Daily analysis 23.03.2017

23.03.2017 12:29|Marcin Lipka

Anticipation for today’s voting in the American House of Representatives. Positive retails sales data from the United Kingdom supports the pound. The zloty remains relatively strong against the majority of currencies. The EUR/PLN is near the area of 4.27-4.28.

Most important macro data (CET – Central European Time). Estimates of macro data are based on Bloomberg information, unless marked otherwise.

  • 13.30: Weekly jobless claims from the USA (estimates: 240k).
  • 13.45: Janet Yellen’s testimony regarding education.
  • 14.00: The minutes from the MPC.
  • 15.00: Sales of new houses in the USA (estimates: 564k).
  • Voting over the new healthcare regulation in the USA. Most likely at night.

Voting

Over the past few hours, the American media have been focusing on the voting over the new healthcare regulation. This regulation will determine, whether the projects regarding economic changes will be prepared by the Congress.

Today, President Donald Trump will meet the congressmen, who claim that the changes proposed by the majority of the government, are insufficient, compared to the currently valid Obamacare system.

According to Bloomberg’s calculations, the Republicans may allow themselves to lose 21 votes. However, according to CNBC estimates, 29 representatives of the Republican Party may vote against the regulation. In addition to that, Alyssa Farah, who represents a skeptical faction of the Republican Party, claimed on her Twitter profile that 25 members of her party are against the regulation.

Of course, it’s difficult to estimate which statements are only a part of a political game. Nevertheless, if the regulation is not denied, the likelihood of its acceptance will increase with every hour. This would increase the chances for stopping the dollar’s weakness (against the yen, in particular).

Positive readings from UK

The GBP/USD has reached the level of 1.2500. The stronger pound is partially a result of positive data regarding the British retail sales. The previous trends regarding the consumer expenses had been showing a clear slowdown in the growth pace. However, the reading for February has ended this negative trend.

The retail sales index (excluding fuels) for February, increased 4.1% YOY, against the expected 3.2% YOY, as well as against 2.1% YOY from the preceding month. The general consumption growth was better than expected as well (3.7% YOY; estimates: 2.6% YOY).

Due to the fact that it was feared that the Brits would limit their consumption due to increasing inflation, as well as the lack of increase in the real salaries, today’s data has pushed the risk of the economic slowdown away. This is despite a tense political situation and the uncertainty regarding Brexit. Moreover, this information may prevent from the pound’s further depreciation, for the time being.

Minutes from MPC

The zloty remains strong and has been resistant to an increase in the risk aversion. The global appreciation of both the franc and the yen, has not been translating to the sale of the other emerging market currencies as well. This is partially a result of a decrease in the profitability of the American debt. Additionally, some investors may not believe in the long-term deterioration of the sentiment and refuse to close their positions on the emerging market currencies.

Today’s publication of the minutes from the previous MPC meeting can be interesting, regarding the recent local events. The Council’s previous press conference has left an impression that the Polish monetary authorities may leave interest rates unchanged for the next year as well. However, if the minutes indicate that some members of the Council have been considering a sooner monetary tightening, this may strengthen the zloty.



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