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Weekly Outlook: Feb. 18 - 22

2019-2-18 09:56:57Basics of Trading
Weekly Outlook: Feb. 18 - 22

Despite a holiday-shortened week in the U.S. the economic calendar for this week is busy, with U.S.-China trade talks continuing in Washington and Federal Reserve minutes and U.S. economic reports on tap.

Both the U.S. and China reported progress in trade negotiations last week, but President Donald Trump said Friday that the talks were “very complicated" and that he might extend the March 1 deadline and keep tariffs on Chinese goods from rising.

U.S. duties on $200 billion worth of Chinese imports are set to rise from 10% to 25% if no deal is reached by the deadline.

The Fed on Wednesday is due to publish the minutes of its January meeting where its kept rates on hold and surprised markets by shifting to a more dovish stance on future rate hikes, citing subdued inflation and rising risks to global economic growth.

This week will also see speeches from a number of Fed officials, including New York Fed President John Williams and St. Louis Fed head James Bullard.

Market watchers will be looking ahead to Thursday’s durable goods report for an update on the health of the manufacturing sector, while a report on existing home sales the same day will give fresh insight into the housing sector, which lost momentum late last year amid higher interest rates and property prices.

The U.S. dollar slid lower on Friday after San Francisco Fed President Mary Daly suggested the central bank may hold off on raising interest rates in 2019.

The dollar index, which measures the currency against a basket of six rivals, was at 96.74 late Friday, after a week that included several weak data reports, including dismal U.S. retail sales.

The fall in the dollar saw the euro pull back from a three month low hit earlier in the day.

"All of this looks like a positive risk tone in markets on dovish Fed comments from Daly which go further than what other Fed speakers have said," said Richard Franulovich, senior currency strategist at Westpac Banking Corp. "That I think is what has undermined the dollar and pulled the euro up."

Despite Friday’s recovery the single currency posted a second week of losses and is down 1.7% year to date on weaker-than-expected euro zone data.

The dollar was flat against the yen late Friday, with USD/JPY ending at 110.48.

Elsewhere, sterling ended little changed at 1.2894 after British Prime Minister Theresa May on Thursday suffered a largely symbolic defeat on her Brexit strategy.

Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.

Monday, February 18

The U.K. is to publish industry data on house price inflation.

Financial markets in the U.S. will be closed for Washington’s Birthday, more widely known as President’s Day.

Tuesday, February 19

The Reserve Bank of Australia is to publish the minutes of its latest policy setting meeting.

The U.K. is to publish its monthly jobs report.

The ZEW Institute is to publish a report on German economic sentiment.

Wednesday, February 20

Australia is to publish data on the wage price index.

The Fed is to publish the minutes of its January rate setting meeting.

Thursday, February 21

Australia is to release its jobs report.

The euro zone is to release data on private sector business activity.

The European Central Bank is to publish its meeting minutes.

The U.S. is to release data on durable goods orders, jobless claims, existing home sales and manufacturing activity in the Philadelphia area.

Friday, February 22

The Ifo Institute is to publish a report on German business climate.

The euro zone is to release revised inflation data.

Canada is scheduled to produce data on retail sales.

ECB President Mario Draghi is to speak at an event in Bologna.

A number of Fed officials, including New York Fed President John Williams, St. Louis Fed head James Bullard and Fed Governors Randal Quarles and Richard Clarida are to speak at the U.S. Monetary Policy Forum, in New York.