Key Fundamental Factors this Week (3/16 – 3/20)

Key Fundamental Factors this Week (3/16 - 3/20)

Last week was relatively light on fundamental factors. The RBNZ met and held rates, giving a neutral statement. Australia saw a slight rebound in jobs data. US retail sales data was disappointing, and inflation at the factory gate is still negative. Jobs data in Canada continue to be negative.This week, there will be a fuller slate of fundamental factors. Let’s take a look at what’s in store for us.

3/16 Monday

Empire State Manufacturing Index (Mar.)
Forecast: 8.1
Previous: 7.8
Industrial Production m/m  (Feb.)
Forecast: 0.3%
Previous: 0.2%
us industrial production feb.
(click to enlarge; source:
There has not be any significant concern about manufacturing, though we can say that numbers in the recent months have not be impressive as we can see in the historic chart for industrial production.

3/17 Tuesday

BoJ Monetary Policy Statement  is usually a “boring” event. But be prepared for any sudden changes in tone. At the moment the bank remains in stimulus mode and has not mentioned scaling that back. This is part of why the JPY remains a weakling, so if there are any hints that the bank wants to start scaling back QQE, the market might pour back into the JPY for the short to medium-term.

German ZEW Economic Sentiment (Mar.):
Forecast: 58.9
Previous: 53.0
ZEW Economic Sentiment (Germany)
(click to enlarge; source:
Eurozone ZEW Economic Sentiment (Mar.)
Forecast: 58.2
Previous: 52.7
There has been a recovery in economic sentiment in Germany and the Eurozone. While this has not given the euro a boost, it lays the foundation for a speedy recovery when inflation and jobs numbers rebound, and if the Greek situation is managed.
Eurozone Final CPI y/y (Feb.)
Forecast: -0.3%
Previous Estimate: -0.3%
Previous: -0.6
eurozone final cpi feb.
(click to enlarge; source:
The negative reading has been priced in. But if there is further revision to a reading below -0.3%, there is a chance that EUR/USD will fall further especially if it is consolidating ahead of the release.

Canada Manufacturing Sales m/m
Forecast: -1.1%
Previous: 1.7%

US Building Permits (Feb.) Annualized
Forecast: 1.07M
Previous: 1.06M

3/18 Wednesday

UK Average Earnings Index 3m/y (Jan.)

Forecast: 2.2%
Previous: 2.1%
(click to enlarge; source:
Claimant Count Change (Feb.)
Forecast: -31.0K
Previous: -38.6K
Unemployment Rate: (Feb.)
Forecast: 5.6%
Previous: 5.7%
UK’s labor market situation has been steadily improving. The unemployment rate is expected to fall again, with another month of fewer claims for unemployment benefits. The key data point that will help the BoE determine future monetary policy will be wage growth. and the Average Earnings Index has been improving and is expected to have ticked higher in Jan to start the year in the right direction.

CAN Wholesale Sales m/m  (Jan.)
Forecast: 2.1%
Previous: 2.5%

FOMC Economic Projections and FOMC Monetary Policy statement Press Conference. This will be a key meeting for the Fed as they update their projection for the economy and in turn for their plan to raise rates this year. The FOMC entered the year planning to raise rates by mid-year, and data has been mixed. The main issue will be wage growth and if the projection show confidence in this data point despite a lack of positive trend, then we are likely going to see the USD strengthen especially if it is consolidating ahead of this key event risk. Now, if the FOMC simply says its important to wait for wage growth to pick up before raising rates, the USD might scale back a bit especially if it is rallying into the event risk.

New Zealand GDP q/q (Q4)
Forecast: 0.8%
Previous: 1.0%
(click to enlarge; source:
The RBNZ remained neutral, which gave the NZD a slight boost. If Q4 GDP can hold above 1.0%, we should expect another push. Otherwise, the boost in NZD will fizzle if the GDP reading for Q4 is in-line with the expectation of a decline to 0.8% or even lower.

3/19 Thursday

SNB Monetary Policy Statement
Libor Rate
Forecast: -0.75%
Previous: -0.75%

Targeted LTRO
Previous (Dec.): 129.8B
Previous (Nov.) 82.6B
If we see the size of LTRO continue to expand, we should also see the euro continue to fall. If we start to see LTRO subside, we can start thinking about support for the euro as EUR/USD falls toward parity.

US Jobless Claims this week
Forecast: 297k
Previous Week: 289K
Philly Fed Manufacturing Index
Forecast: 7.3
Previous: 5.2

3/20 Friday

CAN CPI m/m (Feb.)
Forecast: 0.7%
Previous: -0.2%
Core CPI m/m (Feb.)
Forecast: 0.5%
Previous: 0.2%
(click to enlarge; source:
Retail Sales m/m (Jan.)
Forecast: -0.3%
Previous: -2.0%
Core Retail Sales m/m (Jan.)
Forecast: 0.1%
Previous: -2.3%
A rebound in inflation should give the weak CAD some support. However, its the jobs data that is keeping the BoC dovish. Also, retail sales has been subdued just like in the US. We might see some rebound for the loonie if the inflation data is in-line with expectations simply because the CAD might be a bit oversold in the short-term. However, it should remain weak in the medium-term due to a lack of consistent recovery in the labor market.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at