USD
February retail sales came in at -0.2% m/m vs 0.3% m/m as expected. Ex autos category came in at -0.4% m/m vs 0.3% m/m as expected.
ISM manufacturing PMI for the month of March came in at 55.3 vs 54.5 as expected. Beating on the reading and higher than previous number of 54.2. New orders, employment and prices paid components of the reading all heftily beat the previous reading. ISM non-manufacturing PMI came in at 56.1 vs 58 as expected. Considerable drop in new orders but the index is still at very high levels. Preliminary February durable goods came in at -1.6% vs -1.8% as expected. Non-defence ex air category came in at -0.1% vs 0.1% as expected. Mixed bag of data with numbers close to expectations.
NFP headline for the month of March came in at 196k vs 177k as expected, above 6-month average of 190k showing that February number was just a one-off. The unemployment rate stayed at 3.8%. Participation rate dropped to 63% from 63.2 the previous month and average hourly earnings dropped as well to 3.2% y/y from 3.4% y/y the previous month. Employment in manufacturing sector came in negative 6k vs 10k as expected for the first decline in the sector since October 2016. Drop in earnings will have negative impact on USD.
This week we will have data on factor orders, inflation, budget balance and FOMC minutes that should give us more insight into FED’s decision process.
Important news for USD:
Monday:
Factory Orders
Wednesday:
CPI
FOMC Minutes
Federal Budget Balance
EUR
Preliminary CPI for the month of March came in at 1.4% y/y vs 1.5% y/y as expected. Core CPI number came in at 0.8% y/y vs 0.9% y/y as expected with prior reading showing 1% y/y. Inflation is moving in the opposite direction from the targeted 2% rate. Drop in core reading is especially worrisome. The unemployment rate came in as expected at 7.8% but the fall in unemployment is still not translating into a rise in inflation as the figures above demonstrate. Final services PMI for the EU came in at 53.3 vs 52.7 preliminary. Better reading was propped by big gains in Italy and Spain. February retail sales came in at 0.4% m/m vs 0.3% m/m as expected and 2.8% y/y vs 2.3% y/y as expected giving some uplift to Q1 economic conditions. German factory orders came in at -4.2% m/m vs 0.3% m/m as expected. Abysmal reading showing the biggest drop in last 2 years. German GDP growth forecast was cut by the leading five economic institutes in Germany to 0.8% from previous forecast of 1.9%. ECB minutes show that ECB’s view was that solid growth will return later in 2019. Industrial production came in at 0.7% m/m vs 0.5% m/m as expected due to the jump in construction activity alleviating some pressures from German economy.
This week we will have data on industrial production, European Summit deciding on Brexit extension and centre stage will be taken by ECB interest rate decision and press conference by Governor Draghi later on. Interest rate is expected to stay the same but due to mixed data coming in from the EU (Services PMIs and retail sales are up, inflation, manufacturing PMI and German factory orders are down) we may see further downgrades to economic outlook.
Important news for EUR:
Wednesday:
European Summit
ECB Interest Rate Decision
ECB Monetary Policy Press Conference
Friday:
Industrial Production
GBP
Manufacturing PMI for the month of March came in at a whopping 55.1 vs 51.2 as expected. On the surface it looks like a huge beat however stockpiling due to Brexit uncertainty produced this high reading. Stocks of purchases component came in at 66.2 which is a new G7 record. Services PMI dropped to contraction territory coming in at 48.9 vs 50.9 as expected which brought composite PMI down to 50. Right on the edge.
According to the model created by Goldman Sachs that measures costs has UK suffered due to Brexit, they amount to £600m per week since 2016 referendum and total nearly 2.5% of GDP. Parliament voted in favour of a bill that would block a no-deal Brexit (by one vote) suggesting that PM May will have to ask for an extension beyond April 12. EU will not accept another short extension of Article 50. The options from EU standpoint are to accept current deal or to take a long extension until the end of the year or March 2020. PM May has sent a letter to the EU proposing a Brexit extension until June 30 with an option for terminating the period early if any deal regarding UK leaving is ratified before this date.
This week we will have data on GDP, industrial, manufacturing and construction output as well as trade balance. We will also have continuation of Brexit saga in last week before the deadline on Friday April 12.
Important news for GBP:
Wednesday:
GDP
Industrial Production
Manufacturing Production
Construction Output
Trade Balance
AUD
Official manufacturing PMI for the month of March came in at 50.5 vs 49.6 as expected while services came in at 54.8 vs 54 as expected. Caixin manufacturing PMI for the month of March came in at 50.8 vs 50 as expected. Manufacturing goes back to expansion after 4 months which is great news indicating that stimulus measures are producing an impact. Caixin services PMI came in at 54.4 vs 52.3 for a big jump which also pulled composite PMI to 52.9.
RBA has left cash rate at 1.5% as widely expected citing strong labour market and dropping of the unemployment rate to 4.9% which led to some increase in growth of wages. Continued improvement in the labour market is expected to lead to further rises in wages, although this is expected to be a gradual process. They state that global growth has slowed down and that downside risks have increased. Rather weak growth in household consumption is caused by periods of weakness in real household income and the adjustment in housing market.
The budget for 2019-20 has been announced and it shows a surplus of AUD7.1bn. GDP growth is seen at 2.75% and CPI is seen at 2.25%. There is a proposal for AUD158bn in tax cuts over the next 10 years to provide some help for Australian consumer.
Retail sales for the month of February came in at 0.8% m/m vs 0.3% m/m as expected for a huge beat. Seems like RBA had this info so they decided not to go for dovish stance in their statement. Trade balance for the same month came in at AUD4.81bn vs AUD3.7bn. Surplus continues to grow but it was spurred by lower imports that came in at -1% m/m while exports were unchanged.
This week we will have RBA financial stability review and speech from deputy governor Debelle. From China we will get data on inflation and trade balance.
Important news for AUD:
Wednesday:
RBA Deputy Governor Debelle Speech
Thursday:
CPI (China)
Friday:
Trade Balance (China)
Exports (China)
Imports (China)
RBA Financial Stability Review
NZD
GDT price index came in at 0.8% for a ninth consecutive auction with gains in a row.
This week we will have data on electronic card retail sales and manufacturing index.
Important news for AUD:
Friday:
Electronic Card Retail Sales
BusinessNZ Manufacturing Index
CAD
Governor Poloz emphasized BOC data dependence when it comes to a decision regarding rates. Current data shows a “mixed picture” that must be carefully monitored. Outlook continues to warrant rates that are below neutral range. BOC is not forecasting a recession and we may need to get accustomed to seeing curve inversion more often. He considers core inflation close to 2% a big success. Ivey PMI for the month of March came in at 54.3 vs 50.6 the previous month. Another beating from Canadian data.
Net change in employment for the month of March came in negative 7.2k vs 6k as expected. Both full-time and part-time employment were negative with former coming in at -6.4k and later coming in at -0.9k. Average hourly rate came in at 2.3% y/y vs 2.2% y/y as expected. This was the first drop in employment change in 7 months with private sector leading the way with -17.3k jobs. Rising wages will be welcomed by BOC.
This week we will have data on housing.
Important news for CAD:
Monday:
Housing Starts
Building Permits
JPY
Tankan survey results came in worse than expected showing that sentiment among the largest producers softened while capex barely beat the forecast. Final Nikkei manufacturing PMI for the month of March came in at 49.2 vs 48.9 preliminary. Demand remains weak pulling the output lower. Nikkei services PMI also came in weaker than expected at 52.0.
Household spending for the month of February came in at 1.7% y/y vs 1.9% y/y due to dreadful earnings. Labour cash earnings came in at -0.8% y/y vs 0.9% y/y as expected for the second straight y/y drop. Real cash earnings came in at -1.1% y/y vs 0.8% y/y as expected. Downward spiral of lower earnings which leads to lower consumption will not be able to lift inflation towards magical target of 2%.
This week we will have data on consumer confidence and machinery orders as well as speech from BOJ governor Kuroda.
Important news for JPY:
Monday:
Consumer Confidence
Wednesday:
BOJ Governor Kuroda Speech
Machinery Orders
CHF
Retail sales in February came in at -0.2% y/y vs -0.4% y/y as expected and 0.3% m/m. Overall consumption remains sluggish, not showing much confidence in Swiss economy. SNB has reiterated their pledge to intervene in the FX market if necessary and added that negative rates are essential for Swiss economy. Both headline and core CPI for the month of March came in at 0.5% y/y vs 0.4% y/y as expected. This small beating will be well received by SNB, especially rise in the core number, however numbers are still far from targeted 2% level.
This week we will have employment data.
Important news for CHF:
Tuesday:
Unemployment Rate
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