The week was again full of releases of economic data from both the EU and the USA. The focus was on consumer prices and retail sales. Market participants, in particular, are currently watching the data from the USA very strongly, as the Fed has no clear position regarding the rate hike soon. Some Fed and ECB members have had their say, and some have in fact moved the market for a short time.
Economy and monetary policy
EU: Aus The following data were published in the EU
- From Germany consumer prices, the ZEW indicators and the wholesale price index
- From the EU the ZEW expectations, industrial production, consumer prices and the trade balance
- Consumer prices from France, Spain, Italy and Great Britain
- From Great Britain the average earnings index, the change in unemployment statistics and the unemployment rate
Consumer prices fell for Germany in September as expected. Compared to the previous month, it declined by 0.2%, while the year-on-year comparison was 0.0%. ZEW expectations throughout the month disappointed more than expected. The ZEW economic indicator also declined. The wholesale price index also declined in September.
ZEW expectations were also negative for the EU zone. EU industrial production was also more or less below expectations in August. Consumer prices and the trade balance will be released on Friday. Prices are expected to increase by 0.2% compared to the previous month. On an annual basis, prices are expected to decline by 0.1%. It is believed that the trade balance will decrease by about 10 trillion. Euro falls.
Consumer prices in all countries mentioned were negative. Great Britain only had partially positive data from the labor market. The average earnings index rose in August, but less than expected. The unemployment rate fell 0.1%, more than expected. The change in unemployment statistics was negative.
USA: The following data was published from the USA:
- Retail sales
- Consumer prices and producer prices
- Weekly applications for unemployment benefits
- NY Empire manufacturing index and Philly Fed manufacturing index
- Industrial production
- JOLTS report
- Michigan economic expectations
Retail sales rose less than expected in September. By contrast, core sales declined than expected. Producer prices also fell more than expected in September. The core producer prices were also negative. In contrast, consumer prices are either positive or as expected. The CPI was the only one that had declined compared to the previous month. That was expected. The year-on-year comparison was positive at 0.0%, contrary to expectations.
Weekly applications for unemployment benefits fell. An increase was expected. NY Empire and Philadelphia (Philly Fed) manufacturing indices both fell more than expected in October.
The rest of the data will be released on Friday. A slight decline is expected for industrial production compared to the previous month as well as compared to the previous year. The JOLTS report is expected to post a slight decline in new jobs, while Michigan economic expectations are expected to be positive in October.
Some key Fed members have made speeches. Roughly speaking, contrary to Janet Yellen's opinion, some did not vote for a rate hike until next year. In contrast, an ECB member called for an expansion of the QE program, which in turn made the euro weaker.
TECHNICAL ASSESSMENT OF THE MARKETS:
DAX: This week, the DAX is mostly dwindling at the 10,000 point zone. A sustained break in this zone should lead to an increase in the next resistance area not far away. This is 10,500 points. On the other hand, falling below 9,700 points would initially revise the upward trend.
EUR / USD: EUR / USD continues to show strength, partly due to the reasons mentioned above. The medium-term downward trend has been broken and the price is currently at an important resistance zone (green horizontal zone). If this is broken up sustainably, there would be a chance for a further rise to the range of $ 1.18 per euro.
WTI crude oil: WTI crude oil was unable to maintain its initial strength and plunged back to $ 45 a barrel. Technically speaking, the support range between $ 45-44 per barrel is a relevant zone. The upper limit is the zone between $ 54-55 per barrel.
S&P 500: After the strong dynamic rise, the US leading index is in a no less strong resistance area around 2,000 pts. And even above that the next resistance would not be far away, namely in a range between 2,050-2,070 pts Uptrend line and the 200 moving average together. Only then will it become clear whether this is just a recovery in the bear trend or whether the upward trend can be resumed.
Gold: Finally, a look at the gold price. As forecast correctly last week, this broke up from the tapering triangle. The gold price is currently in a strong resistance area between the two green horizontal lines. The price could still rise to the upper resistance line. If the price falls below that again, the increase may have ended at first.