Friday was a fairly rangebound session although the US$ came under downside pressure after some mixed data that saw the Capacity Utilisation, Industrial Production and New York State Empire Mfg Index all miss expectations. On the other side of the coin, the Michigan Consumer Sentiment Index was higher than expected.
Note that US Treasury yields dropped to their lowest levels since early January, weighed down by the generally soft data, and hinting that the Fed are likely to hold interest rates steady for the rest of the year (US10Y 2.592%, US2Y 2.442%). This does add to the theme that suggests that the US$ may remain under some downside pressure in the weeks ahead although China, the EU, UK, Australia etc all have growth problems of their own, so an overall choppy outlook seems likely.
In other data Eurozone CPI was finalised at 1.5% yy in February, in line with expectations, up from January’s 1.4% yy, while the Core CPI was finalised at 1.0%yoy, down from 1.1% yy.
Elsewhere, WTI was down by 0.3%, while Gold/Silver were up by 0.5%/0.8% respectively. The US stock indices closed about 0.5%/0.75% higher, underpinned by Chinese officials making hopeful comments about trade negotiations with the US, while Premier Li added that rate cuts in China may be employed to bolster economic growth.
The coming week will be dominated by Central Bank action, with interest rate decisions due from the Fed, BOE and SNB. No changes to policy are expected at all, and the action will come via the wordings of the relevant statements/press conferences. All are expected to be relatively dovish and a lot of attention will be paid to the Fed’s forward economic growth outlook.
Aside from the central banks activity, Brexit will remain front and centre attraction as the campaign for a second referendum seems to be gaining momentum. The nightmare continues!
Elsewhere, it looks like being a fairly quiet start to the week, with a rather empty calendar for today, while Tuesday may see a bit more action, beginning with the Australian House Price Index, followed by the RBA Minutes and a speech from the RBA’s Kent. Later on Tuesday, the EU will look for the German/EU ZEW Economic Sentiment Survey for guidance. Wednesday sees the UK CPI, PPI, RPI figures for February, as well as the Fed Interest rate decision, while Thursday will see the Australian Jobs data and RBA Quarterly Bulletin ahead of the busy European session, when the SNB and BOE will both hold their meetings. Finally, Friday will look to the flash EU/US PMIs for guidance. Have a good week.
Economic data highlights will include:
Mon: Japan Trade Balance, Industrial Production, Capacity Utilisation, EU Trade Balance, BuBa Monthly Report, NAHB US Housing Market Index
Tue: WBC NZ Q1 Consumer Confidence Survey, Australian House Price Index, RBA’s Kent Speech, RBA Minutes, UK Unemployment, German/EU ZEW Economic Sentiment Survey, EU Labour Costs, US Factory Orders, Global Dairy Trade Index, API Weekly Crude Oil Stock Inventory,
Wed: NZ Current Account, Australian WBC Leading Economic Index, RBA’s Bullock Speech, Japan Coincident Index, UK CPI, PPI, RPI, CBI Distributive Trade Survey FOMC Meeting/IR Decision/Projections
Thur: NZ Q4 GDP, Credit Card Spending, Australian Unemployment, BOJ Minutes, RBA Bulletin, EU Council Meeting, EU Economic Bulletin, SNB Interest Rate Decision, UK Retail Sales, BOE Meeting/Statement/Minutes/Vote Count/APP Facility, US Philadelphia Fed Mfg Survey, Jobless Claims
Fri: Japan CPI, BOE Quarterly Bulletin, EU/US Flash PMIs, US Existing Home Sales, Wholesale Inventories, Monthly Budget Statement
|INDICES / COMMODITIES|