Market Forecast 03.02.2017 by Capital Investment Brokers - CIBFX
Here is what to expect this coming trading week. Earning season reports are already laid out with incoming reports from Disney, Coca-Cola, and General Motors. BNP Paribas and Commerzbank would also provide interest data this coming week. The agreement on the production cut by OPEC would be cleared this week by the International Energy Administration regarding its concern on whether it could support the US’ rising demand.
Positive US Outlook for the Week despite Trump’s Sideline Policies
The travel ban implemented by President Trump was not well-received. Analysts say this move is getting more attention than what was promised. Though stocks have been rallying over the past few weeks, these sudden policies, which affect the sentiment among other global markets, would likely influence what the administration should be focusing on. Analysts say that it is the political sentiment that drives the market right now and not the bank’s regulations or policies. Investors and traders are hoping that the promised tax reforms and increased fiscal spending would be immediately set in motion to further cement the strong economic movement.
The unemployment report claims reflect positively as it continues to show a healthy labor market in the country. Last week’s report of 246,000 would be supported by a slightly increased forecasted figure of 249,000. The economy is expecting strong support from its labor sector. The US crude oil inventory report reached 6.5 million barrels last week, with an expected additional 2.6 million the coming week. The trading price still remains within the $53 range due to a weak dollar index.
Another report to be taken for the long term positioning of every portfolio is the upcoming Consumer Sentiment report to be released on Friday. Based on the report, 44% of the respondents were positive towards the improvement of the economy while 33% expect the decline in the unemployment rate to continue. However, outside relations with other countries do not fare well this week after unprecedented words have been thrown by President Trump towards Japan, Australia, and Mexico. This action has added more volatility to the market.
Chinese reports take spotlight next week
Friday is the date set for China’s January trade figures. The report is expected to reflect information based on last month’s figure of $40.8 billion to $48.9 billion trade surplus. The country still needs to address its housing market problems and the effect of US policy on economic activity protection. On the brighter side, the country’s economy recorded growth by 6.8% for Q4 due to bank’s lending activities and government spending. Caixin services PMI would also be released Monday, with an expected figure rising to 53.6, as compared to the last report of 53.4.
Reserve Bank of Australia rate decision
Last December, the bank kept its benchmark interest rate of 1.50% while retaining its monetary policy. This coming Tuesday, the bank would release its decision. As economists expect, the bank would not change the rate due to its attempt to put a balance on the housing market against inflation and wage growth, which was not reaching the target figures. Retail sales figures would also be released this coming Monday.
Reserve Bank of New Zealand reports
The current rate of 1.75% is expected to be influenced by the US status in its political stance and focus, as well as by the looming Brexit movement. Based on the forecast, the bank would keep its current rate, yet changes would be made as soon as certain factors such as inflation and outside economic effect perpetuate in the country’s economic position.
Canada’s Employment Report
This month would expect a drop from 6.9% to 6.8% on Canada’s unemployment rate. It is the full-time positions that are marking gains, which reflect an 81,300 increase while part-time positions showed a drop by 27,600.