China’s industrial production reaches seven month high

Fundamental Outlook THE US consumer prices rose at expected target. Building permits maintained as predicted while housing starts fell. China’s industrial production grew the fastest in 7 months while in the Eurozone, consumer prices stayed stagnated. The US consumer prices rose 0.2 per cent in February. Excluding the food and energies, core prices grew 0.2 per cent. Both reports matched the forecast.

The US retail prices slid 0.1 per cent in February. Excluding transport equipment, core prices rose 0.2 per cent but shortfall from expectation. Another report on producer prices expanded 0.2 per cent and lower than 0.4 per cent in January.

American weekly claims for jobless benefits ended 10 March was at 226,000 and matched forecast. Building permit for February at 1.30 million and matched expectation.

Housing starts fell to 1.24 million compared to 1.33 million in January.

China’s industrial production grew 7.2 per cent in February from a year ago, highest in past 7 months. Fixed asset investment made by the government in February grew 7.9 percent after gained 7.2 per cent in previous month.

Eurozone consumer prices rose 1.1 per cent in February on year basis. Industrial production slid 1.0 per cent in January on monthly comparison, worse than consensus.

Technical forecast

US dollar/Japanese yen is still moving sideways from 105.50 to 107.00 while making consolidation. This week, we expect not much change in market sentiment unless the trend violates beyond the aforementioned range. Risk control is advised in case in case of unforeseen circumstances.

Euro/US dollar traded near to 1.2250 area last week. Market is slowly narrowing and might attempt 1.2150 final support while waiting for FOMC outcome thiscoming Thursday. The range is expected to be contained from 1.2150 to 1.2350 regions before breaking beyond in either direction.

Pound/US dollar traded in a very tight range last week with no directional trend. This week, we forecast the market will react after mid-week to Dollar value and initiate a new headway. Initial range is expected to move from 1.3850 – 1.4050 region until we see a breakthrough.

Disclaimer: This article is written for general information only. No liability by the writer, publisher or any third party involved in the distribution of this work. Dar Wong is a registered fund manager in Singapore with 29 years of global trading experiences. You may reach him at dar@pwforex.com.