Currency Manipulation

When our Fed buys bonds, it's to help our economy. When another central bank buys their own bonds, we call it currency manipulation.

 

Intro: Investors will be turning their attention to Fed speakers as they come out of their blackout period and hear potential explanations of their next move. Investors will also be watching the Dollar which went on a roller coaster ride last week after the Fed statement. On the economic front., CPI, GDP 3rd Estimate, New Home Sales and Existing Home Sales are on this week’s calendar

FOMC Speeches: Multiple FOMC members will be giving speeches around the globe including Fed Chair Janet Yellen on Friday (3/27). Investors will be listening to their speeches for hints as to the timing of rate rises and their new interest rate trajectory. Any hints as to timing has the potential to see yields spike higher

US Dollar: Last week, the US Dollar dropped against all major currencies after the release of the FOMC statement, only to rebound the next day. The same happened with the 10 year Treasury yield as it dropped below 2%, only to recover. Traders will watch to see if the Dollar continues its march towards parity with the Euro and if Treasury yields will flatten  

PMI Readings: On Tuesday (3/24) multiple countries around the globe report Flash Manufacturing PMI which includes China, Japan, Germany, and France. Investors will be looking to see how much China has slowed down and how bond buying programs in other countries has potentially stimulated demand. Additionally, if we see further slowing in China, we can expect their central bank to lower rates to try and boost the country’s exports

Oil: Last week oil hit a new six year low. However, after the Fed statement, oil surged as the Dollar weakened since oil is priced in Dollars. Additionally, the US oil rig count fell by 41 to 825 in the latest week. Traders will continue to monitor the price of oil and watch for a bottom. Rig counts will also be watched as every rig employs a number of people

 Currency Wars: The latest shoe to fall was the Swedish Central Bank which cut its key policy rate and increased its bond buying program as a means to increase inflation. Traders will continue to watch which central bank makes the next surprise rate cut

 Nuclear Talks: Negotiations between Iran and the six-nation group led by the US are reaching their March 31st deadline with a potential deal within reach. If some of the sanctions are lifted, we could see an additional million barrels hit the market further pushing the price of crude lower

 Dark Horse: Greece may reenter the forefront this week as European leaders are running out of patience with them as the country is running out of money. Should Greece’s lenders decide to cut them off or if Greece starts to put capital controls in place, expect a global market sell off and further depreciating of the Euro

 

MONDAY (3/23)

  • 10:00 AM ET – Existing Home Sales - Feb
  • ECB President Mario Draghi Speaks
  • FOMC Member Stanley Fischer Speaks

 

TUESDAY (3/24)

  • 8:30 AM ET – CPI – Feb
  • 9:45 AM ET – Markit PMI Flash – Mar
  • 10:00 AM ET – New Home Sales - Feb
  • China HSBC Flash Manufacturing PMI
  • Japan Flash Manufacturing PMI
  • European Flash Manufacturing PMI
  • European Flash Services PMI
  • Great Britain CPI
  • FOMC Member John Williams Speaks

 

WEDNESDAY (3/25)

  • 8:30 AM ET – Durable Orders - Feb
  • 10:30 AM ET – Crude Oil Inventories
  • New Zealand Trade Balance
  • German IFO Business Climate
  • Bank of England Statement
  • FOMC Member Charles Evans Speaks 

 

THURSDAY (3/26)

  • 8:30 AM ET - Weekly Jobless Claims
  • FOMC Member Dennis Lockhart Speaks
  • Bank of Canada Governor Stephen Poloz Speaks
  • Great Britain Retail Sales
  • Earnings: Accenture

 

FRIDAY (3/27)

  • 8:30 AM ET – GDP 3rd Estimate – 4Q
  • 9:55 AM ET - Michigan Sentiment - Feb
  • Japan Retail Sales
  • FOMC Member Stanley Fischer Speaks
  • Federal Reserve Chair Janet Yellen Speaks