USD - Major events in the week ahead

Friday, Feb 26 2016

Events that marked the week:

On Tuesday CB Consumer Confidence and Existing Home Sales figures were released. The Conference Board Consumer Confidence Index, which had increased moderately in January, declined in February. The Index now stands at 92.2, down from 97.8 in January. Analysts were anticipating decrease to 97.0. The Present Situation Index declined from 116.6 to 112.1, while the Expectations Index decreased from 85.3 to 78.9 in February. “Consumer confidence decreased in February, after posting a modest gain in January,” said Lynn Franco, Director of Economic Indicators at The Conference Board.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, inched 0.4 percent to a seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December. Sales are now 11.0 percent higher than a year ago – the largest year-over-year gain since July 2013 (16.3 percent).

Wednesday brought only New Home Sales figures. Purchases of new homes dropped more than forecast in January as contract signings slumped in the western U.S. by the most since May 2010. Sales declined 9.2% to a 494,000 annualized pace after a 544,000 rate in December that was the strongest in 10 months, Commerce Department data showed Wednesday. The median forecast of economists called for 520,000. Sales in the West fell 32.1%.

Thursday's session was marked by Durable Goods Orders and Unemployment Claims figures. Orders for U.S. capital goods rebounded in January by the most since June 2014, representing a pause in manufacturing’s downturn. Bookings for non-military equipment excluding commercial aircraft jumped 3.9%, more than forecast, after a 3.7% decrease in December that was smaller than previously reported, data from the Commerce Department showed Thursday. Orders for all durable goods rose 4.9%, the most since March. Analysts were anticipating 3.0% increase.

In the week ending February 20, the advance figure for seasonally adjusted initial claims was 272,000, an increase of 10,000 from the previous week's unrevised level of 262,000, in line with market forecasts. The 4-week moving average was 272,000, a decrease of 1,250 from the previous week's unrevised average of 273,250.

Focus of the Friday's session was on GDP and Consumer Confidence figures. In the US GDP and Revised Consumer Confidence figures were published. US GDP increased at an annual rate of 1.0% in the fourth quarter of 2015, according to the "second" estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 2.0%. The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), residential fixed investment, and federal government spending that were partly offset by negative contributions from exports, nonresidential fixed investment, state and local government spending, and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased.

Consumer purchases climbed in January by the most in eight months, fueled by faster earnings growth and indicating the biggest part of the U.S. economy gained momentum at the start of 2016. The 0.5% advance followed a 0.1% gain the prior month, a Commerce Department report showed Friday. The January figure exceeded the 0.3% median forecast in a Bloomberg survey. Incomes also climbed 0.5%, more than projected. Consumer Confidence also rose from Prelim reading to 91.7.

This week markets will be looking at:

Chicago PMI (Monday 15:45)

Pending Home Sales (Monday 16:00)

ISM Manufacturing PMI (Tuesday 16:00)

ADP Non-Farm Employment Change (Wednesday 14:15)

Unemployment Claims (Thursday 14:30)

ISM Non-Manufacturing PMI (Thursday 16:00)

Non-Farm Employment Change/Unemployment Rate/Average Hourly Earnings (Friday 14:30)

Trade Balance (Friday 14:30)

More in this category: « U.S. Consumer purchase up by 0.5% Australian company profits sank 2.8% in Q4 »