index (0.9% q/q)
0030 Australia Q4 wage cost index (4.1% y/y)
0700 Germany Q4 gross domestic product (-0.5% q/q)
0700 Germany Q4 gross domestic product (-1.7% y/y)
0830 Italy February business confidence (65.5)
0900 Italy December retail sales (-0.2% m/m)
0900 Italy December retail sales (-3.0% y/y)
0930 UK Q4 gross domestic product (-1.5% q/q)
0930 UK Q4 gross domestic product (-1.8% y/y)
1200 US MBA mortgage applications
1500 US January existing home sales (4.74 million)
1500 US January existing home sales (6.5% m/m)
2145 NZ January trade balance (-NZ$ 347 million)
2300 Australia December leading index (-1.0%)
2350 Japan Foreign purchases of Japanese equities and bonds
2350 Japan Japanese purchase of foreign equities and bonds

Thursday, 26 February 2009
all times GMT
(last release in parentheses)
N/A Germany February consumer price index
0030 Australia Q4 private capital expenditure (0.6%)
0200 NZ February NBNZ business confidence
0200 NZ January M3 money supply (6.3% y/y)
0700 Germany January ILO unemployment rate (7.2%)
0710 Germany March GfK consumer confidence (2.2)
0855 Germany February unemployment change (56,000)
0855 Germany February unemployment rate (8.5%)
0900 Eurozone January M3 money supply (7.3% y/y)
1000 Eurozone February economic confidence (68.9)
1000 Eurozone February consumer confidence (-31)
1000 Eurozone February climate indicator (-3.16)
1000 Eurozone February industrial confidence (-34)
1000 Eurozone February services confidence (-22)
1330 US January durable goods orders (-2.6%)
1330 US January durable goods orders, ex-transportation (-3.6%)
1330 US Weekly initial jobless claims
1330 US Continuing jobless claims
1330 Canada Q4 current account
1500 US January new home sales (331,000)
1550 US January new home sales (-14.7% m/m)
2145 NZ January building permits (-6.0% m/m)
2315 Japan February PMI, manufacturing (29.6)
2330 Japan January jobless rate (4.4%)
2330 Japan January household spending (-4.6% y/y)
2330 Japan February Tokyo CPI (0.5% y/y)
2330 Japan February Tokyo CPI, ex-food and energy (-0.3% y/y)
2330 Japan January national consumer price index (0.4% y/y)
2330 Japan January national CPI, ex-food and energy (0.0% y/y)
2350 Japan January retail trade (-1.9% m/m)
2350 Japan January retail trade (-2.7% y/y)
2350 Japan January industrial production (-9.8% m/m)
2350 Japan January industrial production (-20.8% y/y)
2350 Japan January large retailers’ sales (-6.2%)
Friday, 27 February 2009
all times GMT
(last release in parentheses)
0001 UK February GfK consumer confidence survey (-37)
0030 Australia January private sector credit (-0.3% m/m)
0500 Japan January housing starts (-5.8% y/y)
0500 Japan January housing starts, annualized (1.001 million)
0500 Japan January construction orders (-27.3% y/y)
0830 Italy February services survey
1000 Eurozone January consumer price index (-0.1% m/m)
1000 Eurozone January consumer price index (1.6% y/y)
1000 Eurozone January consumer price index (1.8% y/y)
1000 Eurozone January unemployment rate (8.0%)
1030 CH February KOF leading indicator (-0.87)
1330 Canada Q4 current account (C$5.6 billion)
1330 Canada January raw materials price index
1330 Canada January industrial product prices
1330 US Q4 gross domestic product, annualized (-3.8%)
1330 US Q4 personal consumption expenditure, core (0.6% q/q)
1330 US Q4 GDP price index (-0.1%)
1445 US February Chicago PMI (33.3)
1500 US February University of Michigan consumer sentiment (56.2)
1500 US San Francisco Federal Reserve President speaks
1500 US St. Louis Federal Reserve President Bullard speaks
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