Rekap Funda 8 - 12 Februari 2016

Meskipun Non Farm Payrolls AS bulan Januari hanya bertambah 151,000, namun upah rata-rata per jam naik 0.5% (m/m) dan +2.5% (y/y), persentase kenaikan tertinggi dalam setahun terakhir, serta tingkat pengangguran turun dibawah level psikologis 5.0% pada  angka 4.9%, terendah sejak Nopember 2007. Kenaikan tingkat upah rata-rata dan turunnya angka pengangguran tersebut seperti yang diharapkan The Fed sehingga menyebabkan USD menguat tajam saat rilis ke 3 data tersebut.

Namun secara keseluruhan minggu lalu USD masih melemah terhadap semua mata uang utama akibat komentar anggota FOMC William Dudley yang menambah keraguan akan kemungkinan kenaikan suku bunga pada FOMC meeting 16-17 Maret nanti. Untuk minggu ini pergerakan greenback akan sangat dipengaruhi oleh isi testimoni ketua The Fed Janet Yellen hari Rabu dan Kamis mendatang mengenai kebijakan moneter, yang merupakan testimoni pertama sejak kenaikan suku bunga Desember tahun lalu.

Selain itu minggu ini juga akan dirilis data Flash GDP kawasan Euro dan Preliminary GDP Jerman kwartal ke 4 tahun 2015 yang keduanya diharapkan kembali tumbuh 0.3%. Bulan Desember tahun lalu Mario Draghi telah memangkas suku bunga deposito sebesar 0.10% menjadi -0.30% dan memperpanjang waktu quantitative easing (QE) selama 6 bulan hingga Maret 2017. Jika pertumbuhan ekonomi kawasan lebih rendah dari yang diperkirakan atau mengalami kontraksi, diperkirakan European Central Bank (ECB) akan mempertimbangkan untuk menambah stimulus.

Data dan peristiwa penting lainnya adalah Retail Sales AS bulan Januari yang diperkirakan akan kembali naik 0.1% seiring dengan naiknya upah dan tingkat kepercayaan konsumen, Manufacturing Production Inggris, testimoni gubernur RBA Glenn Stevens, indeks kepercayaan konsumen AS versi UoM, Jobless Claims AS dan indeks kepercayaan bisnis NAB Australia.

Senin, 8 Februari 2016:
Hari libur bank-bank di Selandia Baru (Waitangi day)
Jam 06:50 WIB: data Current Account Jepang bulan Desember 2016
Jam 14:00 WIB: data Industrial Production Jerman bulan Desember 2015
Jam 16:30 WIB: indeks kepercayaan investor kawasan Euro versi Sentix bulan Pebruari 2016
Jam 20:30 WIB: data Building Permits Canada bulan Desember 2015

Selasa, 9 Februari 2016:
Jam 07:30 WIB: indeks kepercayaan bisnis Australia versi National Australia Bank (NAB) bulan Januari 2016
Jam 14:00 WIB: data neraca perdagangan Jerman bulan Desember 2015
Jam 16:30 WIB: data neraca perdagangan Inggris bulan Desember 2015
Jam 18:00 WIB: indeks NFIB Small Business di AS bulan Januari 2016
Jam 22:00 WIB: data Job Openings and Labor Turnover Summary (JOLTS) AS bulan Desember 2015

Rabu, 10 Februari 2016:
Jam 06:30 WIB: indeks kepercayaan konsumen Australia versi Westpac bulan Januari 2016
Jam 16:30 WIB: data Manufacturing Production dan Industrial Production Inggris bulan Nopember 2015
Jam 22:00 WIB: testimoni ketua The Fed Janet Yellen didepan House Financial Services Committee, di Washington DC
Jam 22:30 WIB: data persediaan minyak mentah untuk industri di AS per 5 Pebruari 2016

Kamis, 11 Februari 2016:
Hari libur bank-bank di Jepang (National Foundation Day)
Pertemuan Eurogroup
Jam 15:15 WIB: data Consumer Price Index (CPI) Swiss bulan Januari 2016
Jam 20:30 WIB: data Jobless Claims AS per 5 Pebruari 2016
Jam 20:30 WIB: New Housing Price Index (NHPI) Canada bulan Desember 2015
Jam 22:00 WIB: testimoni ketua The Fed Janet Yellen didepan Senate Banking Committee, di Washington DC

Jum’at, 12 Februari 2016:
Pertemuan Economic and Financial Affairs Council (ECOFIN)
Jam 05:30 WIB: testimoni gubernur Reserve Bank of Australia (RBA) Glenn Stevens didepan House Representatives' Standing Committee on Economics, di Sydney
Jam 14:00 WIB: data Preliminary Gross Domestic Product (GDP) Jerman kwartal ke 4 tahun 2015
Jam 14:00 WIB: data CPI Final Jerman bulan Januari 2016
Jam 17:00 WIB: data Flash GDP kawasan Euro kwartal ke 4 tahun 2015
Jam 17:00 WIB: data Industrial Production kawasan Euro bulan Desember 2015
Jam 20:30 WIB: data Retail Sales AS bulan Januari 2016
Jam 22:00 WIB: indeks kepercayaan konsumen AS versi University of Michigan (UoM) bulan Pebruari 2016 (Preliminary)
Jam 22:00 WIB: pidato anggota FOMC William Dudley

Sumber : Seputarforex

Data to set the mood for BoC meeting

This week's data releases will probably set the mood for BoC's meeting on September 9. The resilience of the Canadian consumer, together with satisfactory readings for inflation, is in line with the rhetoric of the BoC, which expects consumption and the non-energy sector to support the economy. 

However, weakness in manufacturing, which so far has failed to capitalize on a weaker looney, faltering global demand, and continued feebleness in oil prices, could continue to hurt the Canadian economy.

"We anticipate commodity prices to remain under pressure as uncertainty about China prevails. As such, we continue to expect the USDCAD to reach 1.40 in the months ahead and would view any dip toward 1.3200 as a buying opportunity", notes Barclays.

The release of the current account balance (Monday) and international merchandise trade (Thursday) will shed light on the strength of non-resource exports. In addition, we will get a better picture on the state of real activity with the release of Q2 GDP (consensus -0.9% y/y) and June's monthly GDP (consensus 0.3%) on Tuesday. Finally, we get unemployment data on Friday.

All eyes on the ECB

The ECB is expected to nod in the direction of further policy easing at this week's Governing Council meeting (Thursday), with risks skewed toward more forward-leaning guidance and possibly even action. Since the last policy meeting in July, effective appreciation of the EUR, falling commodity prices, and an elevation of the risks to foreign growth have reduced the near- and medium-term inflation outlook and tighten overall financial conditions as breakevens have fallen anew. The ECB staff macroeconomic projections are likely to show a downward revision in inflation forecasts for both 2015 and 2016. Thus, the ECB, at a minimum, is expected to signal its ability and willingness to ease further if monetary and financial conditions tighten further. 

By year-end, it is expected that the ECB will announce an extension of the minimum period for its asset purchase program - an announcement that may even come next week - and possibly in the future extend the size and scope of the purchase program or a cut in the deposit rate further into negative territory. 

"We believe that the last of these measures - although highly unlikely at next week's meeting - would be most effective in generating greater downward pressure on the EUR, but all should lead to some measure of additional depreciation", says Barclays.

In terms of data, consensus expect August euro area "flash" HICP inflation to have declined by 0.1 percentage point, to +0.1% y/y in August (Monday), and core inflation to have eased to +0.9% y/y, from +1.0% y/y previously. Headline inflation is expected to decline further to zero in September and October before it starts recovering from November onward. Final August euro area manufacturing and services PMIs (Tuesday and Thursday, respectively) are likely to be confirmed at 52.4 and 54.3, in line with the consensus forecasts.

20U.S. Open: Dollar regains footing after wobble in Asia, Oil remains under pressure - 01 April, 2015

Market Roundup

• Dollar index inching closer to 98.665 Tuesday's high
  
• BOJ Gov Kuroda: Even if yields rise BOJ does not book losses on its JGB holdings; JGB buying is aimed at achieving 2 pct inflation target.
  
• Greek Economy Minister Stathakis says expects agreement with Greece's creditors on reforms will be reached next week.
  
• United Kingdom Mar Markit/CIPS mfg PMI increase to 54.4 (consensus 54.3 ) vs previous 54.1.
  
• European Union Mar Markit mfg final PMI increase to 52.2 (consensus 51.9 ) vs previous 51.9.
  
• Germany Mar Markit/BME mfg PMI increase to 52.8 (consensus 52.4 ) vs previous 52.4.
  
• France Mar Markit mfg PMI increase to 48.8 (consensus 48.2 ) vs previous 48.2.
  
• Italy Mar Markit/ADACI mfg PMI increase to 53.3 (consensus 52.3 ) vs previous 51.9.
  
• China Mar HSBC mfg PMI final increases to 49.6 vs previous 49.2.

Economic Data Ahead

• (0800 EDT/1200GMT) US MBA Weekly Mortgage Application Activity Indices
  
• (0915 EDT/1315GMT) US ADP National Employment Report (Mar) consensus +240k, previous +212k
  
• (1045 EDT/1445GMT( US Markit Manufacturing PMI (final Mar) previous 55.3
  
• (1100 EDT/1500GMT) US Construction Spending (Feb) consensus 0.0% m/m, previous -1.1% m/m
  
• (1100 EDT/1500GMT) US ISM Manufacturing (Mar) consensus 52.5, previous 52.9
• (1130 EDT/1530GMT) US EIA Weekly Petroleum Statistics

Key Events Ahead

• (0830 EDT/1230GMT) FRB San Francisco's Williams on financial stability; Stone Mountain, GA
  
• (1245 EDT/1645GMT) FedTrade 30-year Fannie Mae/Freddie Mac (max $2.025 bln)
  
• (1530 EDT/1930GMT) FedTrade 15-year Fannie Mae/Freddie Mac (max $650 mln)

FX Recap

The USD is expected to return to its strengthening trend, but the pace of appreciation will be slower than recently witnessed. Higher short-term interest rates remain the base case scenario, yet the timing of the first move by the Federal Reserve (Fed) has been reassessed.

EUR/USD fell 70 pips from 1.0793 (today's high) and currently trades as 1.0739 levels. The euro (EUR) retains a defensive tone and further weakness is in sight. Europe remains fragile, and there is no evidence of material shifts in a bearish fundamental picture in the European landscape. An uptick in inflation and high-frequency data releases suggest that Europe is stabilizing, benefitting from the combination of stimulus provided by EUR depreciation, low oil prices, and low bond yields. However, the divergence in monetary policy and growth will likely keep the EUR trending lower. It is likely to find support at 1.0710, 1.0650 and 1.0500 levels. Resistance is seen at 1.0750 and then at 1.800 levels. Option Expiries at 1.0750 (359M), 1.0800 (2.4BLN).

GBP/USD traded in the red in mid-European session as traders completely ignored upbeat UK manufacturing PMI. It currently trades at 1.4753 levels, having posted a fresh session low at 1.4750 levels. The British pound (GBP), which has been steadily underperforming versus the USD since July 2014, is vulnerable to extend its declining trend. The GBP will be influenced by the combination of disinflationary dynamics, a well-entrenched global investor preference for the USD and to a lesser extent policy uncertainties linked to the approaching general elections scheduled for May 7th, 2015. The Bank of England will remain data-sensitive in the near term, as it faces a disinflationary environment, with the most recent consumer prices print at 0.0% y/y. The pair sees resistance at 1.4872 levels and then at 1.4900 levels. Support is located at 1.4750 and 1.4720 levels. Option expiries at 1.4900 (226M).

USD/JPY recovered its losses in Asia and has broken above the 120 mark. It currently trades at 120.20 levels. The Japanese yen (JPY) remains on the defensive. Japan's fundamental backdrop has deteriorated and the Bank of Japan (BoJ) is expected to struggle towards its 2% inflation goal without further stimulus. Pair sees near-term resistance at 120.34, 120.81 levels and support at 119.69, 119.51 levels. Option expiries at 119.50-55 (740M).
USD/CAD was unsuccessful to hold its move above the 1.27 mark and currently trades at 1.2693 levels. Weakness in commodity prices seems to be helping the Canadian dollar. WTI was trading at USD 47.20/barrel, down 40 cents on the day. The CAD is expected to reach fresh lows in 2015, closing the year at 0.75 (USDCAD at 1.33) but then stabilize in 2016, averaging 0.76 (USDCAD 1.32). Resistance is seen at 1.27 levels and support at 1.2672 levels. Option expiries at 1.2680 (256M), 1.2700 (220M), 1.2800 (200M).

USD/CNY currently trades at 6.1985 levels. The Chinese renminbi (CNY) rebounded in March on the back of better support for Asian currencies against the USD, and stronger than expected fixings from the central bank. The yuan's fundamentals are relatively strong and this combined with ongoing currency policy liberalization should support modest gains from here. It faces strong support at 6.1840 and 6.1687 levels, resistance at 6.220 and 6.2370 levels.

AUD/USD continued its downward move on Wednesday and currently trades at 0.75891 levels. The Australian dollar (AUD) is expected to reach fresh multi-year lows in Q3 based on a soft domestic backdrop, disappointing Chinese growth, and the Reserve Bank of Australia's interest rate path and desire for a lower currency. Resistance might be located at 0.7912 levels and further at 0.7938 levels. Support is likely to be found at 0.7565 levels. Option expiries at 0.7640-50 (1BLN), 0.7600-05 (360M).

Europe Open: AUD, NZD boosted by upbeat Chinese PMI data - 01 April, 2015

Market Roundup

• US TsySec Lew: Strong USD good, global economy needs faster growth; CNY not ready for IMF blessing as reserve currency.
  
• KC Fed George: Low rates encourage "reach-for-yield", time to talk about rates liftoff, must pare accommodation, not bothered by low inflation, little worry over high USD.
  
• BoJ Tankan: Big mfg DI +12, big non-mfg +19, +14 and +17 expected, non-mfg better in general than mfg, +10 and +17 expectedin June, previous estimate +16 and +17, big firms FY '15/16 CAPEX -1.2%, previous estimate +0.5%, recurring profits +1.3%, all firm employment index -17, conditions tighter, big firms see USD/JPY avge 111.81.
  
• Japan March final mfg PMI 50.3, flash 50.4, Feb 51.6, domestic orders down.
  
• China March final HSBC mfg PMI 49.6, flash 49.2, Feb 50.7, job losses faster.
  
• China March official services PMI 53.7, Feb 53.9.
  
• Australia March PMI +0.9 pt to 46.3, mfg still in contraction.
  
• Australia Feb bldg approvals -3.2% m/m, -4% eyed, priv-sector houses -0.1%.
  
• New Zealand March QV residential property price index +7.7% y/y, Feb +6.4%.

Economic Data Ahead

• (0230 EDT/0630 GMT) Sweden Mar mfg PMI, 54.2 consensus; previous 53.3.
  
• (0315 EDT/0715 GMT)Spain Mar mfg PMI, 54.7 consensus; previous 55.0.
  
• (0330 EDT/0730 GMT) Switzerland Mar mfg PMI, 47.2 consensus; previous 47.3.
  
• (0345 EDT/0745 GMT) Italy Mar mfg PMI, 52.2 consensus; previous 51.9.
  
• (0350 EDT/0750 GMT)France Mar mfg PMI, 48.2 consensus; flash 48.2.
  
• (0355 EDT/0755GMT) Germany Mar mfg PMI, 52.4 consensus; flash 52.4.
  
• (0400 EDT/0800 GMT) Eurozone Mar mfg PMI, 51.9 consensus; flash 51.9.
  
• (0430 EDT/0830GMT) UK Mar mfg PMI, 54.3 consensus; previous54.1.
  
• (0815 EDT/1215GMT) US Mar ADP national employment, +225k consensus; previous +212k.
  
• (0945 EDT/1345GMT) US Mar Markit mfg PMI - final; flash 55.3.
  
• (1000 EDT/1400GMT) US Feb construction spending, unch m/m consensus; previous -1.1%.
  
• (1000 EDT/1400GMT) US Mar ISM mfg PMI, 52.5 consensus; previous 52.9.
  
• (1339 EDT/1730GMT) US Mar total vehicle sales, 16.7 mln AR consensus; previous 16.23 mln.

Key Events Ahead

• N/A ECB Governing Council meeting, no rate announcement scheduled.
  
• N/A Sweden treasury bill auction.
  
• N/A Atlanta Fed Stone Mountain conference, various speakers, attendees.
  
• (0630 EDT/1030GMT) Germany E4 bln zero% 2020 Bobl auction.

FX Recap  

USD/JPY moved south in the Asian session away from the 120 handle, mainly due to rising safe-haven bids for the yen and a relatively weaker US dollar. It currently trades at 119.68 levels. On the topside, resistance is seen at 120 levels and above that it could extend its climb to 120.33 levels. On the other hand, support is seen at 119.23 levels, and a break below could see the pair testing 119 levels.

AUD/USD traded positive during the Asian session, largely on the back of stronger-than-expected China's manufacturing PMI for the month of March. It currently trades at 0.7633 levels, having posted a high of 0.7662 so far. It is expected to face resistance at 0.7700 levels and a break above would make way for 0.7725 levels. On the downside, support is located at 0.7600 levels and then at 0.7562 levels.

NZD/USD traded in the green on Wednesday in the mid-Asian session, after five consecutive days of losses. The NZD has been helped by New Zealand's house price growth along with stronger China PMI figures. It currently trades at 0.7465 levels. The immediate resistance is seen at 0.7491 levels, above which gains could be extended to 0.7516 levels. Support is seen at 0.7467 levels and then at 0.7420 levels.

EUR/USD partially trimmed its losses on Wednesday and turned positive. It currently trades at 1.0787 levels, recovering from 1.0729 levels hit earlier. It is likely to find support at 1.0730 levels and a break below could extend its losses to 1.0700 levels. On the flipside, resistance is eyed at 1.0833 levels, and a breach of this level would expose the 1.0860 level.

GBP/USD rose higher in Asia from 1.4820 to 1.4871 in Asia and currently trades at 1.4869 levels. Immediate support is seen at 1.4685, the low of March 19. On the other hand, resistance is located at 1.4903, Monday's high.

Euro Area credit on the mend ?

• As per the ECB's February 'monetary developments' release, the aggregate credit trend in the Euro Area continues to improve. Loans to the private sector are now only down 0.1% on a year ago versus -0.2%yr in January and -0.5%yr in December. 
• Coming just after the full-implementation of the ECB's alternative easing measures, the ECB will likely see this as a very positive sign for the outlook. Yet the detail of the ECB credit data highlights that the private-sector credit environment remains challenging for most. 
• A material portion of the trend improvement in total private sector credit has come as a result of improved loan provision to the finance sector, now up 0.8%yr (excluding insurance corporations and pensions funds, for whom credit is up 15.3%yr). 
• For the non-financial private sector, while the retrenchment of credit is abating, there is little evidence in favour of the view that real economic activity is about to experience persistent, positive growth driven by new credit. (Note the discussion below refers to unadjusted balance sheet data to allow for detailed comparison.) 
• Households have experienced little change of late. The decline in consumer credit has lessened, from -4.1%yr in February 2014 to -1.3%yr currently; lending for house purchase is little changed from a year ago, circa 0.5%yr. A need to erode savings to fund marginal consumption (evinced by the consumer sentiment report); the structural adjustment underway in the periphery; and the marked deterioration of the French labour market in recent years all stand as material headwinds to progress - headwinds which are unlikely to abate until firms are willing to expand domestic capacity. 
• On this matter, France has seen material growth in loans to nonfinancial corporates, now up 4.1%yr compared to -0.9%yr a year ago. Of particular note is that this is not only short-term financing: the stock of loans with a duration of 1-5 years is up 8.6%yr; and loans with a duration of over 5 years are up 2.7%yr. Assuming the funds are spent at home (which is not guaranteed), this flow of credit should give much needed support to gross fixed capital formation, which fell 1.6% in 2014 following 2013's 0.8% decline. 
• Unfortunately France is currently the only nation experiencing a material improvement in non-financial corporate credit. Germany is the next best large nation, with annual growth of -0.1%yr. In Italy and Spain, credit has declined 3.5%yr and 9.7%yr respectively. Further, for the region as a whole, term funding has led the decline. The stock of loans with duration of 1-5 years are down 0.4%yr and loans over 5 years are -2.9%yr. Conversely, loans with a maturity of less than a year are up 4.1%yr. This suggests new credit is being provided/demanded for inventory and trade credit, not investment. 
• The above analysis synchs with the view that we are a long way from seeing an enduring, positive real investment uptrend take root in the Euro Area. Further, the weak state of the aggregate household sector gives little reason to expect broad-based gains in household demand, despite a liquidity and confidence-driven wealth effect for the top income decile, where wealth is concentrated. 
• Seemingly the Euro Area's greatest hope for growth is the continued erosion of the value of the Euro, in part due to the liquidity offered by the ECB to domestic financial institutions (and corporates) being 'put to work' elsewhere. Exporters and their employees benefit from increased competitiveness; corporates (and households) with foreign operations (assets) receive a profit and valuation boost; but many others with little-or-no foreign exposure miss out. These are factors which we will discuss in depth in due course. 

Courtesy of Westpac Research

Asia Open: Lack of progress on Greek debt talks weighing on EUR sentiment, Focus on PMIs, US data - 1st April, 2015

Market Roundup

• US  Redbook MM w/e 1.2%, (previous 1.1%)
  
• US  Redbook YY w/e 3%, (previous 2.8%)
  
• US  CaseShiller 20 MM SA Jan 0.9%, (consensus 0.6%, previous 0.9%)
  
• US  CaseShiller 20 MM NSA Jan 0%, (consensus 0.1%, previous 0.1%)
  
• US  CaseShiller 20 YY Jan 4.6%, (consensus 4.5%, previous 4.4%)
  
• US  Chicago PMI Mar 46.3, (consensus 51.5, previous 45.8)
  
• US  Consumer Confidence Mar 101.3, (consensus 96, previous 98.8)
  
• US  Texas Serv Sect Outlook Mar -4.6, (previous 1.7)
  
• US  Dallas Fed Services Revenues Mar 10.7, (previous 13.6)
  
• Canada  GDP MM Jan -0.1%, (consensus -0.2%, previous 0.3%)
  
• Brazil Primary Budget Surplus Feb -2.3b, (consensus 1.500b, previous 21.063b)
  
• Brazil Nominal Budget Balance Feb -58.637b, (previous 3.041b)
  
• Brazil Gross Debt/GDP Ratio Feb 65.5%, (previous 60.92%)
  
• Brazil Net Debt/GDP Ratio Feb 36.3%, (consensus 36.1%, previous 33.76%)
  
• Fed's Lacker Strong case for June rate hike, expects improved labor mkt conditions, wage growth in months ahead; USD gains driven by relative strength of US economy, favors ending reinvestment soon after raising rates
  
• US Treasury's Lew having AIIB co-finance projects w/existing institutions will demonstrate commitment to high standards, welcoming institutions depends on whether they complement existing institutions and commit to high standards
  
• Germany's Merkel Greece must respect commitments, there is flexibility on how reform measures are constituted
  
• ECB's Makuch we have positive impressions that QE is beginning to work alongside other programs, not concerned there may not be enough EZ securities available for QE
  
• ECB's Nouy keeping an eye on aggressive search for yield strategies
  
• Brazil's Levy weaker BRL will help expand exports,  govt needs to moderate expansion of state-run banks, govt needs to stabilize public debt to shield job market, ready to take measures to ensure tax revenues meet '15 fiscal target
  
• Units of Brazil's OAS file for bankruptcy protection amid scandal
  
• China insurance regulator to relax overseas investment rules for Chinese insurance funds
  
• EU President Latvia proposes scrapping ban on prop trading at banks in EU
  
• OPEC's March oil o/p rises 560k bbls/day m/m to 30.63m, highest since Oct
  
• Warren Buffet says Greek exit from EZ may not be a bad thing for the euro (CNBC)

Economic Data Ahead

• (1950 ET/ 2350 GMT) Japan Tankan Big Mf Idx Q1 (consensus 14, previous 12)
  
• (1950 ET/ 2350 GMT) Japan Tankan Big Mf Outlook DI Q1 (consensus 16, previous 9)
  
• (1950 ET/ 2350 GMT) Japan Tankan Big Non-Mf Idx Q1 (consensus 17, previous 16)
  
• (1950 ET/ 2350 GMT) Japan Tankan big non-mf outlook Q1 (consensus 17, previous 15)
  
• (1950 ET/ 2350 GMT) Japan Tankan All Big Capex Est Q1 (consensus 0.5%, previous 8.90%)
  
• (1950 ET/ 2350 GMT) Japan Tankan Small Mf Idx Q1 (consensus 3, previous 1)
  
• (1950 ET/ 2350 GMT) Japan Tankan Sm Mf Outlook DI Q1 (consensus 4, previous -5)
  
• (1950 ET/ 2350 GMT) Japan Tankan Small Non-Mf Idx Q1 (consensus 0, previous -1)
  
• (1950 ET/ 2350 GMT) Japan Tankan sm non-mf outlook Q1 (consensus 0, previous -4)
  
• (1950 ET/ 2350 GMT) Japan Tankan All Sm Capex Est Q1 (consensus -16.5%, previous -6.70%)
  
• (1830 ET/ 2230 GMT) Australia AIG Manufacturing Index Mar (previous 45.4)
  
• (2030 ET/ 0030 GMT) Australia Building Approvals Feb (consensus -4%, previous 7.90%)
  
• (2030 ET/ 0030 GMT) Australia Private House Approvals Feb (previous 0.40%)
  
• (2100 ET/ 0100 GMT) China NBS Non-Mfg PMI Mar (previous 53.9)
  
• (2100 ET/ 0100 GMT) China NBS Manufacturing PMI Mar (consensus 49.7, previous 49.9)
  
• (2145 ET/ 0145 GMT) China HSBC Mfg PMI Final Mar (previous 49.2)
  

Key Events Ahead 

• No Significant Events
  

FX Recap

USD/JPY failed to sustain gains above the 120.00 level. The pair found resistance at a session high of 120.14 and pulled back before being contained by the 119.80 area. Over the last hours USD/JPY has been trading in a narrow range. Currently the pair is trading at 119.90, recording a 0.19% loss on the day. Immediate support levels are at 119.80, 119.40 and 119.00, while she sees resistances at 120.45, 120.80 and 121.20. Option expiries Wednesday 1st April: 119.50-55 (617M). NB - 2.6BLN 120'S EXPIRE THURSDAY

EUR/USD remains entrenched into the negative territory during the first half of the week. Lack of progress on Greek debt talks weighing on sentiment. Towards the close of the NA session the pair seems to have been stabilizing around the mid-1.0700s. Currently the pair is trading at 1.0744, down 0.80% on the day.  EZ final March manufacturing PMIs along with US with the ADP report and the ISM Manufacturing in focus tomorrow. Immediate support lies at 1.0700 followed by 1.0688 and finally 1.0618. Resistances are at 1.0833, 1.0860 and then 1.0900.

GBP/USD: The pound is outperforming its G10 peers with the exception of the US dollar. The pair managed to regain the 1.4800 handle and advanced to session tops near 1.4870 after finding bids around 1.4760. At the moment the pair is trading at 1.4852, up 0.28%. Next hurdle is at 1.4901 (high ) followed by 1.4923 (high ) and finally 1.5000. On the downside, supports lie at 1.4752, 1.4722 and then 1.4689.



AUD/USD: AUD remains on the back foot on Tuesday. AUD/USD extending losses into a sixth day in a row amid broad greenback strength. The pair fell briefly below 0.7600 and hit a 2-week low of 0.7590 earlier on the day. Aussie remains pressurised by low commodity prices and speculations the RBA might cut for second time this year. Supports lie at 0.7585, 0.7567 and 0.7548, while on the flipside resiatances are 0.7702, 0.7721 and 0.7740. Option expiries Wednesday 1st April: 0.7640-50 (1BLN), 0.7600-05 (360M)

FED watchers’ dashboard

FOMC participants has now set themselves on a crucial Journey this year - When to do the first rate hike and how much?

• According to the latest update FED might hike rates over any meeting except April, 2015.

Individual voting member's opinions would be vital to assess the rate path. June and September are the major contenders so far. Treasury yield is voting for September.
Following board will get updated time to time -
This year's Member include

Voting Member	Views so far	Recent Change/Stance
Janet L. Yellen, Board of Governors, Chair	Gradual Rate hike starting this year. Worried about Secular Stagnation, slowdown in economy due to external factors.	Very hawkish to Mild hawkish
William C. Dudley, New York, Vice Chairman	Worried over regulatory aspects and bad assets in banks	Neutral
Lael Brainard, Board of Governors	Focus on financial stability and regulatory watch	Neutral cautious
Charles L. Evans, Chicago	No rate hike in 2016 Worried over weakness in economy and strong dollar	Very dovish
Stanley Fischer, Board of Governors	Likely will be warranted by end of 2015	Mild hawkish to Neutral, mild dovish
Jeffrey M. Lacker, Richmond	June rate hike still possible	Very hawkish
Dennis P. Lockhart, Atlanta	Rate hike after June but at least once this year	Hawkish
Jerome H. Powell, Board of Governors	Focus is more on regulatory aspects and financial stability	Neutral
Daniel K. Tarullo, Board of Governors	Focuses over banking regulation and worried over weaker rates fueled risk taking	Neutral to hawkish
John C. Williams, San Francisco	Confident over economic prospects especially labor market	Hawkish

Guide to today’s important data and events

Lots of economic dockets to be released today on both side of Atlantic.

Data released so far -

• Australia - New home sales increased 1.1% mom in February. Private sector credit grew by 6.2% YoY and 0.5% mom in February.
  
• New Zealand - ANZ business confidence came at 35.8, higher than prior 34.4 in March. M3 money supply grew at 6.6% YoY in February.
  
• Japan - Vehicle production fell by -5.3% in February YoY. Housing starts fell by -3.1% YoY in February. Construction orders grew at much slower pace of 1% compared to prior 27.5% YoY in February.
  
• Germany - Retails sales grew at 3.6% YoY in February and -0.5% mom.
  
• France - French economic dockets continue to pose weakness. Consumer spending grew by 0.1% mom in February. Producer prices grew by 0.7%.
   
• Spain - Retail sales grew at 2.7% YoY in February.

Upcoming -

• Germany - Unemployment details scheduled at 7:55 GMT.

• Italy - Unemployment rate is scheduled for release at 8:00 GMT. CPI and PPI will be released at 9:00 GMT and 10:00 GMT respectively.

• Spain - Current account balance to be released at 8:00 GMT.

• UK - Current account balance along with fourth quarter GDP will be published at 8:30 GMT. Weaker docket would be very bearish for pound.

• Euro zone - Consumer price index and unemployment rates are scheduled for release at 9:00 GMT. G7 meeting to be held today. Topic would include Iran Deal, Euro zone crisis and Russian sanctions.

• Greece - Retail sales to be released at 9:00 GMT. Previous reading was -1.2%. Vital to watch if situation is stabilizing or not.

• Germany - Consumer Price Index to be released at 12:00 GMT. Inflation is expected in positive territory. Weaker figures might put downside pressure on Euro and German yields.

• Canada - MoM GDP will be published at 12:30 GMT.

• US - S&P case Shiller home price indices to be released for January at 13:00 GMT. Chicago PMI to be released at 13:45 GMT followed by consumer confidence at 14:00 GMT. Three FED speakers are scheduled today, Lockhart at 12:50 GMT, followed by Mester at 13:00 GMT and George at 19:00 GMT.

• Australia - AIG performance manufacturing index scheduled for release at 23:30 GMT.

• Japan - Tankan manufacturing details will be released at 23:50 GMT.

• Auctions - US will auction 1 month and 12 month bills around 15:30 GMT.

UK current account narrows on improving trade account

The component of the UK current account that has driven the blowout in the balance in the last three years has been the massive deterioration in the net property income component. This is the return on UK investment abroad net of the return on foreign investment in the UK.

The deterioration is the result of the strong outperformance of the UK in that period relative to the euro area which has led to higher investment in the UK and higher returns on that investment.

With the UK outperformance continuing, it is unlikely that the trend in this component will have improved significantly in Q4 14.

According to Societe Generale it is highly volatile and so the published deficit on this part could easily have narrowed a little. On top of that, the trade deficit fell by £3bn in Q4 so overall the current account deficit is expected to have been cut from £27bn to £22bn.

Euro area March flash HICP inflation to print at -0.1% yoy

Eurostat reported that annual inflation in the euro area was -0.3% yoy in February 2015, up from -0.6% in January.

The largest upward impacts to euro area annual inflation came from restaurants & cafés (+0.12 percentage points), rents (+0.11 pp) and tobacco (+0.07 pp), while fuels for transport (-0.64 pp), heating oil (-0.19 pp) and telecommunications (-0.06 pp) had the biggest downward impacts.

For the March flash reading, the energy component is likely to continue its mild rebound as prices at the pump continue to rise, while the food component should also provide some upward pressure to the headline number.

Services- and goods price rises should peter out a bit which should lead to a lower core figure.

"We expect HICP inflation to average around 0.1% in 2015 and 1.3% in 2016 while the core gauge should average 0.7% in 2015 and 1.0% in 2016", said Societe Generale in a report on Tuesday. 

China bulls beat stock markets around world

Chinese stock market is enjoying one of the best years so far. It is turning out to be year of the bull not goat for stock market. CSI rallied to new 7 year high to 3786. The index is up more than 2.5% today.

• Central bank's favorable comments over possibilities of further policy easing might have fueled today's aggressive movement. The stock index is rallying since March 8 and has closed in negative only one day since then.
  
  
• According some analyst, the market is still cheaper as it is trading at forward PE of 15, compared to a 10 year average of 17.5.

CSI 300 has gained just about 17% so far this year and more than 85% in last 1 year. However foreign investors have been pulling out billions of dollar out of Chinese stock markets for quite some time now.

• Buying frenzy has hit all segments of the market. As shown in the chart Chinese property stocks. Property market has been in trouble for quite some time now. Investors seem to be paying no heed over that so far, when it comes to stocks.
  
  
• Shenzhen composite index is up more than 37% this year.

Today, Peoples Bank of China (PBOC) eases mortgage policy, lowered second home down payment to 40%.

• Chart shows, housing stocks reached a six year high today, further rise is expected as PBOC eased mortgage policy.

Chinese stocks might get further boost from easing by Central bank, however investors should remain cautious over this aggressive speculation.

US personal spending to post a modest gain

After two sequential declines, personal consumption expenditures likely increased by 0.3% mom in February.

Societe Generale forecasts  for a modest increase reflects a tug of war between disappointing retail activity during the reference period, balanced by higher spending at gasoline stations and by stronger demand for utilities driven by unusually low temperatures.

"After adjusting for inflation, real PCE likely increased by 0.2% mom. Our forecast would putreal expenditures during the Jan-Feb span 2.3% annualized above the Q4 average. In order tohit our 3.2% published forecast for Q2 PCE, real spending would have to increase by 0.6%mom in March", says Societe Generale.

While ambitious, this is not unrealistic given the strong labor market backdrop and the added boost to real disposable income from lower energy prices which has yet to be spent.

US labor market to show further improvement in March

The Bureau of Labor Statistics' (BLS) update on the employment situation is expected to show that labor market conditions improved further in March. A low level of persons filing initial claims for unemployment insurance during the reference period, combined with a decline in the total number of persons collecting unemployment benefits, suggests that nonfarm payrolls to expanded by 272,000 in March.

According to Societe Generale this would mark only a modest slowdown from the 295,000 jobs created in February and it would roughly match the reported YTD average of 267,000. Their in-sample estimates also suggests that previously reported data is likely to revised higher by a total of 75,000k.

The erosion in labor market slack likely paused in March with the unemployment rate expected to hold steady at 5.5% after declining by 0.2% in February. With the February canvassing period terminating before the 15th of the month, the closely followed nominal compensation measure probably edged just 0.2% higher last month, keeping its year-to-year growth rate unchanged at 2.0%. The mean work span of all employees is expected to hold steady at 34.6 hours.

Manufacturing ISM Index US Increase Slightly

The US manufacturing ISM index is expected to show that manufacturing activity quickened very  modestly in February. Roughly one point increase is expected in the index from 52.9 to 53.8. Data on  manufacturing trends released to date offers a mixed picture.

The Empire and Philly Fed surveys were down slightly, however their components pointed to a slight improvement in conditions. Activity reportedly contracted in the Richmond Fed district; however the national Markit PMI posted its highest reading since October.

"Manufacturing activity improved modestly in  March driven by better weather and to some extent by the reopening of West Coast ports. Our  forecast, if realized, would be consistent with real GDP expanding at an annualized clip of about 2.5% in Q1", said Societe Generale in a report on Monday.

Guide to today’s important data and events

Today data and event risks are moderate across board. Focus is on US.
Data released so far -

• Switzerland - KOF leading indicator rose to 90.8 from previous 90.3, much better than expected 89.1.

Upcoming -

• UK - Lending details along with M4 money supply to be released at 8:30 GMT. Previous consumer for January was £0.817 billion. Mortgage approvals in February will be published along. GFK consumer confidence will be released at 23:05 GMT.

• Italy - Consumer and Business confidence are scheduled for release at 9:00 GMT.

• Euro zone - Confidence data consumer, economic sentiment, industrial confidence, services sentiment all scheduled to be released at 9:00 GMT. Improved dockets would keep the mood of investors buoyant towards European equities.

• Greece - Producer price index to be released at 9:00 GMT. Previous reading was -9.6%. Vital to watch if situation is stabilizing or not.

• Germany - Consumer Price Index to be released at 12:00 GMT. Inflation is expected in positive territory. Weaker figures might put downside pressure on Euro and German yields.

• Canada - Two inflationary gauge like industrial product price and raw material price index to be released at 12:30 GMT.

• US - High impact data and events are scheduled for release from US. Personal consumption expenditure price index along with personal income and spending to be released at 12:30 GMT. Pending Home sales will be released at 14:00 GMT followed by Dallas Fed Manufacturing business index at 14:30 GMT.

• New Zealand - Building permits to be released at 21:45 GMT. Housing sector is showing weakness, previous release showed -3.8% contraction in January.

• Auctions - US will auction 3 month and 6 month bills around 15:30 GMT.

Germany – strongman of Europe Commentary

The latest data coming out of Germany has remained very positive.

Germany is enjoying current account surplus at 7.5% of the GDP, surplus is highest in the Euro zone (+€200 billion, non-seasonally adjusted, GDP growing at 1.6% YoY.

Today's Zew survey data affirmed the same as the Economic sentiment bounced back to 53 level, consecutive rise since it made low of -3.6 on October 2014. Sentiment for current situation improved to 45.5 far better than average market estimate of 3.2.

We believe this to have muted impact for the Euro, currently sub 1.14 in the event of current situation and even the immediate impact also was less market moving.

Simultaneously such positive data makes up pretty positive on German equity, DAX (currently just below 10, 900) in the coming days and bunds to outperform (10 year yield at 53 basis points). They look a lot cheaper at this euro valuation.