How to Start the Week: Analytics and Forecasts — 17.08.2020

Fundamental Analysis and Forecasts for the Future

The US has convened for at least a few weeks after failing to reach an agreement on a new stimulus package. The lack of a deal may lead to some uncertainty in the U.S. markets and USD currency pairs as a result.


Economic calendar

New housing starts and building permits data will be released on Tuesday the 18th in the U.S. These figures give some good insight into the level of optimism for American families as they decide on whether to buy/build new homes. Positive news will likely spur investors in the U.S. markets.

Wednesday the 19th will see the release of European inflation numbers Year on Year and Month on Month. Most forecasts show a slight increase, but be watchful for anything outside the forecast to drive markets up or down.

Assets for trading: USD/CAD, NZD/USD, AUD/USD.


Must know

With Friday’s EU GDP numbers in the books and on target compared to forecasts, look for the European news that may send markets one way or another. The GDP numbers aren’t good, but they came in as expected.

The announcement this week on a Covid-19 vaccine created in Russia was already reported by use earlier this week, but look for news related to nations that announce a resumption of normal enterprise operations.

Turkey’s finance minister finally concedes that the country has economic growth problems. The International Monetary Fund (IMF) forecasted Turkey’s economy would shrink by 5% for 2020, but Turkey railed against the prediction as politically biased. It appears that the IMF was actually on point.

China’s retail sales have fallen for a 7th consecutive month indicating that their economy continues to sputter despite hefty efforts on the part of the Beijing government.


A Fundamental View


The dollar is weakening against nearly every major currency in the world. This news is sounding alarms with many international banking houses.


A weaker dollar means less USD movement into foreign economies, many of which are highly dependent on the US greenback.

Apple and Tesla

Tesla and Apple are both moving forward with multiple share splits of their stock for late August. Tesla’s split will be 5 shares to 1 and Apple will offer 4 to 1.

While the total value upon splitting doesn’t change, it will allow for more investors to buy the expensive shares, thus driving prices higher before and after the split.


Oil Prices hit 6 month highs this week with news of continued drops in US inventories. However, these U.S. stock numbers have been misreported on dozens of occasions already this year with adjustments coming later.


Additionally, Saudi Arabia and other producing nations have hinted at increases in production, which would add more oil on an already saturated market. Look for a drop in prices.


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