The most important events of the past week

United States of America

• The Federal Open Market Committee decided to keep the US interest rate unchanged during the month of January, so that the federal funds interest rate would stabilize at levels of 5.25% and 5.50%, in line with market expectations.
• The building permits index rose, recording 1.518 million, which exceeded expectations (1.500M) and the previous reading (1.489M).
• The initial jobless claims declined, recording 210K, which is lower than expectations and the previous reading (212K).
• The Philadelphia Manufacturing Index recorded a growth of 3.2 points, which was higher than expectations (-2.6) but lower than the previous reading (5.2).
• US crude oil inventories decreased, recording 1.952 million barrels, which is lower than expectations (-0.900M) and the previous reading (-1.536M).
• The existing home sales index rose, recording 4.38 million, which exceeded expectations (3.95M) and the previous reading (4.00M).
• The Leading Index rose, recording a growth of 0.1%, which exceeded expectations (-0.1%) and the previous reading (-0.4%).
• The Manufacturing Purchasing Managers’ Index rose, recording a growth of 52.5 points, which exceeded expectations (51.8) and the previous reading (52.2).
• The services Purchasing Managers’ Index (PMI) declined, recording a growth of 51.7 points, which is lower than expectations (52.0) and the previous reading (52.3).

Eurozone

• The headline consumer price index recorded on an annual basis 2.6%, which is in line with expectations but lower than the previous reading (2.8%). The core consumer price index (which excludes food and energy) recorded 3.1% on an annual basis, which is in line with expectations but higher than the previous reading (3.3%).
• The Manufacturing PMI declined, recording a contraction of 45.7 points, which is lower than expectations (47.0) and the previous reading (46.5).
• The services Purchasing Managers’ Index (PMI) rose, recording a growth of 51.1 points, a percentage that exceeded expectations (50.5) and the previous reading (50.2).

United Kingdom

• The headline consumer price index fell by 3.4% on an annual basis, which is lower than expectations (3.5%) and the previous reading (4.0%). The core CPI (which excludes food and energy) recorded 4.5% on an annual basis, which is lower than expectations (4.6%) and the previous reading (5.1%).
• The Manufacturing Purchasing Managers’ Index rose, recording a contraction of 49.9 points, which is a percentage that exceeded expectations (47.9) and the previous reading (47.5).
• The Services Purchasing Managers’ Index declined, recording a growth of 53.4 points, which is lower than expectations and the previous reading (53.8).
• The retail sales index recorded 0% on a monthly basis, which was higher than expectations (-0.4%) but lower than the previous reading (3.6%).

Switzerland

• The Swiss National Bank decided to surprise the markets by reducing the interest rate by 25 basis points to the level of 1.50%, which was contrary to expectations that indicated keeping the rate at the level of 1.75%.

Canada

• The Consumer Price Index declined on an annual basis, recording 2.8%, which is lower than expectations (3.1%) and the previous reading (2.9%).
• The monthly retail sales index recorded a contraction of 0.3%, which was higher than expectations (-0.4%) but lower than the previous reading (0.9%).

Australia

• The Reserve Bank of Australia decided to keep the main interest rate on borrowing unchanged at 4.35%, in line with market expectations.
• The Manufacturing Purchasing Managers’ Index declined, recording a contraction of 46.8 points, which is a lower percentage than the previous reading (47.8).
• The services Purchasing Managers’ Index rose, registering a growth of 53.5 points, which is higher than the previous reading (53.1).
• The rate of change in employment increased, recording 116.5K new jobs, a rate that exceeded expectations (39.7K) and the previous reading (15.3K).
• The unemployment rate declined to 3.7%, which is lower than expectations (4.0%) and the previous reading (4.1).

China

• The People’s Bank of China set the 5-year key lending rate at 3.95%, which is in line with expectations and the previous reading.
• The fixed assets investment index rose, recording a growth of 4.2%, which exceeded expectations (3.2%) and the previous reading (3.0%).
• The industrial production index rose on an annual basis, recording a growth of 7.0%, which exceeded expectations (5.3%) and the previous reading (6.8%).
• The retail sales index declined on an annual basis, recording a growth of 5.5%, which is lower than expectations (5.6%) and the previous reading (7.4%).
• The unemployment rate rose to 5.3%, which exceeded expectations and the previous reading (5.1%).

Japan

• The Bank of Japan decided to raise the interest rate from negative -0.1% to the levels of 0.0% and 0.1%, for the first time since 2007.
• The industrial production index on a monthly basis recorded a contraction of 6.7%, which was higher than expectations (-7.5%) but lower than the previous reading (1.2%).
• The export index recorded an annual growth of 7.8%, which was higher than expectations (5.3%) but lower than the previous reading (11.9%).
• The import index recorded an annual growth of 0.5%, which is lower than expectations (2.2%) but higher than the previous reading (-9.8%).
• The Manufacturing Purchasing Managers’ Index rose, recording a contraction of 48.2 points, which is a percentage that exceeded expectations (47.5) and the previous reading (47.2).
• The services Purchasing Managers’ Index rose, recording a growth of 54.9 points, which is higher than the previous reading (52.9).
• The headline consumer price index rose on an annual basis, recording 2.8%, which is higher than the previous reading (2.2%). The core consumer price index (which excludes food) recorded on an annual basis 2.8%, which is in line with expectations but higher than the previous reading (2.0%).

The most important events of this week

This week, financial markets are eagerly awaiting the release of several key economic indicators:

• Building permits and new home sales indices in the United States of America are released today.
• On Tuesday, the markets are awaiting the indicators of orders for durable goods and consumer confidence in the United States of America.
• On Wednesday, the markets are awaiting the consumer confidence index in the Eurozone and the US crude oil inventories index.
• Regarding Thursday, the markets are awaiting the retail sales index in Australia, the GDP in Britain, the GDP indicators, initial jobless claims, Michigan consumer confidence, and pending home sales in the United States of America, in addition to the GDP index in Canada.
• Finally, consumer price indices in Tokyo, Japan, the unemployment rate, industrial production, and retail sales in Japan will be released on Friday, in addition to the price indices for core personal consumption expenditures and personal spending in the United States of America.

Technical Analysis:

EUR/USD: 

If the euro against the dollar breaks the pivot point of 1.0850, it may potentially target and test the support levels of 1.0757, 1.0708, and 1.0616. Conversely, if it surpasses the pivot point, it is likely to test resistance levels of 1.0898, 1.0990, and 1.1039.

GBP/USD: 

The pound against the dollar, if it breaks the pivot point of 1.2658, has the potential to test the support levels of 1.2515, 1.2430, and 1.2287. However, if it exceeds the pivot point, it may test resistance levels of 1.2743, 1.2887, and 1.2971.

USD/JPY: 

If the pivot point of 150.71 is broken for the dollar against the yen, there is a possibility that it will target the support levels 149.58, 147.76, and 146.62. But if it exceeds the pivot point, it is likely to target the resistance levels 152.53, 153.67, and 155.49.

GOLD: 

If the pivot point of 2178 is broken for gold, there is a possibility that it will target the support levels 2131, 2102, and 2054. But if it exceeds the pivot point, it is likely to target the resistance levels 2207, 2254, and 2283.

BRENT CRUDE OIL:

If the pivot point of 85.90 for crude oil is broken, there is a possibility that it will target the support levels of 84.10, 82.78 and 80.98. If it exceeds the pivot point, it is likely to target the resistance levels 87.22, 89.02, and 90.34.

US30:

If the pivot point of 39,757 for the Dow is broken, there is a possibility that it will target the support levels 39,199, 38,530 and 37,972. If it exceeds the pivot point, it is likely to target the resistance levels 40,426, 40,984, and 41,653.

Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.

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