In the first article of New Year we wrote down the important appointments to keep an eye on about the economic calendar of January. Here we will give you some answers about this busy week full of macroeconomic data.
On the European front, the week opens with the Sentix investor confidence index that reveals a decrease from the previous time (15.6 versus 9.6). However, the index remains above zero, indicating that investors remain optimistic about the fate of Europe.
The most important European event was, however, the meeting of the Central Bank of England on interest rates. The British decided to leave rates unchanged at 0.50% despite the data showed on Tuesday a drop in manufacturing production (from 0.0% to -0.7%) and a stable industrial production (-0.4% unchanged).
Then, the plan of quantitative easing remains stable: the Bank of England has confirmed at the meeting the target at £ 375 billion.
The Eurozone trade balance calculated on a monthly basis for the month of November recorded a value of € 23.6 billion, resulting in decrease on the previous € 24.1 billion but it increased compared to € 20.1billion of last year.
On the contrary, US macroeconomic data have not been so good. The week begins with the decline of the US Fed’s Beige Book index from 0,8 to -0.7%. The Beige Book is a unique relationship on the data provided by all the Federal Districts of the Federal Reserve about production, consumption, sales, financial and banking, energy, agriculture, etc.
The number of US persons who have applied for unemployment benefits at the Employment Office increased from 277K to 284K.
In December, US retail sales (excluding sales in the auto industry – the so called ‘core version’), fell to -0.1%, compared with the result of the previous month of 0.4%. The data on industrial production rose instead from the previous data: -0.9% to -0.4%.
And that is how the Euro has gained strength against the US dollar thanks to the collapse of oil prices and the macro data in the US that have not been so positive. The euro-dollar hit up 1.0942 on Friday morning.
Oil prices fell below $ 30 a barrel, a level that has not been touched in 12 years.
Producing countries continue to leave output unchanged especially to damage countries that have become almost self-sufficient in terms of energy (eg. US and Russia).
Right now, the black gold is playing an important part in the import/export of economies. Its price is the factor that most influences the changes of currencies as well as the price of other commodities.
Gold, however, continues to move between high and low, showing that it cannot aspire at the role of ‘safe haven’, unlike the Japanese yen that has made huge gains taking advantage of the forced closure of a number of short positions with high leverage.
This week is over, but the eyes remain focused on China and macroeconomic data that will release Tuesday, including the fourth quarter of the GDP.