Friday was generally dominated by safe haven flows running through the FX markets today although the stock markets remained relatively steady and bond yields were also largely unaffected (US10Y: 2.847%). In the currencies, the Jpy and the Swiss Franc both remained firm, while the commodity bloc currencies finished the week sharply lower, with the Aud and Nzd both hit particularly hard. The US$ ended slightly higher against the Euro, with the latter being pressured lower by the EU CPI, which was revised down to 1.1% yy in February, while core CPI was left unchanged at 1.0% yy.
In terms of US data on Friday, the Building Permits dropped to 1.30 mio annualised in February, while the Housing Starts dropped to 1.24 mio. Industrial production climbed by 1.1% mm in February while Capacity Utilisation rose to 78.1%. The Michigan Consumer Sentiment Index was higher than expected, at 102.00 (exp 99.30). All up a fairly solid set of data ahead of the upcoming FOMC meeting.
The metals were choppy heading into the weekend but remained above important support levels, while WTI climbed by 2% as investors chose to focus on geopolitical uncertainties that could disrupt global supplies, ignoring data showing that the number of US oil rigs resumed their advance and pointing to a potential uptick in U.S. oil output. The number of rigs operating in the U.S. rose by four to 800, according energy services firm Baker Hughes.
It will be a big week ahead, with Interest Rate Decisions to come from the Fed (Wed), BOE and the RBNZ (Thur), with the FOMC being the obvious focus, where a rate hike widely is expected. The BOE and RBNZ are expected to stay on hold. There will be plenty else besides, with the highlights being the RBA Minutes, UK CPI, and German/EU ZEW Economic Sentiment Survey – Tuesday, UK Unemployment – Wednesday, the EU/US Markit Flash Manufacturing/Services/Composite PMIs, IFO, UK Retail Sales – Thursday, BOE Quarterly Bulletin, US Durable Goods Orders – Friday. Have a good week.
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