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    Weekly Technical Analysis Report week 09/03/2015

    In Europe. Stronger growth in the euro-area economy at the end of last year was driven by private consumption and foreign trade.

    Gross domestic product rose 0.3 percent in the fourth quarter after expanding 0.2 percent in the previous three months, the European Union’s statistics office in Luxembourg said Friday, confirming a Feb. 13 estimate. Household consumption and investment increased 0.4 percent each, while exports were up 0.8 percent. The currency bloc’s economy is making progress in overcoming its longest-ever slump, with European Central Bank stimulus set to spur the fastest growth since 2007 and a return of inflation to the ECB’s goal within three years. ECB President Mario Draghi has claimed victory for his 1.1 trillion-euro ($1.2 trillion) quantitative-easing program that will commence Monday. Household consumption added 0.2 percentage point to economic growth in the fourth quarter, investment contributed 0.1 percentage point and exports bolstered output by 0.4 percentage point, according to the report. Imports and inventory changes subtracted 0.2 percentage point each.

    Economic sentiment in the euro area rose to a seven-month high in February, unemployment fell to its lowest since April 2012 in January -- albeit still a hefty 11.2 percent -- and a contraction in bank lending to companies and households has almost halted. The ECB lifted its growth forecast for this year to 1.5 percent from 1 percent, for 2016 to 1.9 percent, and projected 2.1 percent in 2017. The economy hasn’t expanded faster than 2 percent since 2007. Consumer prices are projected to be flat over the whole of 2015, and inflation should average 1.5 percent next year and 1.8 percent in 2017. The ECB’s goal is just below 2 percent, a level not seen since early 2012.

    Greece sent its euro zone partners an augmented list of proposed reforms on Friday but EU officials said several more steps were required before any release of aid funds to a country that Prime Minister Alexis Tsipras says has a noose around its neck. Struggling to scrape together cash and avoid possible default, Athens made a 310 million euro partial loan repayment to the International Monetary Fund, while Tsipras pleaded to be allowed to issue more short-term debt to plug a funding gap. Greece is running out of options to fund itself despite striking a deal with the euro zone in February to extend its EU/IMF bailout by four months. European Central Bank President Mario Draghi has refused to raise a limit on Athens' issuance of three-month treasury bills which Greek banks buy with emergency central bank funds. He said on Thursday the EU treaty prohibited indirect monetary financing of governments.

    Government bonds across the euro area advanced, sending yields to record lows, as investors absorbed details of the European Central Bank’s extended sovereign debt-purchase program. The rate on securities from Spanish two-year notes to Belgian 30-year bonds dropped to all-time lows after ECB President Mario Draghi said Thursday the euro area’s national central banks will start buying the bonds of their home markets from March 9. Euro-region securities pared their gains and German bunds fell after a U.S. report showed employers added more jobs in February than economists forecast, damping demand for fixed-income assets.

    German industrial production rose for a fifth month in January in a sign that the momentum in Europe’s largest economy is strengthening. Output, adjusted for seasonal swings, was up 0.6 percent in January after a revised 1 percent gain in December, a report from the Economy Ministry in Berlin showed Friday. The increase in the typically volatile figures compares with a median estimate of a 0.5 percent gain in a Bloomberg News survey. Production climbed 0.9 percent from a year earlier. German economic growth accelerated in the fourth quarter as lower oil prices and a weaker euro boosted consumption and underpinned business confidence. While factory orders declined more than analysts predicted at the beginning of the year, large-scale asset purchases by the European Central Bank will provide further stimulus.

    In U.S.A. A robust U.S. jobs report raised concern in markets that the Federal Reserve may raise interest rates sooner than previously thought, knocking U.S. stock and bond prices lower on Friday. News the U.S. unemployment rate hit a 6-1/2-year low in February fed into the dollar's winning streak, propelling it to a fresh 11-1/2-year peak against a group of currencies and a similar high against the euro. The U.S. Labor Department said on Friday employers added 295,000 workers in February, beating a forecast increase of 240,000. It was the longest run of 200,000-plus increases since 1994. The jobless rate dropped to 5.5 percent from 5.7 percent in January. The data suggested the U.S job market continued to strengthen, although the drop in the jobless rate largely reflected people leaving the labor force. Average hourly earnings rose by three cents last month. Average hourly earnings were up 0.5 percent in January, the biggest increase since 2008. However, that followed on the heels of a surprisingly steep drop of -0.2 percent in December. With the top line number of new jobs on a strong upward trajectory, we know that jobs are being added, but what many economists really want to see is more improvement in workers' wages and hours. In February, average hourly earnings rose 0.1 percent, month-to-month, or 3 cents to $24.78. Year-over-year, that's a rise of 2.0. The average length of the workweek remains unchanged at 34.6 hours.

    In Asia. Asian currencies fell this week, led by the Malaysian ringgit’s slide to a six-year low, as a weakening growth outlook for China dimmed prospects for regional trade. China set the lowest economic expansion target in more than 15 years after cutting interest rates for the second time in three months at the weekend. Chinese authorities laid out plans for economic growth of about 7 percent in 2015 at the annual meeting of the legislature in Beijing Thursday as they contend with a property slump, excess industrial capacity and disinflation. The People’s Bank of China announced a cut of a quarter percentage point each in its key lending and deposit rates. The yuan climbed 0.11 percent in the past five days after the nation’s leaders pledged stability for the currency and said they would encourage its global use.

    On the Commodities markets . Brent crude oil steadied above $60 a barrel on Friday as a stronger dollar balanced worries over the impact of fighting in Libya and Iraq on Middle East and North African oil production. The dollar hit an 11-and-a-half-year high against a basket of currencies on Friday after strong U.S. jobs data boosted expectations of a sooner-than-expected interest rate rise in the world's largest economy. Brent LCOc1 was down 5 cents a barrel at $60.43 by 9.50 a.m. ET. U.S. light crude CLc1 was down 40 cents at $50.36.

    CAD was the strongest currency against USD, which in a global scenario where all the majors have been weaker, depreciated by -0.92% on Friday (weekly basis), while USDCAD reached daily high at 1.2623. CHF was the weakest currency against greenbacks, depreciated by -3.14% and USDCHF rallied to 0.9852 area.


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