Your Weekly Fundamental View (Jan 23-27)

Janvāris 23, 2017 16:00

AM-WeeklyFR-Banner-6.png

Need to know

This week's main focus is on the British court ruling whether parliament must confirm the British exit out of the EU. Also, on this week's agenda are the first indications of the GDP figures in the US and in Great Britain.

Coming up

EU membership court ruling in the UK on Tuesday, 24 January.

The United Kingdom's (UK) High Court will announce a ruling whether the British government can bypass the parliament when invoking Article 50 of the Lisbon Treaty, which sets in motion the British exit (Brexit) out of the European Union (EU).

Why should you care? The British courts will impact the process and length of the procedure that will lead up to the Brexit out of the EU. Basically, the Brexit negotiations with the EU would start later if the High Court decides that a parliamentary majority is needed.

Market manufacturing PMI flash in Germany on Tuesday, 24 January.

The PMI level is an index based on surveyed purchasing managers in the manufacturing industry. The survey takes into account 500 managers who rate the relative level of business conditions.

Why should you care? A figure above 50.0 indicates an industry expansion whereas a number below it shows contraction. The previous figure was 55.6, and the expected figure is 55.4(*).

Japanese balance of trade on Tuesday, 24 January.

Trade balances indicates the value difference between imports and exports of goods. A positive number indicates that more goods were exported than imported.

Why should you care? Exports and imports have a direct connect with buying and selling of currencies. Foreigners will exchange for domestic currency to buy exports for instance. The previous figure is JPY 153B, and the forecasted figure is JPY 270B(*).

Ifo German business climate on Wednesday, 25 January.

The index is based on surveys with manufacturers, builders, retailers, and wholesalers. It surveys 7,000 businesses and asks them to rate the relative level of current business conditions and expectations for the next 6 months.

Why should you care? The previous figure is 111, and the forecasted figure is 111.2(*).

British preliminary GDP growth rate quarter on quarter is out on Thursday, 26 January.

The GDP figures show the annualised change in the inflation-adjusted value of the total goods and services in Great Britain. This release is the first, initial report out of a total of four versions.

Why should you care? The earliest report typically has the most impact on the markets. The previous figure was 0.6%, and the forecasted number is 0.5%(*).

US Unemployment Claims are released on Thursday, 26 January.

The initial jobless claims are the earliest national economic data, representing the number of individuals who filed for insurance for the first time during the past week. If the actual result comes weaker than the forecast, it would be deemed good for the currency.

Why should you care? The number of unemployed people is an important signal of the overall economic health and could hint at future monetary policy steps. The previous figure was 234k(*).

US advanced GDP growth rate quarter on quarter is out on Friday, 27 January.

The GDP figures show the annualised change in the inflation-adjusted value of the total goods and services in the US. This release is the earliest report after which two newer versions are released with more accurate numbers.

Why should you care? The earliest report typically has the most impact on the markets. The previous figure was 3.5%, and the forecasted number is 2.1%(*). The image below shows the trend and development of the GDP growth rate from a quarter on quarter perspective.

us gdp.png
Source: development of US GDP growth rate quarter on quarter

(*) Admiral Markets Calendar