By Samir Al Khoury,
The most important events of the past week
United States of America
·        The services PMI recorded a growth of 52.3 points, which was higher than expectations (51.3) but lower than the previous reading (52.5).
·       The non-manufacturing purchasing managers index issued by the Institute for Supply Management (ISM) declined, recording growth of 52.6 points, which is lower than expectations (53.0) and the previous reading (53.4).
·       The factory orders index declined on a monthly basis, recording a contraction of 3.6%, which is lower than expectations (-3.1%) and the previous reading (-0.3%).
·       The index of change in non-farm private sector jobs issued by ADP recorded 140K jobs, which is lower than expectations (149K) but higher than the previous reading (111K).
·       The job opportunities index recorded 8.86 million, which exceeded expectations (8.80M) but lower than the previous reading (8.89M).
·       US crude oil inventories rose by 1.37 million barrels, which is lower than expectations (2.40M) and the previous reading (4.20M).
·       The initial jobless claims index recorded 217K, a percentage that was in line with expectations and the previous reading.
·       The non-farm payrolls (NFP) report index rose, recording 275K new jobs, a rate that exceeded expectations (198K) and the previous reading (229K).
·       The unemployment rate rose to 3.9%, which exceeded expectations and the previous reading (3.7%).
·       The average hourly wage index recorded 4.3% on an annual basis, which is lower than expectations and the previous reading (4.4%).
Eurozone
·       The European Central Bank decided to keep interest rates unchanged, keeping the key interest rate at 4.50%, in line with market expectations.
·       The Services Purchasing Managers’ Index rose, registering a growth of 50.2 points, a rate that exceeded expectations (50.0) and the previous reading (48.4).
·       The monthly retail sales index recorded a growth of 0.1%, which is in line with expectations but higher than the previous reading (-0.6%).
·       The GDP index on an annual basis (fourth quarter) recorded a growth of 0.1%, a percentage that was in line with expectations and the previous reading.
United Kingdom
·       The Services Purchasing Managers’ Index declined, recording a growth of 53.8 points, which is lower than expectations and the previous reading (54.3).
·       The Construction Purchasing Managers’ Index rose, recording a contraction of 49.7 points, a percentage that exceeded expectations (49.0) and the previous reading (48.8).
Switzerland
·       The Consumer Price Index recorded an annual rate of 1.2%, which exceeded expectations (1.1%) but was lower than the previous reading (1.3%).
Canada
·       The Central Bank of Canada decided to keep interest rates unchanged, with the main interest rate remaining at 5.00%, in line with market expectations.
·       The Ivey Purchasing Managers’ Index fell to 53.9 points, which is lower than the previous reading (56.5).
·       The building permits index rose by 13.5%, which exceeded expectations (4.6%) and the previous reading (-11.5%).
·       The unemployment rate was 5.8%, which was in line with expectations but exceeded the previous reading (5.7%).
·       The rate of change in employment increased, recording 40.7K new jobs, which is a rate that exceeded expectations (21.1K) and the previous reading (37.3K).
Australia
·       The building permits index rose by 10.0%, which exceeded expectations (-2.00%) and the previous reading (-1.70%).
·       The Services Purchasing Managers’ Index rose, recording a growth of 53.1 points, which exceeded expectations (52.8) and the previous reading (49.1).
·       The GDP index on an annual basis (fourth quarter) recorded 1.5%, which is higher than expectations (1.4%) and lower than the previous reading (2.1%).
·       The retail sales index recorded on a monthly basis 1.1%, which is in line with expectations but lower than the previous reading (-2.1%).
China
·       The Caixin Services Purchasing Managers’ Index declined, recording a growth of 52.5 points, which is lower than expectations (52.9) and the previous reading (52.7).
·       The export index rose by 7.1%, which exceeded expectations (1.9%) and the previous reading (2.3%).
·       The import index rose by 3.5%, which exceeded expectations (1.5%) and the previous reading (0.2%).
·       China’s foreign exchange reserves increased, recording 3.226 trillion US dollars, a rate that exceeded expectations (3.205T) and the previous reading (3.219T).
·       The Consumer Price Index rose on an annual basis, registering a growth of 0.7%, which exceeded expectations (0.3%) and the previous reading (-0.8%).
·       The producer price index declined on an annual basis, recording a contraction of 2.7%, which is lower than expectations and the previous reading (-2.5%).
Japan
·       The services PMI recorded a growth of 52.9 points, which was higher than expectations (52.5) but lower than the previous reading (53.1).
The most important events of this week
This week, financial markets are eagerly awaiting the release of several key economic indicators:
·       The Building Permits Index in Australia and the Consumer Price Index in Switzerland are released today.
·       On Tuesday, the markets are awaiting the services PMI in Australia, Japan, the Eurozone, Britain, and the United States of America, the consumer price index in Tokyo, Japan, the services PMI from Caixin in China, and the factory orders and non-manufacturing purchasing managers indexes issued by the Institute for Supply Management (ISM) in the United States of America.
·       As for Wednesday, the markets are awaiting the interest rate decision issued by the Central Bank of Canada, amid expectations that it will keep interest rates unchanged at the level of 5.00%. Markets are also awaiting the testimony of US Federal Reserve Chairman Jerome Powell.
It issues indices of GDP and retail sales in Australia, the construction PMI in Britain, retail sales in the Eurozone, the Ivey Purchasing Managers’ Index in Canada, indices of change in non-farm private sector jobs issued by ADP, job opportunities, and US crude oil inventories in the United States of America.
·       Regarding Thursday, the markets are awaiting the interest decision issued by the European Central Bank, amid expectations that it will keep interest rates unchanged at the level of 4.50%. Attention is turning to the speech and tone of European Central Bank President Christine Lagarde regarding the interest rate path in the next stage. Markets are also awaiting the testimony of US Federal Reserve Chairman Jerome Powell. It issues indicators of exports, imports, foreign exchange reserves in China, the unemployment rate in Switzerland, initial jobless claims in the United States of America, and building permits in Canada.
·       Finally, on Friday, the Eurozone’s gross domestic product, non-farm payrolls report, the unemployment rate, and average hourly wages indicators in the United States of America will be released, in addition to the rates of change in employment and unemployment in Canada.
Technical Analysis:
EUR/USD:
If the euro against the dollar breaks the pivot point of 1.0915, it may potentially target and test the support levels of 1.0850, 1.0763, and 1.0698. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.1001, 1.1066, and 1.1152.
GBP/USD:
If the pound against the dollar breaks the pivot point of 1.2795, it has the potential to test the support levels of 1.2697, 1.2545, and 1.2447. However, if it exceeds the pivot point, it may test resistance levels of 1.2948, 1.3046, and 1.3198.
USD/JPY:
If the pivot point of 148.02 is broken for the dollar against the yen, there is a possibility that it will target the support levels 145.49, 143.94, and 141.40. But if it exceeds the pivot point, it is likely to target the resistance levels 149.58, 152.11, and 153.67.
GOLD:
If the pivot point of 2158 is broken for gold, there is a possibility that it will target the support levels 2114, 2043, and 2000. But if it exceeds the pivot point, it is likely to target the resistance levels 2229, 2273, and 2344.
BRENT CRUDE OIL:
If the pivot point of 82.62 for crude oil is broken, there is a possibility that it will target the support levels of 81.16, 80.25 and 78.79. If it exceeds the pivot point, it is likely to target the resistance levels 83.53, 85.00, and 85.90.
US30:
If the pivot point of 39,025 for the Dow is broken, there is a possibility that it will target the support levels 38,804, 38,521 and 38,300. If it exceeds the pivot point, it is likely to target the resistance levels 39,308, 39,529, and 39,812.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
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