Analytics, News, and Forecasts for CFD Markets: currency news — 17-03-2017.

• Hope to tell G20 BoJ will continue to pursue powerful monetary easing to achieve domestic mandate of 2 pct inflation

• Don't think global consensus on importance of free trade will change suddenly, though unclear how debate at this G20 will unfold

• There has been consensus among global institutions, including G20, on the need to promote free trade

Manufacturing sales rose for the third consecutive month, up 0.6% to $53.8 billion in January. The gain stemmed from a 2.3% increase in non-durable goods sales, led by the petroleum and coal, and chemical industries.

Sales were up in 14 of 21 industries, representing 75.4% of the total Canadian manufacturing sector.

In constant dollars, sales increased 0.7%, indicating that higher volumes of manufactured goods were sold in January.

The overall level of consumer sentiment remained quite favorable in early March due to renewed strength in current economic conditions as well as the extraordinary influence of partisanship on economic prospects. The Current Economic Conditions component reached its highest level since 2000, largely due to improved personal finances.

While current economic conditions were not affected by partisanship, this was not true for the component about future economic prospects: among Democrats, the Expectations Index at 55.3 signaled that a deep recession was imminent, while among Republicans the Index at 122.4 indicated a new era of robust economic growth was ahead. Interestingly, those who self-identified as Independents had an Expectations Index of 88.3, which was nearly equal to the midpoint of the partisan difference.

Industrial production was unchanged in February following a 0.1 percent decrease in January. In February, manufacturing output moved up 0.5 percent for its sixth consecutive monthly increase. Mining output jumped 2.7 percent, but the index for utilities fell 5.7 percent, as continued unseasonably warm weather further reduced demand for heating. At 104.7 percent of its 2012 average, total industrial production in February was 0.3 percent above its level of a year earlier. Capacity utilization for the industrial sector declined 0.1 percentage point in February to 75.4 percent, a rate that is 4.5 percentage points below its long-run (1972-2016) average.

• Pay inequities in public sector should be addressed

• Successive tax cuts, wage hikes in excess of productivity and limited investment are threats to romanian economy

• Sees no room for further tax cuts to preserve flexibility in the budget

• Gains romania made to strengthen its economy are threatened

• Does not contain a reference to rejecting protectionism

• To reiterate commitment to avoid competitive devaluations

• To reiterate that exchange rate volatility is bad for economic growth

• Will consult closely on exchange markets

• Leaders agree on a set of principles to foster economic resilience

The first estimate for euro area (EA19) exports of goods to the rest of the world in January 2017 was €163.9 billion, an increase of 13% compared with January 2016 (€144.9 bn). Imports from the rest of the world stood at €164.5 bn, a rise of 17% compared with January 2016 (€140.1 bn).

As a result, the euro area recorded a €0.6 bn deficit in trade in goods with the rest of the world in January 2017, compared with a surplus of €4.8 bn in January 2016. Intra-euro area trade rose to €145.7 bn in January 2017, up by 10% compared with January 2016.

In January 2017 seasonally-adjusted data, compared to December 2016, increased by 0.5% for outgoing flows and decreased by 0.2 for incoming flows. Exports increased for non EU countries (+2.8%) while decreased for EU countries (-1.3%).

The decrease of imports is the result of an increase for non EU countries (+1.7%) and a drop for EU countries (-1.5%). Over the last three months, seasonally-adjusted data, in comparison with the previous three months, showed a growth of 3.8% for exports and of 4.3% for imports.

EUR/USD

Resistance levels (open interest**, contracts)

$1.0876 (989)

$1.0856 (116)

$1.0828 (47)

Price at time of writing this review: $1.0767

Support levels (open interest**, contracts):

$1.0672 (296)

$1.0622 (590)

$1.0562 (665)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 39673 contracts, with the maximum number of contracts with strike price $1,1450 (4228);

- Overall open interest on the PUT options with the expiration date June, 9 is 41789 contracts, with the maximum number of contracts with strike price $1,0350 (3869);

- The ratio of PUT/CALL was 1.05 versus 1.02 from the previous trading day according to data from March, 16

GBP/USD

Resistance levels (open interest**, contracts)

$1.2612 (315)

$1.2516 (758)

$1.2420 (291)

Price at time of writing this review: $1.2327

Support levels (open interest**, contracts):

$1.2283 (223)

$1.2187 (348)

$1.2090 (561)

Comments:

- Overall open interest on the CALL options with the expiration date June, 9 is 13832 contracts, with the maximum number of contracts with strike price $1,3000 (1223);

- Overall open interest on the PUT options with the expiration date June, 9 is 16411 contracts, with the maximum number of contracts with strike price $1,1500 (3142);

- The ratio of PUT/CALL was 1.19 versus 1.21 from the previous trading day according to data from March, 16

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.

Markets were positioned for a more hawkish Fed in both of its tone and its dot plot but the Fed did not meet these expectations as instead signalled a gradual approach for rate tightening with only two more rate hikes this year, notes ANB AMRO Research.

On the FX front, ABN AMRO projects that the broad USD weakness post-FOMC is likely to persist over the coming days.

"It is likely that the US dollar rally has come to an end and that more downward pressure is building in the near-term," ABN AMRO adds.

ANB AMRO also thinks that weakness in the gold price is over for now and a move back towards USD 1,250 is on the cards in the coming weeks.

USD Index is trading at 100.41 and Gold is trading circa 1229.59 as of writing.

Source: ABN AMRO Research, efxnews.

New Zealand's manufacturing sector saw activity increase in February after a dip in expansion during January, according to the BNZ - BusinessNZ Performance of Manufacturing Index (PMI).

The seasonally adjusted PMI for February was 55.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 3.0 points higher than January, and the highest level of expansion since September 2016. Overall, the sector has remained in expansion in almost all months since October 2012.