Last week saw the release of major economic data in the United States. The Consumer Price Index (CPI) rose by 3.0% year-on-year, surpassing expectations, while the Producer Price Index (PPI) grew by 3.5%. On the other hand, retail sales fell by 0.9%, marking the largest decline since March 2023, impacted by severe weather conditions and the Los Angeles wildfires. Core retail sales also dropped by 0.4%. In contrast, industrial production increased by 0.5%. Additionally, jobless claims improved to 213,000, below expectations, indicating continued labor market strength. Moreover, U.S. crude oil inventories rose by 4.07 million barrels, exceeding forecasts. In the Eurozone, GDP grew by 0.1%, while industrial production contracted by 1.1%. In the UK, GDP expanded by 0.1%, and industrial production increased by 0.5%. In Switzerland, inflation reached 0.4%, in line with expectations. In Japan, the Producer Price Index grew by 4.2%. Meanwhile, China witnessed a significant surge in new loans, reaching 5,130 billion yuan, signaling intensified stimulus efforts to revive the economy.
Market Analysis
USD/CHF
The U.S. dollar weakened against the Swiss franc, reaching 0.8971 on Friday and currently hovering near 0.9000 due to weak U.S. retail sales, which negatively impacted the dollar against major currencies. However, recent Swiss economic data indicate ongoing weakness, with the PMI declining to its lowest level since July last year and the unemployment rate rising to 3.0%. The RSI currently stands at 41, indicating bearish momentum for the USD/CHF pair. Meanwhile, the MACD shows a bearish crossover, with the blue MACD line crossing below the orange Signal Line, reinforcing downward pressure on the U.S. dollar against the Swiss franc.
Walmart
Walmart’s stock has surged by approximately 15% since the start of the year. Markets are eagerly awaiting the company’s earnings release on Thursday, February 20, 2025. Analysts expect earnings per share (EPS) of $0.64, down from the previous reading of $1.80. Revenue is projected to reach $179.8 billion, up from $173.4 billion in the previous report. The RSI currently stands at 71, indicating an overbought condition, which suggests continued bullish momentum for Walmart’s stock.
Crude Oil
Crude oil prices declined to $74.50 on Friday, February 14, after reaching $77.25 on February 11. Oil prices are currently trading below $75.00, amid uncertainty in the oil market driven by mixed factors. On the positive side, OPEC+ extended voluntary production cuts of 2.2 million barrels per day until the end of March this year. Additionally, China, the world’s largest oil importer, is expected to implement new stimulus measures to boost its economy. However, several factors are limiting oil’s upward movement, including rising U.S. crude inventories and discussions surrounding a potential end to the Russia-Ukraine war, particularly with former President Donald Trump’s mediation efforts. The RSI is currently at 43, indicating bearish momentum in oil prices. Furthermore, the MACD suggests continued downside momentum as the blue MACD line remains below the orange Signal Line.
CAC40 Index
The CAC40 index has gained approximately 11% since the beginning of the year. This positive momentum is expected to continue, primarily driven by the European Central Bank’s (ECB) ongoing interest rate cuts, which support European equities. The RSI currently stands at 77, indicating an overbought condition and strong bullish momentum for the CAC40. Additionally, the MACD shows a bullish crossover, with the blue MACD line crossing above the orange Signal Line, reinforcing the positive outlook for the index.
Key Events This Week
Markets are anticipating several important economic indicators and events this week:
- Monday: Japan’s GDP and industrial production figures will be released.
- Tuesday: The Reserve Bank of Australia (RBA) interest rate decision is expected, with markets forecasting a 25-basis-point cut from 4.35% to 4.10%. Other key releases include UK average earnings and unemployment rate, the Empire State Manufacturing Index in New York, and Canada’s CPI.
- Wednesday: The Reserve Bank of New Zealand’s (RBNZ) interest rate decision is due, with expectations of a 50-basis-point cut from 4.25% to 3.75%. Additionally, the U.S. Federal Open Market Committee (FOMC) meeting minutes will be released. Other key data include Japan’s import and export figures, China’s housing price index, the UK’s CPI, and U.S. building permits data.
- Thursday: Australia’s employment and unemployment rate data will be released, along with China’s prime loan rate decision. In the U.S., key releases include the Philadelphia Fed Manufacturing Index and jobless claims.
- Friday: Markets will focus on Manufacturing and Services PMI data from Australia, Japan, the UK, the Eurozone, and the U.S. Other important data include Japan’s CPI, retail sales in the UK and Canada, U.S. existing home sales, and the Michigan Consumer Sentiment Index.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
