ENHO KUO
  • Photos
  • Media
  • Contact
  • Journal
youtube
​
Last week
  • Fundamental Datas
  • Sentimental Events


Last week we started the market with extremely emotions from PM May’s speech from the pessimistic anticpations to optimistic realization, GBP went to historical low only to climb up 3%-4%. This is a very typical buy rumour sell fact phenomenal, and we still don’t have a clear direction for the future of GBP. 

UK also released higher than expected CPI to signal the inflation has picked up faster than expected since Brexit and the effect of weak GBP might slowly sink in. 

The labour market of UK is still strong by the datas, but lower hiring might also showed the early sign of worry after Brexit from employers. 

Another notable event was BOC press conference, although the interest rate was kept unchanged, the rate cut possibility was once again back on table with BOC emphasized on the uncertainty around NAFTA with U.S.

CAD also released a very negative CPI, Retail sales and Core CPI and retail sales numbers on Friday to further cause a selling in CAD. The only hope now is the higher oil price or the better outcome of the trade deal with U.S. 

ECB also kept rate unchanged but with a dovish tone to reassure their determination for the low rate easing environment regardless of the higher inflations in most European countries. 

Finally Donald Trump took office with inauguration on Friday, the market had little reaction with still strong equities, bonds and USD but significant weaken in comparison to last year. The uncertainty for his future policies has reflected in investors.

GDT price was better than last week, while AUD also released mixed employment datas with better employment changes but worse unemployment rate from higher participation rate. 

Overall both AUD & NZD are still well supported by the GDP data from China last week which was higher than expected. However, the debt issue still shadow the outlook for China. 




Current updates 
  • EUR (fundamentally bear & sentimentally bull)
-ECB determined to keep easing market which although unsatisfied by many European countries as inflation rose in all Eurozone countries but was largely due to higher energy price. The recovery is still weak. 
  • USD (fundamentally bull & sentimentally bear)
-yield continued to rise, Yellen’s outlook remained the same, inauguration did not cause too much volatility and long-term perspective still bullish but watch out for short-term sentiment ups/downs.
  • GBP (fundamentally bear & sentimentally bull)
-banks are sure to lose single passport into EU, automaker market also faced challenge without single market. 
UK inflation hit 2 years high in December. Ongoing inflation from weak currency might slowly effect the consumption noted by weak retail sales and lower job participation as hiring pause showed the producers’ worries for 2017
Higher inflation will squeeze household spending hence weaken economy.

  • CAD (fundamentally neutral & sentimentally bear)
-OPEC tried to inject positive sentiment into oil market which is expected to at least rise to $60 per barrell, disappointed datas from Friday alone with the renegotiation of NAFTA put Canada at vulnerable position. The oil market can support CAD but the biggest risk is relation with U.S. 
  • AUD (fundamentally neutral & sentimentally bull)
-The employment datas did not provide too much insight last week, but the overall positive Chinese GDP has supported the AUD economy outlook and as for now, because of the uncertainty of USD, AUD still remain strong. 
-
  • NZD (fundamentally neutral & sentimentally bull)
-NZD is in the same position as AUD but with less speculation and S&P affirmed status has also helped NZD to gain better momentum than AUD. We will expect NZD to remain stronger than AUD. 
  • JPY (fundamentally bear & sentimentally neutral)
-JPY was absence from most headlines last week but had large volatility due to risk events from UK, EURO & USA. Yen will be expected to continue acting as safe heaven and will have large movement when market is anticipating large risk events. 
  • CHF (fundamentally bear & sentimentally neutral)
-CHF is in the same position as JPY but with less speculations, still weak economically and the low rate environment is also going to be there for quiet some time. 

Week ahead
  • Fundamental Datas
  • Sentimental Events


Monday we have ECB Draghi speaks again at Asian session. We will also have Flash Manufacturing PMI from Japan. 

Tuesday we have Flash Manufacturing PMI and Service PMI from France, Germany and Euro. 

The big event of High Court Ruling from UK is also coming out. Although the result is expected to be in favour for the parliament and PM May has already stated that Brexit will go through Parliament, still this event can cause another extreme emotions of positivity to negativity to boost GBP up or drag it down. 

We also have CPI datas from AUD later in Asian session which will cause volatility for AUD with a beat or upset result. 

Many economists are quiet bearish for the economic outlook for Australia as their economy did shrink in 2016, but the current bull trend of commodities certainly helps AUD, on top of that, the current negative sentiment of USD has also put AUD in a rising star in 2017 so far. This event will show the true colour of AUD and will either help it to go up further or put it back in its place. 

Wednesday we have Crude oil inventories coming out as over the weekend we had another positive news from OPEC as they have already met 80% of their target in January, however, last Crude inventories were a disappointment and contradicted to the positive sentiment of OPEC. We will see whether we can have an concurrent direction for this week in the oil market both fundamentally and sentimentally. 

NZD will release CPI q/q which is expected to be positive, again if the data is positive, then NZD will enjoy the continuation of the uptrend but vise-versa, an upset will certainty pressure it down as it has been up for many days. 

Thursday the prelim GDP will be out from UK which alone with the High Court Ruling on Tuesday, we might have a strong rally or strong selling if the GDP is in line with the sentiment. 

Friday will see the advance GDP from U.S which again will either be in line with the sentiment or not. 


Weekly Technical Analysis 
7 Days Technical Analysis 



©Enho Kuo 2020

  • Photos
  • Media
  • Contact
  • Journal