USD - Major events in the week ahead

Friday, Feb 20 2015

Events that marked the week:

In the Tuesday's US session Empire State Manufacturing Index figures were released. The February 2015 Empire State Manufacturing Survey indicates that business activity continued to expand at a modest pace for New York manufacturers. The headline general business conditions index edged down two points to 7.8. Analysts were predicting smaller decrease to 8.9.

Building Permits and Housing Starts figures were released on Wednesday. Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,053,000, slightly below market forecast of 1,070,000. This is 0.7% below the revised December rate of 1,060,000, but is 8.1% above the January 2014 estimate of 974,000. Single-family authorizations in January were at a rate of 654,000; this is 3.1% below the revised December figure of 675,000.

Privately-owned housing starts in January were at a seasonally adjusted annual rate of 1,065,000, in line with market predictions. This is 2.0% below the revised December estimate of 1,087,000, but is 18.7% above the January 2014 rate of 897,000.Single-family housing starts in January were at a rate of 678,000; this is 6.7% below the revised December figure of 727,000. The January rate for units in buildings with five units or more was 381,000.

However, the focus of the session was on FOMC Meeting Minutes. Latest FOMC Meeting Minutes showed that members are keen on keeping rates at zero "for a longer time," than wanted an earlier move, according to minutes from the January meeting released Wednesday that suggested the majority is in no real hurry to hike interest rates. "Many" on the Fed members said a premature rate hike would harm the recovery, while only "several" thought a later move would risk high inflation. The minutes show deep concern among Fed officials about dropping the guidance that it can be "patient" in hiking rates. Many Fed officials are worried that when the word "patient" is dropped, markets will think the Fed is poised to move on "an unduly narrow range of dates," the minutes said. This could create "undesirably tight" financial conditions.

Thursday brought Unemployment Claims and Philly Fed Manufacturing Index data. In the week ending February 14, the advance figure for seasonally adjusted initial claims was 283,000, a decrease of 21,000 from the previous week's unrevised level of 304,000. Analysts were anticipating decrease to 293,000. The 4-week moving average was 283,250, a decrease of 6,500 from the previous week's unrevised average of 289,750.

Philly Fed Manufacturing Index fell slightly, from a reading of 6.3 in January to 5.2 this month, missing market forecasts on an incline to 8.8 points. Half of the responding firms indicated there was no change in activity from January to February. The current new orders index fell 3 points, but the shipments and unfilled orders indexes turned positive and rose 15 and 16 points, respectively. The index for delivery times increased 6 points but remained negative, while the index for inventories rose 16 points.

This week markets will be looking at:

Existing Home Sales (Monday 16:00)

CB Consumer Confidence (Tuesday 16:00)

Fed Chair Yellen Testifies (Tuesday 16:00)

Fed Chair Yellen Testifies (Wednesday 16:00)

New Home Sales (Wednesday 16:00)

CPI/Core CPI (Thursday 14:30)

Durable Goods Orders (Thursday 14:30)

Unemployment Claims (Thursday 14:30)

Prelim GDP (Friday 14:30)

Chicago PMI (Friday 15:45)

Pending Home Sales (Friday 16:00)