FX News Today

European Outlook: Asian stock markets moved broadly higher, following on from gains on Wall Street yesterday amid a rebound in oil prices. The front end WTI Nymex future has moved off highs, but remains comfortably above USD 41 per barrel and with the USD strengthening Japanese markets were also supported by a weaker Yen. The EUR has fallen below 1.14 to the USD and U.S. and European stock futures are also higher, pointing to opening gains on European markets and ongoing pressure on core bond futures. Italian banks will remain in the spotlight, after yesterday’s disappointment over Italy’s bad bank plan led to a sell off in Italian bank stocks. The calendar has ECBspeak from Knot, Nowotny and Constancio and data includes final inflation readings from Spain and France

UK inflation data came in perkier than expected: Rising to a cycle high of 0.5% y/y in the March headline CPI rate, up from February’s 0.3% and above the median forecast for 0.4%. Core CPI jumped to 1.5% y/y from 1.2% previously. Airfares and clothing drove the index higher, offsetting weakness in food and petrol prices. The impact of sterling weakness is likely to have started having some impact. From March 2015 to March this year the GBP lost over 3% versus the dollar and against the euro (a better proxy of the trade-weighted value of sterling) over 9%. Cable traded as high as 1.4330 following the news, but USD strength overnight sees the pair at 1.4245 currently.

Fedspeak, Harker & Williams: Harker warned that it’s possible there will still be 3 hikes this year, depending on GDP numbers. He doesn’t see much slack in the labor market and doesn’t want to see the Fed running much above the 2% target inflation rate. Harker warns that if energy prices rebound more quickly, it is possible that the Fed will have to be more aggressive on rates. Later, Williams said that the he wasn’t that concerned about a hard landing for China, with the U.S. economy doing “quite well,” though the Fed must take into account what happens abroad. He also commented that the worst-kept secret is the Fed’s plan to raise rates, as the Fed is trying to telegraph the path of U.S. rates so the rest of the world can better prepare. Meanwhile, he’s not seeing big capital flight from emerging economies as the Fed talks about rate hikes.

Italy defends bank rescue plan: As investors mark their disappointment by selling off bank stocks, with even Intesa SanPaolo, Unicredit and Ubi Banca, closing down between 4 and 5% Tuesday. There concerns that the plan, which is based on a EUR 5 bln bad bank fund, is not ambitious enough to clear up Italy’s financial system and help mitigate losses from the large number of non performing loans in Italy’s banks. Bank of Italy’s Rossi said in an interview with La Repubblica that the new fund aims to resolve banking sector problems and Padoan told Sole that the ECB views the fund favourably.

 

Main Macro Events Today

•   US Retail Sales  March retail sales are expected to show a flat headline (median 0.1%) with a 0.3% (median 0.4%) ex-autos increase when the data is released on Wednesday. Retail sales declined in both January and February with the January headline down 0.4% and February down 0.1%. We expect some downside risk to the release from depressed chain store sales and vehicle sales declines.

• US (PPI) March PPI is out later today and should post a 0.2% (median 0.3%) increase with the core up 0.1% (median 0.1%). This follows a -0.2% headline and unchanged core rate in February. Oil prices have begun to rebound and this showed up in today’s March trade price index where import prices managed to improve 0.2% after a long run of declines.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

European Outlook: Asian stock markets outside of China are mostly higher, led by a rebound in Japan, where markets benefited from a weaker Yen and the BoJ’s decision to tweak the calculation for negative rates, which underpinned bank stocks amid hopes that the negative rate portion of bank reserves will be lower than feared. Oil prices are off earlier highs, but the front end WTI future is holding above USD 40 per barrel. US stock futures are also moving higher, but UK futures are down, with the U.K. continuing to underperforming amid Brexit fears. Released overnight. BRC retail sales came in much weaker than expected and unexpectedly contracted, which will add to pressure on the FTSE 100 ahead of the release of March inflation data today.

Tensions between ECB and Germany intensify: Finance Minister Schaeuble’s unusually clear comments on ECB policy saying that “there is a growing understanding that excessive liquidity has become more a cause than a solution to the problem” a reflection of a growing agreement among German policy makers that it is time to publicly distance themselves from Draghi’s negative interest rates policy. With the right wing AFD, which originally was founded on an anti-EMU platform gaining more and more support and German savers enraged by dwindling returns on private retirement funds, they were lured into by a public campaign trying to reduce pressure on the PAYG pension system, Merkel is under pressure to at least be seen as trying to reign in Draghi’s spending spree. Not that Germany questions the ECB’s independence, rather as with the OMT program, there are increasing doubts that the ECB is acting within its mandate. Even if a court dispute between German and the ECB is highly unlikely with the ECB heavily relying on investor trust in Germany as the stability anchor of the Eurozone, an open conflict between the central bank and the Eurozone’s largest economy could easily rekindle the debt crisis once again.

Kaplan Speech: He remains skeptical about negative rates, which can hurt banking, money and commercial paper markets, and he hopes the U.S. will avoid that trap. He said the “living will” process necessary if onerous and challenging to big banks. He expects global energy supply to exceed demand through the end of this year, leading to more volatility in the oil-gas industry, including bankruptcies and more restructuring until H1 2017. (He is the president of the Dallas Fed and should know better than most). However, he does expect the headwinds from the strong dollar to fade. Kaplan does not expect planned rate hikes to shift the Treasury yield curve significantly, nor lead to Fed portfolio losses.

The Debate on NIRP heats up: The ongoing controversy over Negative Interest Rate Policy (NIRP) continued in several articles circulating, with IMF’s Largarde defending the utility of negative rates in a blog post that suggested that lending and risk taking will increase. But Bill Gross of Janus said in a Barron’s article that savers would move into cash and could in fact hoard savings to compensate for the lack of returns from pension and insurance funds, and that could result in their ultimate demise. Larry Fink of Blackrock agreed in the FT that in the case of negative rates savers will divert funds into more savings, rather than less. The WSJ also pointed out the underperformance of banks in this environment heading into peak earnings season for banks.

 

Main Macro Events Today

• UK Consumer Price Index  Headline CPI is expected to tick higher, to +0.4% (median same) from 0.3% in the month previous. The core CPI reading is also seen nudging up, to +1.4% y/y from 1.3%. PPI is expected.

• US Import and Export Prices March trade price data should show import prices up 1.6% with export prices down 0.2%. This follows February figures which had import prices down 0.3% and export prices down 0.4%. WTI prices improved in March which should help prop up import prices after a steady string of declines. Despite the increase, oil prices still remain at depressed levels so they could pose some continued downside risk.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

JPY Remains Centre Stage: The surging yen continued yesterday and into the US open before giving up some of its strong gains over night, but the momentum and sentiment is clearly still with the YEN. The USDJPY traded to a low of 107.82 a figure not seen since October 2014 (just before the BOJ increased its QE programme substantially). EURJPY fell to a low of 122.56 and the GBPJPY 151.89. There were public pronouncements from Chief Cabinet Secretary Yoshihide Suga again yesterday that “We’re watching the foreign exchange market with a sense of tension,” adding that “the government believes excessive and disorderly movements in the exchange rate have a negative effect.”. However, with Japan hosting the next G7 meeting next month it’s unlikely (but far from certain) that the BOJ will intervene to weaken the surging currency. Only time will tell.

German trade surplus widens as export growth picks up. Germany posted a  (sa) trade surplus of EUR 19.7 bln in February, up from EUR 18.7 bln in January, with exports rebounding 1.3% m/m, after the -0.8% m/m drop at the start of the year. Import growth meanwhile moderated to 0.4% m/m from 1.3% m/m. Accumulated data for the three months to January still show a decline in the three months trend, which confirms that the overall economy cannot rely on net exports to generate growth, as global headwinds get stronger. Unadjusted data show a slight widening of the current account surplus in the first two months of the year, compared to 2015, but the trade surplus is narrowing.

European Outlook: Asian stock markets were mixed overnight. Japanese markets improved as the Yen finally eased. Oil prices moved higher with the front end Nymex futures now slightly above USD 38 per barrel. US and UK stock futures are also posting gains, and risk appetite seems to be returning. ECB officials left the door to further easing measures wide open yesterday, even if they try to squash speculation of Helicopter money. Fed Chair Yellen also repeated that she sees some remaining slack in the labour market, although hawk George warned against delaying further hikes. In the Eurozone the flaring up of Grexit fears is pushing out yield spreads once again and causing further headache for Draghi. There is more ECBspeak on the calendar from Nowotny and Mersch today. UK publish trade data and there are also production figures from the U.K. and France alongside Swiss inflation numbers.

Draghi Speech, No change:  ECB doesn’t have shortage of available tools. The ECB President said the March 10 measures will further support price stability and help maintain the trust in the currency. At the same time, he stressed once again that all actors need to play a role in the recovery of the Eurozone and that fiscal rules shouldn’t be stretched beyond credibility. He also said that there is no case for unraveling past reforms in Europe. Nothing really new there, although with the ECB reducing market pressure on governments to implement and stick with reforms, the central bank’s calls on governments have so far had little impact.

 

Main Macro Events Today

• UK Industrial Production  

UK Industrial production is expected to slow 0.1% m/m from 0.3% m/m. Showing continued shrinking for UK factory output, even with a depreciating GBP demand particularly form Eurozone countries remains very weak. More evidence of a tough first quarter and sluggish global demand.

• Canadian Unemployment

The March employment report is expected to show a pick up in jobs to 10.4k but the unemployment rate to remain steady and unchanged at 7.3%.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

BOJ Koruda and Japan Finance Ministry: A reiteration of the Japanese economic approach was emphasized overnight as both the BOJ Governor and the finance ministry chief (Mr Suga) pledged more of the same and that they “Will take steps in FX market if needed”. The YEN continued its surge against its major competitors USDJPY is current trading at 108.8, EURJPY 124.50 and GBPJPY 154.00. The Nikkei 225 was understandably subdued on the news and is currently the lagging Asian stock market.

European Outlook: The bounce back in oil prices, which have risen above USD 38 per barrel, is keeping equity markets underpinned and things continued to improve in Asia overnight, with most markets outside of mainland China in positive territory, although gains have been modest, compared to the rise in the U.S. and the U.K. The Fed minutes, which on balance favoured caution added support, while the rise in the Yen is keeping a lid on Japanese equities. U.K. stock futures are also higher, pointing to opening gains in Europe, with Eurozone markets likely to continue to underperform amid ongoing EUR strength and concerns about the economic and political outlook for the Eurozone as Grexit fears flare up again and push out spreads. The calendar is relatively quiet, with a focus on the ECB, which publishes the minutes to the March meeting and holds a conference on “The ECB and its watchers”.

FOMC minutes: They showed “several” officials argued for a cautious approach regarding the potential for an April hike, which was debated at the March meeting. As Yellen commented in her recent speech, and in her press conference, many participants thought the current rate asymmetry made it prudent to wait for more information on the underlying strength of economic activity or inflation before taking another step to reduce accommodation. The minutes revealed global concerns remained very relevant — the word “global” was used 13 times in the participants’ discussion of current conditions (“risks,” or some variation, appeared 16 times). Again the FOMC reiterated the next move would be data, not calendar, dependent. We’re not seeing anything really new in the minutes versus what we knew from the policy statement, the SEP, and subsequent Fedspeak.

Fedspeak, Positions Confirmed: Fed hawk Mester expects “gradual” rate hikes this year in a repeat of previous missives on the topic, in discussing the economy and monetary policy from Cleveland. Bullard also stated his expectation that inflation will overshoot the 2% target and that 2.2% inflation is better than 1.5% inflation and that all meetings are “live”. So more of the same from the Presidents.

 

Main Macro Events Today

• ECB’s Draghi Speech   

Due to speak about the economic and financial situation in Europe at the Portuguese President’s Council, in Lisbon. The eloquent and reserved Mr Draghi is always one to listen too carefully. Portuguese Bonds were dragged down yesterday along with Grexit talk. Interesting location for his latest speech.

• Fed’s Yellen Speech   

In New York the four latest Chairs (Volcker, Greenspan, Bernanke and Yellen) of the FOMC are meeting and Mrs Yellen is due to speak. As the incumbent Chair she is unlikely to use the occasion to utter anything new or indeed controversial. The words from her predecessors on the other hand could prove more interesting.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

German Feb industrial production drops less than feared: Production correcting just 0.5% m/m from the rise in January, against expectations for a drop of around -2.0% m/m. Still, the January number was revised sharply down to 2.3% m/m from 3.3% m/m reported initially and the annual rate fell back in February. Together with the weaker than expected orders readings and mixed confidence data the outlook is for slowing growth in overall production and a general weakening of the growth trajectory as the improvement on the labour market peters out and the refugee crisis weighs on consumer confidence.

European Outlook: Asian stock markets were mixed with Japan underperforming as a third consecutive dip in the leading indicator and a stronger Yen weighed on markets. Elsewhere stock markets started to stabilize and the front end Nymex futures climbed toward USD 37 per barrel. The EUR weakened, but remains clearly above 1.130 against the dollar. Released overnight the U.K. BRC shop price index dropped -1.7% in March, a slight uptick from the -2.0% y/y in February. Still to come, there is central bank speak from the ECB and the Riksbank and Germany, Denmark, Sweden and Norway sell bonds, while Greece issues bills amid fresh Grexit concerns.

US ISM-NMI March increased to 54.5: This was from a 53.4 two-year low that beat estimates and capped a four-month drop from a solid 58.3 as recently as October, versus a 59.6 ten-year high last July. The ISM-adjusted measure rose to 54.1 from 53.2 in February and a 53.1 two-year low in January, versus a 59.0 ten-year high last July. The ISM-NMI figures remain stronger than the factory sentiment readings likely because the service sector is benefiting from the boost to household purchasing power via lower gasoline prices, while the factory sector faces headwinds from an inventory overhang, weak foreign demand, restraint in the vehicle assembly rate, and a petro-sector recession. Given March strength in the factory sentiment figures, the ISM-adjusted average of the major surveys popped to a surprisingly solid 53 in March from 49 in both January and February and 50 over the last four months of 2015, leaving the strongest average since the 53 figure in June and July of last year.

US JOLTS report showed job openings fell 159k: 5,445k openings in February versus a revised 323k January gain to 5,604k (was 5,541k), though the January level was the 3rd highest of this cycle. The rate fell to 3.7% from 3.8%. Hiring rebounded 297k to 5,422k after diving 276k in January to 5,125k (revised from 5,029k). The rate rose to 3.8% versus 3.6% previously. Quitters increased 99k to 2,950k following the prior 237k decline to 2,851k (revised from 2,804k). The quit rate also rose to 2.1% from 2.0%.

 

Main Macro Events Today

• FOMC Minutes  

The minutes to the March 17, 18 Fed meeting will be interesting for clues on the various outlooks of the Committee. However, Yellen’s dovish stance has usurped a lot of the importance of the minutes. Also, other Fedspeakers since the mid-March meeting have also let their feelings known, with even the more dovish members supporting expectations for 2 rate hikes this year. Meanwhile, data has revealed a slower Q1 economy, with our 2016 growth forecast now just 0.7%, with the Atlanta Fed at 0.4%. We know that in March, policymakers were contending with many uncertain and conflicting signals, as well as geopolitical concerns. Those factors left the FOMC on the sidelines, as they punted into Q2, although the economic projections for the year, along with inflation forecasts, were trimmed. Look for the minutes to largely underscore the various uncertainties domestically and around the world as the central reason for the unchanged policy stance.

• ECB Non-Monetary Policy Meeting   

The Non-Monetary policy’s ECB meeting is this morning in Frankfurt. This is a monthly meeting and involves all 25 members of the governing council.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

RBA leaves rates on hold: The Reserve Bank of Australia has left interest rates on hold for the 11th straight month, despite growing unease about a stubbornly high Australian dollar. The official overnight cash rate target has been left at 2 per cent, where it has been since last being cut in May 2015. The Reserve Bank has attempted to lift expectations that the bank may cut rates, with its governor Glenn Stevens warning that a rising Australian dollar could push it to cutting rates again. “The Australian dollar has appreciated somewhat recently. In part, this reflects some increase in commodity prices, but monetary developments elsewhere in the world have also played a role,” he wrote in his post-meeting statement. Financial markets are pricing in around a one-in-three chance of rates falling next month, with a 50 per cent chance of a cut by August. AUDUSD is currently trading at 0.7600, having been as high as 0.7620.

European Outlook: Asian stock markets outside of mainland China were under pressure, with the Nikkei underperforming. US and European stock futures are also lower, as risk aversion continues to weigh on markets and oil prices settle below USD 36 per barrel. The RBA kept policy on hold, but left the door open for easing steps as it sends a warning on the strong AUD. The RBI cut rates by 25 bp, also as expected. The European calendar has German manufacturing orders at the start of the session, followed by the final reading of the Eurozone Services PMI and the UK. Services PMI.

Minneapolis Fed’s Kashkari sees moderate growth: As his outlook for the U.S. economy and views current monetary policy as “about right.” He also noted that it is compelling that the U.S. labor force participation rate is on the rise as he wants to keep putting people back to work as long as inflation stays below the Fed’s goal. “That’s a good thing and we should let that process continue while inflation is running below our target,” he noted. Sounds like he’ll be in Yellen’s dovish camp, barring any unexpected jump in inflation. A little less controversial than the his start as a regional Fed president by critiquing banks for still being too big to fail. Kashkari was speaking at a symposium on banking regulation.

US factory orders dropped 1.7% in February: After a revised 1.2% January gain (was 1.6%). Though the headline decline wasn’t as weak as projected, weakness was broad-based and this doesn’t bode well for growth. Durable goods were revised down to a 3.0% decline from -2.8% previously. Transportation orders fell 6.2%. Excluding transportation, orders were down 1.3% compared to a 1.4% gain previously (revised from 1.7%). Nondefense capital goods orders excluding aircraft slid 2.5% from 3.3 (revised from a 3.4% increase). Shipments dropped 0.7%, with nondefense capital goods shipments excluding aircraft falling 1.7% from -1.4% (revised from -0.4%). Inventories declined 0.4% from -0.5% in January. The inventory-shipment ratio was steady at 1.37 (January was revised up from 1.36).

 

Main Macro Events Today

• U.S. Non-Manufacturing ISM

The March ISM-NMI is out later today to close out the March producer sentiment readings. We expect the headline to improve to 54.0 (median 54.1) from 53.4 in February The already released ISM improved to 51.8 from 49.5 and other major measures all improved as well. Broadly, we expect the ISM-adjusted measure of all measures to pop to 52 for the month after holding at 49 in the two months prior.

• Eurozone Services PMI  

The Eurozone PMI Services PMI is also released today and no change to previous months 53.7 reading is expected. German figures are expected to remain resilient at 55.5 whilst French figures are expected to remain the weakest of the reporting countries at 51.2.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

China’s official manufacturing PMI improved to 50.2 in March, better than expected from 49.0 in February. The improvement leaves the index at or above the key 50 contraction/expansion threshold for the first time since the 50.0 in July of 2015. The 49.0 reading this February was the weakest reading since a matching 49.0 in November of 2011. The move back into (very modestly) expansionary territory is good news, suggestive of some stabilization in China’s manufacturing sector. However, at the same time Caixin Manufacturing PMI (released by Markit Economics) is still below 50 at 49.7.

Sentiment index for Japan’s large manufacturers dropped to the lowest level in three years. Stronger yen eats into company profits, undermining efforts to revive world’s third-largest economy. The Tankan index stood at 6 in March, the Bank of Japan said today, declining from as high as 12 three months ago. A positive number means there are more optimists than pessimists among manufacturers.

Fed’s Evans echoed Yellen’s comment that continued caution is warranted on the policy path, due to low inflation (the FOMC non-voter is speaking on Bloomberg Radio). He’s projecting one hike at mid-year, and one at year-end, and reminded the FOMC could move at any meeting. The Fed is trying to be pro-active in order to avoid having to shift down to a negative interest tactic. An improvement in the outlook could speed up the pace of hikes, he noted, and added that recent inflation data have been firmer. But he believes the Fed needs to get closer to its objectives. There’s nothing really new here from Evans. When the FOMC shifted its dot plot lower to two tightenings this year, we and the market penciled in hikes in June and December (both are meetings that include press conferences).

Eurozone March HICP inflation came in at -0.1% y/y yesterday. Inflation remains stuck in negative territory, but core inflation is rising again and the gap between the rates across the four largest Eurozone countries is also widening. At the same time, energy prices remain the key factor behind negative rates, with no real signs of a deflationary spiral. German headline rates are back in positive territory and with the ECB continuing to add stimulus, the risk of property bubbles and regional inflation overshoots in the medium term are also picking up.

 

Main Macro Events Today

• UK Manufacturing PMI: The UK manufacturing PMI is due today and is expected to come in at 51.2 showing some improvement after much weaker than expected number in the February survey. In February PMI dropped to 50.8, down from 52.9 in January.
• US Manufacturing ISM: March ISM is out on Friday and should reveal an increase to 50.0 (median 50.6) from 49.5 in February and 48.2 in January. Producer sentiment has been rebounding sharply in March with big gains in all of the already released measures which should lend upside risk to the remaining measures of producer sentiment. The rebound is poised to bring the ISM-adjusted measure for the month up to 52 after holding at 49 for two months.

• US Employment: March employment data is out on today and should reveal a 190k headline gain following headlines of 242k in February and 172k in January. The unemployment rate should remain steady at 4.9% (median 4.9%) for a fourth month.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Chair Yellen, Fed to proceed “cautiously” In her speech on The Outlook, Uncertainty, and Monetary Policy, she added that this caution is “especially warranted” because with the funds rate so low, “the FOMC’s ability to use conventional monetary policy to respond to economic disturbances is asymmetric.” Given her caution, April can be taken off the table (we don’t think it was seriously on). Global developments present ongoing risks to the U.S. economy (again singling out Chinese growth) she added and the future rate path is “necessarily uncertain.” The economic data so far this year has been somewhat mixed, she noted. Full employment may be lower than the 4.8% rate, she added, suggesting the FOMC might be again adjusting the goal posts. Another oil price drop could have adverse spillover effects for the global economy she worried. On inflation she noted it’s too early to ascertain if the pick up in core inflation will prove durable. Interestingly the word Uncertainty was added to title of the speech at the last minute. Markets took their cue from the release of the speech (the title change clearly helped) with Bonds, Commodities and Stock Markets rallying and the USD coming under pressure.

Japanese Industrial Production Falls significantly:  Japan’s industrial output fell sharply in February, government data showed, not helped by a nationwide output shutdown at Toyota Motor Corp. Output dropped 6.2% from the previous month, according to data released by the Ministry of Economy, Trade and Industry. .The data suggest output is dragging on growth in the first quarter, adding to signs of weakness in the economy in early 2016, following a 1.1% annualized contraction in real gross domestic product in the last three months of 2015.

US Consumer Confidence Rises:  US consumer confidence March rise to 96.2 after a big February drop to an upwardly-revised 94.0 (was 92.2) defied the downdraft in other March confidence readings to leave the index back near the 97.8 January figure. Consumer confidence still sits below last year’s oddly-firm Q3 readings that left a 102.6 September figure, and well below the 103.8 cycle-high seen in January of 2015. Confidence faces a lift into Q2 from reversals of early-year stock price declines and a diminishing hit to factory output from falling foreign demand as we near the end of the oil and inventory-hit to GDP. Confidence continues to benefit from low gasoline prices for consumers and home price gains despite limited credit availability. For other measures, the Michigan sentiment index fell to 90.0 from 91.7, versus a 98.1 cycle-high last January, the IBD/TIPP index fell to 46.8 from 47.8, versus a 54.0 cycle-high in October of 2012, and the Bloomberg Consumer Comfort index is poised for a 43.8 March average, versus 44.1 in February and a 45.7 cycle-high average in April of 2015.

European Outlook: Asian stock markets outside of Japan moved higher after cautiously dovish comments from Yellen yesterday, which helped to lift oil prices and weighed on the dollar. Japanese markets meanwhile were depressed by the resulting rise in the Yen and weaker than expected Japanese production numbers. Europe returns from the long Easter holiday weekend today, and bond futures are likely to rise in tandem with stocks in catch up trade, although the fact that the euro is creeping towards 1.13 against the USD again will give stocks a headache. The European calendar focuses on Eurozone ESI economic confidence and preliminary German inflation data for March.

 

Main Macro Events Today

• German Inflation

We are looking for a rise in the German HICP rate to -0.1% y/y (median same) from -0.2% y/y, Today’s data will be followed by French and overall Eurozone numbers tomorrow and after the ECB’s latest round of stimulus measures, the expected slight pick up in headline rates may put off discussions of yet more easing for now, but is unlikely to totally end speculation of what the ECB could do next.

• USA – ADP Employment change

Expectations are for an additional 194,000 jobs in the ADP survey this month down from last month’s 214,000. The ADP figures are a good guide to the official government NFP figures to be publish on Friday.

Janne Muta

Chief Market Analyst

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

Very mixed data from Japan overnight:  Household spending exceeded expectations at 1.2% (-1.8% expected) however, the  Unemployment rate inched up to 3.3% from 3.2% and Retail Sales also missed significantly coming in at 0.5% against expectations of 1.6%. Prime Minister Abe assured markets that he will proceed with the scheduled tax hike next year (since the first one went so well) unless Japan is hit by a Lehman crisis-scale shock of 2008 or an earthquake on the scale of 2011’s. He’s also not thinking at all about dissolving the Lower House and calling snap elections. A majority of analysts still expect Abe to delay the proposed sales tax hike to 10% from 8% slated for April of next year. USDJPY trading higher at 113.40.

US Reported a weak Q1 consumption:  The February personal income report halved  Q1 “real’ consumption growth forecast to 1.8% from 3.6%, and trimmed Q1 GDP growth forecast to 1.0% from 1.4%. There was also a small widening in the February goods trade deficit to $62.9 bln, though there was big February export and import gains that mostly reversed outsized declines in January to leave a better Q1 outlook for global trade. The bad news for spending was partly offset by a big Dallas Fed bounce to -13.6 from -31.8 with an ISM-adjusted rise to 47.6 from 44.4, alongside a 3.5% February pending home sales rise that’s consistent with comfortable housing sector gains into the Spring home sales season.

Fed Policy Outlook: The already slim chance for an April rate hike was lowered further by the disappointing income report. The sluggish Q1 growth outlook, along with the failure for PCE to edge closer to the FOMC’s 2% target, should keep the Fed sidelined until at least June. Comments from several Fed officials last week, including several doves, all of whom reminded that April was in play, increased worries that the Fed could pull the trigger next month. But that seems highly unlikely now, and Fed funds futures are creeping higher again too. The implied May contract points to a 0.390% rate, only fractionally higher than the current 0.375% target mid-point.

 

 

Main Macro Events Today

• US Consumer Confidence

March consumer confidence is out later and should reveal a 94.0 (median 93.7) headline, up from 92.2 in February. Already released measures of confidence for the month spell out the potential for downside risk to the headline. The Michigan Sentiment report revealed a decline to 90.0 from 91.7 in the first release and the IBD/TIPP Poll fell to 46.8 from 47.8 in February.

• Fed Chair Yellen Speech

Due to deliver a speech titled “Economic Outlook and Monetary Policy” at the Economic Club of New York luncheon. All eyes on the speech as traditional Doves on the FOMC have become more hawkish in recent pronouncements.

 

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.