All times GMT
Monday Mar 3rd:
GE - 08:55 - Manufacturing PMI.
EU - 09:00 - Manufacturing PMI.
UK - 09:30 - Manufacturing PMI.
EU - 10:00 - CPI Y/Y.
US - 15:00 - ISM Manufacturing Index & Prices.
US - 15:00 - Construction Spending.
Tuesday Mar 4th:
UK - 09:30 - Construction PMI.
EU - 10:00 - GDP Q/Q.
EU - 10:00 - PPI M/M.
Wednesday Mar 5th:
ALL - ALL - OPEC Meeting.
UK - 00:01 - Consumer Confidence Index.
GE - 08:55 - Services PMI.
EU - 09:00 - Services PMI.
UK - 09:30 - Services PMI.
EU - 10:00 - Retail Sales M/M.
UK - 10:15 - BRC Shop Price Index Y/Y.
US - 13:15 - ADP Nonfarm Employment Change
US - 13:30 - Nonfarm Productivity Q/Q.
US - 13:30 - Unit Labor Costs Q/Q.
US - 15:00 - Factory Orders M/M.
US - 15:00 - ISM Non-Manufacturing Activity.
US - 15:00 - ISM Non-Manufacturing Composite.
US - 15:30 - Crude Oil Inventories.
US - 19:00 - Beige Book.
Thursday Mar 6th:
FR - 07:45 - Government Budget Balance.
GE - 11:00 - German Factory Orders M/M.
UK - 12:00 - Interest Rate Statement.
EU - 12:45 - Interest Rate Statement.
EU - 13:30 - ECB President Trichet Speaks.
US - 13:30 - Unemployment Claims.
US - 15:00 - Pending Home Sales M/M.
Friday Mar 7th:
EU - 11:00 - Composite Leading Indicators M/M.
GE - 11:00 - Industrial Production M/M..
US - 13:30 - Nonfarm Employment Change.
US - 13:30 - Unemployment Rate.
US - 13:30 - Average Hourly Earnings M/M.
US - 20:00 - Consumer Sentiment M/M.
EU - Europe wide
FR - France
UK - United Kingdom
US - United States
GE - Germany
A bad day, a bad week, a bad year could pretty much sum up equity markets at the moment. The Bulls took their eye off the ball and the bears stepped in to remind everyone just who really is in control of this market. The week had started very well, as a wave of buying broke indices from their coil. The recent narrow range in the indices had taken on the shape of something called a "triangle" pattern. This attracted a lot of attention from technical analysts, so it perhaps should not be a surprise that the break out of such a widely identified pattern turned out to be a fake.
Bad news about the US economy and general company earnings continued to flow throughout the week. Currency and fixed income traders knew the announcements didnt bode well for the US economy, yet equities were determined to rally going into Bernankes testimony before congress on Wednesday. On Thursday reality finally set in and markets started their decline. There are various news headlines that have been suggested as the real catalyst for the reversal, with the halting of the rumored Ambac rescue plan, top of the list.
The US Dollar plummeted to new depths against the Euro, closing the week at 1.5171. The European single currency has come a long way since breaking upwards from below parity in 2000. The strength of the Yen against a basket of currencies sparked fears for the global carry trade towards the end of last week. Commodities continued to push higher with wheat and Soya bean prices reaching record highs. Oil closed a week above $100 for the first time and the price of natural gas reached record highs. Golds inverse relationship with the US Dollar contributed to it rocketing to within $25 of the $1000 level.
US economic data continued to show that producers are having to pass these record commodity prices on to consumers, causing rising inflation while the economy falters. Despite Bernankes assurances, the prospect of stagflation is haunting the markets.
It is difficult to see where the good news is going to come from next week, with another busy period of economic announcements ahead of us. The Bank of England could provide some cheer by cutting rates to 5.00% on Thursday, but this is unlikely. The MPC are well aware that inflation is rising and previous rate cuts have done little to harden the shrinking housing market. Recent data showed that mortgage costs have actually gone up on both sides of the Atlantic since the recent interest rate cuts. In the US, the top tier announcements are the ISM on Tuesday, more home sales data on Thursday, and the all important Non Farm Payroll on Friday. In addition to the ECBs interest rate statement on Thursday, we have statements from the central banks of Australia and Canada on Tuesday, New Zealand on Wednesday and Japan on Friday.
US markets closed February in the red, making four straight losing months on the Dow Jones. According to research from Bespoke Investments, the implications are negative for the next month with a median performance of -0.56% following four straight monthly losses. On the positive side, the put/ call option indicator has reached extreme levels of bearishness. As 80% of options expire worthless, this is often a useful contrarian indicator.
With Gold moving $75 in the last two weeks alone, and the $1000 level just $25 away, there could be value in a trade predicting that this level will be breached in the near future. A One Touch trade for Gold to touch $1000 in the next 80 days, could return 12%. Gold has to touch or trade through $1000 once in the next 2 ½ months for you to win.
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