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The dollar could be preparing for a new rally





Following the active growth observed in mid-February, the US currency came under pressure against the background of a softening of the Fed's rhetoric and positive expectations about making progress in the United States and China trade negotiations.


Does this mean that the strengthening of the greenback, which began in February last year, is nearing completion?


Investors expect the Federal Reserve to refrain from hiking interest rates in the current year, and are inclined to believe that the next step for the regulator may be to reduce the cost of borrowing, at least this is indicated by the futures quotations for the federal financing rate.


Meanwhile, the minutes of the last meeting of the US central bank show that it may not be such a "dove" as the markets believe. In any case, the prevailing views among FOMC members proceed from the fact that the regulator may have not yet completed the rate hiking process, but simply paused it.


In particular, the head of the Federal Reserve Bank of Atlanta, Raphael Bostic, believes that the Fed may raise the federal funds rate by 0.25% this year and by the same amount next year.


As for the trade negotiations between Washington and Beijing, the transaction may not take place at all, which will be one of the drivers for strengthening the greenback.


Here we should also add America's trade war against Europe, as well as the growing US public debt. In addition, one should not forget about the securities market, which may be on the "bearish" territory after the longest "bullish" cycle in history, which will again push global investors to US government bonds and the dollar.


Thus, based on the above, most likely, we should expect the next USD rally, within which the highest levels of November-February (around the mark of 97.50) will be tested.


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China Manufacturing PMI Slides To 49.2 In February





The manufacturing sector in China continued to contract in February, and at a faster rate, the latest survey from the National Bureau of Statistics revealed on Thursday with a manufacturing PMI score of 49.2.


That missed expectations for a score of 49.5, which would have been unchanged from the previous month. It also moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.


The bureau also said that its non-manufacturing PMI came in with a score of 54.3 in February - again shy of expectations for 54.5 and down from 54.7 in the previous month.


The composite index posted a score of 52.4, down from 53.2 a month earlier.


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Philippines Manufacturing Sector Slows In February - Nikkei





The manufacturing sector in the Philippines continued to expand in February, albeit at a slower rate, the latest survey from Nikkei revealed on Friday with a manufacturing PMI score of 51.9.


That's down from 52.3 in January, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.


Individually, new order growth was at its weakest in seven months but export orders rose for the first time since August.


Output and employment both increased at manufacturers, although stocks of finished goods fell for the first time in eight months during February.


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Australia January Building Approvals Advance 2.5%



The total number of building approvals consented in Australia climbed a seasonally adjusted 2.5 percent on month in January, the Australian Bureau of Statistics said on Monday - standing at 14,395.


That exceeded expectations for a gain of 1.5 percent following the 8.4 percent slide in December.


On a yearly basis, approvals plummeted 28.6 percent - which actually beat forecasts for a fall of 28.9 percent following the 22.5 percent drop in the previous month.


The number of consents issued for private sector houses was up 2.1 percent on month and down 6.6 percent on year at 9,423. The number of private sector dwellings excluding houses was up 2.7 percent on month and down 51.0 percent on year at 4,800.


The seasonally adjusted estimate of the value of total building approved rose 1.3 percent in January. The value of residential building fell 2.0 percent, while the value of non-residential building rose 6.4 percent.


Also on Monday, the ABS said that company operating profits in Australia were up a seasonally adjusted 0.8 percent on quarter in the fourth quarter of 2018.


That was well shy of expectations for a gain of 3.0 percent following the 1.9 percent increase in the three months prior. They were up 10.5 percent on year. Inventories fell 0.2 percent on quarter, missing forecasts for a gain of 0.3 percent following the 0.1 percent drop in Q3. They were up 1.0 percent on year. Wages and salaries were up 0.8 percent on quarter and 4.1 percent on year.


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Australia Has A$7.2 Billion Current Account Deficit In Q4





Australia had a seasonally adjusted current account deficit of A$7.2 billion in the fourth quarter of 2018, the Australian Bureau of Statistics said on Tuesday.


That exceeded expectations for a shortfall of A$9.1 billion following the A$10.7 billion deficit in the three months prior.


The surplus on goods and services fell A$781 million from A$2.022 billion in the third quarter to A$1.241 billion in the fourth quarter.


Net exports of gross domestic product fell 0.2 percent versus expectations for a fall of 0.1 percent following the 0.4 percent gain in Q3.


Australia's net IIP liability position was A$975.7 billion at 31 December 2018, an increase of A$36.5 billion on the revised 30 September 2018 position of A$939.1 billion.


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Australia Q4 GDP Advances 0.2% On Quarter





Australia's gross domestic product added a seasonally adjusted 0.2 percent on quarter in the fourth quarter of 2018, the Australian Bureau of Statistics said on Wednesday.


That was shy of expectations for an increase of 0.5 percent following the 0.3 percent gain in the three months prior.


On an annualized basis, GSP was up 2.3 percent - again missing forecasts for 2.6 percent and down from 2.8 percent in the previous quarter.


"Growth in the economy was subdued, reflecting soft household spending and a decline in dwelling investment," ABS Chief Economist Bruce Hockman said. "The approvals for dwelling construction indicate that the decline in dwelling investment will continue."


Household spending grew 0.4 percent, reflecting a continuation of modest spending in recent quarters. Investment in dwellings fell 3.4 percent.


Falls in private investment dampened growth in the quarter. This was consistent with the decline in construction industry value added, falling 1.9 percent. Services industries supporting construction activity detracted from growth with professional scientific and technical services industry value added declining for the first time in three years.


Mining investment fell in the quarter as significant projects transitioned from the construction to the production phase. This is reflected in oil and gas production, which grew 7.7 percent.


Public demand sustained growth in the quarter. Public investment remained at high levels with State and Local government growth of 6.3 per cent reflecting continued work on a number of large infrastructure projects.


Government final consumption expenditure grew 1.8 percent, with ongoing expenditure in health, aged care and disability services. This investment translates to ongoing strength from the healthcare industry, which remains the largest contributor to economic growth.


Terms of trade rose 3.1 percent.


"As the economy transitions out of the mining boom, investment has remained strong with major public works driving growth around Australia," Hockman said.


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Australia January Trade Surplus A$4.549 Billion





Australia posted a seasonally adjusted merchandise trade surplus of A$4.549 billion in January, the Australian Bureau of Statistics said on Thursday.


That exceeded expectations for a surplus of A$2.90 billion and was up A$780 million from the upwardly revised A$3.769 billion surplus in December (originally A$3.681 billion).


Exports were up 5.0 percent on month or A$1.901 billion to A$39.937 billion in January from A$38.036 billion in the previous month.


Non-monetary gold rose A$1.373 billion, while non-rural goods rose A$396 million (2 percent) and rural goods rose A$97 million (2 percent).


Net exports of goods under merchanting fell A$12 million (33 percent) and services credits rose A$46 million (1 percent).


Imports picked up 3.0 percent or A$1.121 billion to A$35.388 billion from A$34.267 billion a month earlier.


Capital goods rose A$737 million (12 percent), while consumption goods rose A$483 million (6 percent) and intermediate and other merchandise goods rose A$157 million (1 percent).


Non-monetary gold fell $65 million (13 percent) and services debits fell A$191 million (2 percent).


Also on Thursday: .


The ABS said that the total value of retail sales in Australia was up a seasonally adjusted 0.1 percent on month in January, coming in at A$27.018 billion. That was shy of expectations for a gain of 0.3 percent following the 0.4 percent decline in December.


Individually, there were gains in food retailing (0.3 percent), cafes, restaurants and takeaway food services (0.2 percent), and clothing, footwear and personal accessories retailing (0.1 percent). Other retailing (0.0 percent) was relatively unchanged, while household goods retailing (-0.2 percent), and department stores (-0.4 percent) fell in January. .


The construction sector in Australia continued to contract in February, albeit at a slower pace, the latest survey from the Australian Industry Group revealed on Thursday with a Performance of Construction Index score of 43.8.


That's up from 43.1 in January, although it remains well beneath the boom-or-bust line of 50 that separates expansion from contraction.


In all, the sector has been in contraction for six straight months.


Individually, activity, employment, new orders, supplier deliveries and selling prices were all firmly in contraction. Input prices and average wages continued to expand, although at a slower rate.


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ECB maintains super-soft monetary policy





The European Central Bank (ECB) has postponed the interest rate hike for an indefinite period, which means that the slowdown in economic growth in the eurozone has surpassed the calculations of experts.


According to the ECB, the interest rate will remain unchanged until the end of 2019, the previous forecast assumed it would maintain the current rate until September 2019. Since March 2016, the ECB's key refinancing rate is zero.


The ECB's previous forecast assumed an interest rate increase at any time from September 2019. However, after the publication of the economic indicators of Germany and Italy for the fourth quarter of 2018 and weak results at the beginning of the current year, tightening monetary policy seems to be a premature measure.


The problem is that the ECB Chairman Mario Draghi is trying to complete the program of ultra-soft monetary policy, which for the last ten years has supported the project of the single European currency. On the other hand, the European regulator needs to take measures to resume the region's slowing economic growth.


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Japan M2 Money Stock Climbs 2.4% On Year In February





The M2 money stock in Japan was up 2.4 percent on year in February, the Bank of Japan said on Monday - coming in at 1,010.1 trillion yen.


That was in line with expectations and up from the downwardly revised 2.3 percent in January (originally 2.4 percent).


The M3 money stock was up an annual 2.1 percent for the fourth straight month, matching expectations at 1,343.1 trillion yen.


The L money stock was up 2.1 percent on year at 1,789.5 trillion yen, accelerating from the 1.9 percent gain in the previous month.


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What is waiting for the dollar this week, and what data should be considered carefully




This week, the dollar started, almost came close to a three-month high, as investors continued to give preference to the greenback amid fears of global growth. The dollar index against a basket of six major currencies grew by 0.1 percent, to 97.412 points, just this year the figure rose 1.3 percent. There is no good news for the euro. Last week, the euro currency fell to its weakest level since June 2017, after officials at the European Central Bank changed their hawkish tone to dovish. After the bank significantly reduced its forecast for growth in the eurozone, and also because of weaker-than-expected Chinese export and import data, concerns about the weakness of the global economy are resuming. This instantly puts pressure on the euro and other currencies, except the dollar, which is relatively strong as long as the US economy maintains its pace.


However, there are also alarming signals: employment growth almost stopped in February, as the world's largest economy created only 20,000 jobs, which is much less than what analysts expected. But traders also found positive news, the employment rate in the US fell below 4 percent, and the average hourly wage increased by 0.4 percent, which will help reduce the dollar's loss.


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