12 Feb 2015
USD index a strong buy into 94.0 – Westpac
FXStreet (Barcelona) - Richard Franulovich of Westpac, comments on the data and key events ahead for US, further adding that the USD might see a minor pullback if EZ PMIs come out strong, but the overall bullish outlook stays apt.
Key Quotes
“The US data calendar picks up pace in the week ahead, with a bevy of Feb surveys including Empire, Philly Fed, Markit and NAHB reports due, along with housing starts, PPI and IP data (all for Jan).”
“The minutes for the Fed’s 27-28 Jan meeting are out Wed.”
“With the notable exception of Jan payrolls most US data points in recent weeks, especially the business surveys have been edging lower. That trend seems set to continue with the first of Feb surveys due next week as the higher USD and limp global growth conditions continue to weigh.”
“US rates markets for one thing seem unperturbed by the recent trend of softer US business surveys – the EUUS2yr spread for example has pushed sharply back in the USD’s favour in Feb.”
“The Fed minutes next week should keep alive and possibly strengthen mid-2015 Fed rate hike expectations. If the minutes in any way reflect the tenor of the Jan statement they should accentuate the positives, recalling the Fed upgraded the expansion to “solid” in Jan.”
“The USD may see a minor pullback if Grexit risk fades and the EZ Jan PMIs firm, as seems likely judging by recent signs of activity stabilization, but these are likely to prove minor USD negatives. USD index a strong buy into 94.0.”
Key Quotes
“The US data calendar picks up pace in the week ahead, with a bevy of Feb surveys including Empire, Philly Fed, Markit and NAHB reports due, along with housing starts, PPI and IP data (all for Jan).”
“The minutes for the Fed’s 27-28 Jan meeting are out Wed.”
“With the notable exception of Jan payrolls most US data points in recent weeks, especially the business surveys have been edging lower. That trend seems set to continue with the first of Feb surveys due next week as the higher USD and limp global growth conditions continue to weigh.”
“US rates markets for one thing seem unperturbed by the recent trend of softer US business surveys – the EUUS2yr spread for example has pushed sharply back in the USD’s favour in Feb.”
“The Fed minutes next week should keep alive and possibly strengthen mid-2015 Fed rate hike expectations. If the minutes in any way reflect the tenor of the Jan statement they should accentuate the positives, recalling the Fed upgraded the expansion to “solid” in Jan.”
“The USD may see a minor pullback if Grexit risk fades and the EZ Jan PMIs firm, as seems likely judging by recent signs of activity stabilization, but these are likely to prove minor USD negatives. USD index a strong buy into 94.0.”