Fundamental Analysis - Microsoft · The public sector posted a 0.1% monthly ... * the data is based...
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08/11/2016 Fundamental Analysis
Transcript of Fundamental Analysis - Microsoft · The public sector posted a 0.1% monthly ... * the data is based...
08/11/2016
Fundamental Analysis
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Major events this week (November 7-11)
Day/Time (GMT) Flag Currency Event Period Actual Forecast Previous
MONDAY
07:00 am EUR German Factory Orders (MoM) November -0.6% 0.2% 1.0%
12:30 pm GBP Halifax HPI (MoM) November 1.4% 0.3% 0.1%
TUESDAY
Tentative CNY Trade Balance November 325B 366B 278B
09:30 am GBP Manufacturing PMI (MoM) November 0.5% 0.2%
Tentative USD Presidential Election November
WEDNESDAY
09:30 am GBP Goods Trade Balance November -11.3B -12.1B
15:30 pm USD Crude Oil Inventories November 14.4M
20:00 pm NZD RBNZ Rate Statement
THURSDAY
13:30 pm USD Unemployment Claims November 267K 265K
FRIDAY
15:00 pm USD Prelim UoM Consumer Sentiment November 87.4 87.2
15:50 pm CAD BoC Gov Poloz Speaks November
UK
The Bank of England left its key interest rates on hold but revised upwards its growth and inflation forecasts at its monetary policy meeting on Thursday. Policymakers voted anonymously to keep the benchmark rate unchanged at 0.25%, which was cut in August. Furthermore, the Central bank kept its corporate and government bond-purchase programs unchanged at 10 billion and 435 billion pounds, respectively. Meanwhile, the 2017 inflation forecast was revised up to 2.7% from 2.0% estimated in August, following the weak British Pound. However, inflation is expected to cool down by the end of 2019, falling to 2.5% and further. The 2016 GDP forecast was revised up to 2.2% from August's 2.0%, supported by the stronger than expected household spending, rebound in the housing market and improvements in both business and sentiment indicators despite the uncertainty caused by the Brexit vote. Moreover, the Bank of England revised up its GDP growth projections for 2017 to 1.4% from the previous estimate of 0.8%. The Bank noted that output growth is expected to be stronger in the near-term but weaker than previously estimated. Therefore, the 2018 GDP forecast was revised down to 1.5% from August's estimate pf 1.8%.
US
US manufacturing activity grew for the second consecutive month in October, official data showed on Tuesday. The Institute for Supply Management said its Manufacturing Purchasing Managers' Index jumped to 51.9 points in October, following the preceding month's reading of 51.5 and surpassing the 51.8 market forecast. The October growth was mainly driven by a rise in production and hiring. Any reading above the 50 point level 50 indicates an expansion in the manufacturing sector, which accounts for about 12% of the US economy. Meanwhile, the Production Index rose 1.8% to 54.6 points, while the New Orders Index dropped to 52.1 from the previous month's 55.1 and the Employment Index increased 3.2% to 52.9 during the reported period. The Export Orders Index rose slightly to 52.5 from the prior month's figure of 52. Analysts widely expect manufacturing activity to pick up in the Q4. The US manufacturing sector was hit by the strong US Dollar between June 2014 and December 2015, as the appreciation of the Greenback hampered US exports. The Federal Reserve began a two-day policy meeting on Tuesday and it is unlikely to raise interest rates at this meeting ahead of the presidential election on November 8. However, analysts widely anticipate a December rate hike.
Canada
The Canadian economy expanded for the third consecutive month in August, official figures showed on Tuesday. According to Statistics Canada, the economy grew 0.2% to $1.25 trillion month-over-month in August, following July's downwardly revised 0.4% growth. However, the August reading matched market expectations. On an annual basis, Canada's GDP increased 1.3%, also in line with projections. The 0.2% expansion was mainly driven by the mining, quarrying, oil and gas extraction, utilities, manufacturing and construction sectors. Manufacturing output advanced 0.3% and 0.4% on a monthly and yearly basis, respectively, whereas construction rose 0.5% month-over-month but fell 3.4% year-over-year. The country's service sector output remained unchanged on a monthly basis, growing 2.2% in annual terms. The public sector posted a 0.1% monthly increase and jumped 2.3% compared with the same month of the previous year. Oil and gas extraction advanced 0.9%.
Key highlights of the week ended November 4
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EUR
“The initial relief after the Brexit shock provided by two positive months with increasing new orders has now given room for realism. German industry is still running low on fuel”. - Carsten Brzeski, ING-DiBa
Tuesday, November 08, 2016 07:30 GMT
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Trends* Q4 16 Q1 17 Q2 17
MAX 1.43 1.19 1.20
75% percentile 1.11 1.12 1.13
Median 1.09 1.09 1.09
25% percentile 1.07 1.07 1.06
MIN 0.97 0.96 0.95 * the data is based on international banks’ forecasts
Impact
German factory orders post surprise fall in September High
German factory orders dropped unexpectedly in September amid weak domestic demand and sluggish overseas demand, official data showed on Monday. According to Destatis, orders for German-made products fell 0.6% in the reported month, the biggest drop since April, after rising for two consecutive months, while market analysts expected a 0.2% increase. Meanwhile, the August gain of 1.0% was revised down to 0.9%. Despite the September drop, however, the overall growth of factory orders remained positive in the Q3. Destatis also pointed to improved sentiment indicators that provided hopes for a rebound in the industrial sector over the rest of the year. Nevertheless, analysts remained cautious, noting that the sector remained weak since 2013-2014. Domestic demand declined 1.1%, whereas foreign orders fell 0.3% in September. Factory orders from other countries in the Euro zone decreased 4.5% in the same month. The drop was mainly driven by lower demand for capital goods produced in the Euro zone’s largest economy. Orders intermediate and consumer goods increased modestly. The German economy was expected to lose steam in the Q3 2016, after expanding 0.7% and 0.4% in the Q1 and Q2, respectively.
07.11 open price 07.11 close price % change
EUR/USD 1.10526 1.104 -0.11%
EUR/GBP 0.8882 0.89055 +0.26%
EUR/CHF 1.0816 1.07567 -0.55%
EUR/JPY 115.067 115.266 +0.17%
GBP
“The low cost of borrowing, weak supply levels and a robust jobs market are preventing prices from falling more sharply”. - Mark Posniak, Octopus Property
Tuesday, November 08, 2016 07:30 GMT
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Trends* Q4 16 Q1 17 Q2 17
MAX 1.84 1.55 1.45
75% percentile 1.32 1.31 1.31
Median 1.29 1.28 1.28
25% percentile 1.25 1.25 1.25
MIN 1.17 1.12 1.07 * the data is based on international banks’ forecasts
Impact
UK house price inflation grows 1.4% in October High
UK house prices jumped unexpectedly on a monthly basis in October, despite signs of a slowdown seen in the previous six months. According to the UK’s biggest lender, Halifax, the House Price Index advanced 1.4% in October, surpassing the 0.3% rise forecast. However, the October surprise growth could be a correction following September’s modest rise of 0.3% and declined of 0.3% and 1.1% registered in August and July, respectively. Meanwhile, the preceding month’s gain was revised up to 0.3% from the originally reported increase of 0.1%. The average price of a house in Britain climbed 1.4% to 217,411 pound last month, the biggest increase since March. Nevertheless, Halifax said that the annual house price inflation rose just 5.2% last month, the lowest level in more than three years, down from September’s gain of 5.8% and a record high a 2016 record high of 10% seen in March. Separately, Nationwide reported last week that house price growth stalled in October for the first time in 16 months. However, according to Nationwide, property prices grew 4.6% on an annual basis in the same month. Analysts suggest that the UK housing market still remained under pressure from June’s vote to leave the European Union last month.
07.11 open price 07.11 close price % change
GBP/USD 1.24505 1.23934 -0.46%
EUR/GBP 0.8882 0.89055 +0.26%
GBP/CAD 1.66103 1.65632 -0.28%
GBP/JPY 129.584 129.471 -0.09%
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Major events previous week (October 31-November 4)
Day/Time (GMT) Flag Currency Event Period Actual Forecast Previous
MONDAY
10:00 am EUR Gross Domestic Product (YoY) Quarter 0.3% 0.3% 0.3%
12:30 pm USD Personal Spending (MoM) September 0.5% 0.4% -0.1%
TUESDAY
8:00 am CNY Caixin Manufacturing PMI October 51.2 50.2 50.1
02:55 am JPY BOJ Interest Rate Decision October -0.1% -0.1% -0.1%
09:30 am GBP Manufacturing PMI October 54.3 54.6 55.4
12:30 pm CAD Gross Domestic Product October 0.2% 0.2% 0.5%
14:00 pm USD ISM Manufacturing PMI October 51.9 51.8 51.5
21:45 pm NZD GDT Price Index October 11.4% 1.4%
WEDNESDAY
09:30 am GBP Construction PMI October 52.6 51.9 52.3
14:30 pm USD Crude Oil Inventories October 14.4M 0.6M
THURSDAY
12:00 pm GBP Official Bank Rate October 0.25% 0.25% 0.25%
12:30 pm USD Unemployment Claims October 265K 257K 258K
FRIDAY
10:00 am EUR Producer Price Index (MoM) September 0.1% 0.0% -0.2%
12:30 pm USD Unemployment Rate October 4.9% 4.9% 5%
12:30 pm CAD Employment Change October 43.9K 67.2K
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Chart SMA (55) – Simple Moving Average of 55 periods SMA (200) – Simple Moving Average of 200 periods Forecasts
EXPLANATIONS
Third Quartile – separates 25% of the highest forecasts
Second Quartile – the median price based on the projections of the industry
First Quartile – separates 25% of the lowest forecasts
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