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Sunday, February 7

7th Feb: Weekly Support

Here are the links to the weekly roundups, reviews and also previews of the beginning week. Last week’s post is here.  

Previously on MoreLiver’s:

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Weekly ScoreboardBetween The Hedges

Tyler’s Weekly Market WrapZH

Succinct summation of week’s eventsThe Big Picture

US Schedule for WeekBill McBride

Economic CalendarBerenberg

Week AheadZH

Janet Yellen Testifies, China Closed

5 Things to Watch on the Economic CalendarWSJ

EU Week Ahead – WSJ

Week AheadBB

Wall St Week AheadReuters

Weighing the Week AheadDash of Insight
The economic calendar is light and it is the start of the week-long Chinese New Year. This means some media time and space that must be filled. Needing an attention-getter, I expect the punditry to be asking: Is a recession looming?

EcoWeek: High strungBNP Paribas
US: Expectations for additional Fed rate increases have evaporated. The drop-off in bond yields is widespread and the latest victim to date is the dollar. Is the US economy really in such bad shape? * EZ: The decline in oil prices becomes problematic for price stability when it triggers second-round effects, i.e. a lasting change in the expectations and behaviour of economic agents. * UK: Donald Tusk unveiled his proposals for a deal between the UK and the EU. This basis for additional negotiations was relatively well received, but negotiations continue. If an agreement were to reached at the mid-February EU Summit, a date for the referendum could be announced early in March. June 23rd is a possibility but not a certainty. * Saudi Arabia: The drop in oil prices highlights the crisis of the Saudi rent-economy. Only an acceleration in reforms could limit risks.

Weekly Market OutlookMoody’s

Week Ahead: Yellen sets the scene Nordea
Next week sees Fed Chair Yellen give her semi-annual monetary policy testimony before Congress (Wed, Thu). In the Euro Area, we expect a 0.3% q/q increase in GDP for Q4 (Fri) and no signs of accelerating growth. As China celebrates its New Year, the only data release will be FX reserves (Sun), which we expect to show a record-high monthly drop. In Scandinavia, Riksbank is likely to cut rates by 10 bp (Thu), while Denmark and Norway will release January inflation figures (Wed).

Weekly FocusDanske Bank
Riksbank’s time to ease, as we expect a repo rate cut by at least 10bp to -0.45% or more * First time we hear Yellen since the initial rate hike in December * China releases FX reserves figures on Sunday and we look for another decline of more than USD100bn, reflecting substantial intervention. Pressure on the CNY picked up significantly in January.

Weekly Strategy: Crumbling faith in central banksDanske Bank
This week has seen further declines in inflation expectations and interest rates * Concerns about the US economy prompted a sharp fall in the dollar * The fall in inflation expectations raises questions about the central banks’ ability to fulfil their inflation mandates, especially with the policy vacuum until March * Yellen’s testimony on Wednesday will be crucial in providing guidance to market.

Week AheadHandelsbanken
Eurozone: GDP growth slowed by private consumption * Sweden: Riksbank to expand QE * Norway: Core inflation continues to hover around 3.0 percent

FX OutlookMarc Chandler
Dollar Beaten Back but Cynicism is Unwarranted

FX PositioningMarc Chandler
Big Position Adjustment for Euro, Smaller for Yen

FX 4 Next Week TF
A traumatic week and a roller coaster rid for USD * Sustainability of NFP boost for USD and Yellen in focus next week * Big draw on Chinese reserves could spark risk aversion anew * Will markets focus on US data or global macro considerations?

Weekly Market SummaryThe Fat Pitch
NDX undercut its January low this week, and Friday's sell off was extreme enough that it is unlikely to mark the low. Negative investor sentiment seems to be feeding on itself, with sell offs leading to historic fund outflows and further sell offs. These extremes have reached a point where they most often reverse. Even if US equities are in a bear market, a rally of 7-10% is likely close at hand. Importantly, there has been no price action that yet suggests a reversal in the short-term trend.