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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on Twitter
LAST WEEK
Draghi-Dip-Buyers
Send Stocks, Crude To 2016 Highs; Gold Slammed
NEXT WEEK
US
Schedule for Week – Bill
McBride
Week
Ahead – ZH
Migration,
EU Summit, Tax Rulings
Fed,
BOE, Delegate Bounty, U.S. Housing
As
market rallies back, investors turn eyes to the Fed
Weighing
the Week Ahead – Dash of Insight
Eurozone The ECB hits hard:
ECB unveiled new easing measures and placed emphasis on unconventional tools. While
the European Commission dithers, Draghi gets out the big guns. The sense of
urgency is not the same in Brussels and Frankfurt. US Risk management: The latest economic indicators are mostly well
oriented and financial markets are calmer, a mix that looks like opening the
window for the Fed to hike. Still, data-dependency is also about the outlook,
and, in the end, the decision lies in FOMC members’ appraisal of risks.
The
week ahead sees central banks steal the spotlight with the Fed, BoE, BoJ and
SNB announcing interest rates just as the markets digest the recent ECB policy
changes. Focus will be on the FOMC meeting (Wed). We anticipate a wait-and-see
attitude with the April and June meetings kept in play for a rate hike. Expect
BoE, BoJ and SNB to all keep monetary policy on hold. Finally, remember to keep
an eye on the US inflation figures, also released Wednesday.
The
ECB delivered another set of measures to stimulate growth and push up
inflation. The debate about whether the ECB is on the right track is getting
increasingly polarised. We must bear in mind that this is an experiment never
seen before. The outcome is uncertain. Nevertheless, a lot of the criticism of
ECB policy cannot be supported by evidence. We think the latest set of measures
will have a positive impact on the eurozone economy. January data on industrial
production in various eurozone countries has been better than expected. This
was also the case in the US, suggesting business conditions in the industrial
sector are improving.
Fed
unlikely to change interest rates but may signal more rate hikes are on the way
than the market currently expects * BoE unlikely to move on rates, signalling
less haste than the US about getting started * Norges Bank to cut 0.25%
percentage points due to a slowingEconomy
* Chinese industrial production growth to pick up this year, although may not
be apparent in the February number * Swedish inflation and labour market data
could be on the strong side and lead to a stronger SEK.
The
ECB has shifted from targeting the exchange rate to supporting the credit/bank
lending
channel
* The ECB’s policy shift is sensible as negative rates do not appear to have
fuelled bank lending, but it remains to be seen how successful the new measures
will be * The ECB’s measures are positive for risky assets, particularly equity
and credit markets * The ECB’s policy shift supports our long-held view that
EUR/USD will head higher in 2016 * The menu of easing measures supports flatter
curves in core euro FI.
China:
Bracing for the continued slowdown * Sweden: Higher inflation and unchanged
unemployment rate in February * Norway: Norges Bank to cut its policy rate
ECB
delivers but Draghi’s comments push the euro higher. The focus now turns to the
Fed and BoJ meetings next week. Stakes are high for the BoJ. AUD and CAD rally;
NZD slumps.
Speculative
Positioning –
Marc
Chandler
Speculators
Cut Long Sterling Exposure While Adding to Long Aussie
FX Outlook – Marc
Chandler
Greenback's
Tone Sours, Sterling may Shine
Bearish
EURUSD traders could look at options for a longer-term move to 1.06 * Longstanding
soft risk sentiment/low USDJPY trend primed to turn around * EURGBP an option
for traders looking to avoid FOMC volatility in the dollar * NZD downside move
likely in the wake of central bank currency attack
Weekly Market
Summary
– The
Fat Pitch
Equities
rose the fourth week in a row, led by continued strength in oil. SPY has now
rallied 11% and is back above a key support level and its 200-dma. Breadth
momentum during this rebound has been stronger than nearly every bear market
rally in the past 16 years. Moreover, despite the large gains, investors remain
mostly skeptical. Turbulence during the upcoming March OpX week would be
normal, but this week is seasonally bullish. Below, we outline what to look for
before assuming the rally has come to an end.