Key Notes:
- RBNZ official cash rate, unchanged 3.5%
- UK Gfk consumer confidence 4 vs. 5
- New Zealand building consents m/m 11% vs. -6.5% previously
- Japan preliminary industrial production m/m -0.3% vs. -3.4%
- Australia import prices q/q -0.2% vs. 1.1%; private sector credit m/m 0.5% vs. 0.5%
- BoJ monetary policy statement. No change to policy
- Japan housing starts y/y 0.7% vs. -1.8%
- Germany retail sales m/m -2.3% vs. 0.5%
- France consumer spending m/m -0.6% vs. 0.5%
- Switzerland KOF economic barometer 89.5 vs. 91.6
- Spain flash CPI y/y -0.6% vs. -0.7%
- Spain flash GDP q/q 0.9% vs. 0.8%
- Eurozone flash CPI q/q 0% vs. 0%; Core CPI y/y 0.6% vs. 0.6%
- Eurozone unemployment rate 11.3% vs. 11.2%
- Italy preliminary CPI m/m 0.3% vs. 0.2%
Later:
- Canada GDP m/m
- US Core PCE price index
- US employment cost index q/q
- Chicago PMI
- BoC Governor speech
FOMC disappoints US dollar Bulls and Bears
The day after the FOMC April statement, which saw the Fed mirror the March statement, the markets continued their broad theme led by the US Dollar’s weakness. Spurring a risk off activity, the markets rallied across the board against the US Dollar. After pausing the rally, at one point the US Dollar attempted to make a comeback but failed as the Euro, British Pound kept mounting gains.
The Australian Dollar which saw a strong rally this week was considerably weaker today as the currency saw a sharp decline across the board, only muted against the US Dollar. The Kiwi dollar, which sold off after RBNZ’s dovish narrative, was also weaker today across the board.
The Yen managed to firm on BoJ leaving policy unchanged and refraining from making any further stimulus easing, but soon the stronger currencies such as the Euro and the British Pound managed to trim their losses to trade higher against the Yen.
The European trading session saw quite a few releases across the Eurozone, including Germany’s retail sales as well as flash CPI estimates. Data was broadly mixed, but the Euro was well supported as the Bunds continued to fall since yesterday. Further gains are expected for the Euro in the coming weeks, especially on a broader US Dollar weakness.
There was no economic data from the UK and the Pound continued to keep up its gains against the Greenback. The Cable is trading just a few points below 1.55 resistance level. Failure to break above this level could spell weakness for the currency in the near term and could see a sharp decline with support coming lower at 1.505 and 1.5 levels.
The US trading session will see a follow up with other economic data including the PCE price index, weekly unemployment claims and the Chicago PMI, all of which is likely to put pressure on the Greenback.
Canada will also be releasing its GDP numbers today with expectations of a -0.1% growth for the month.
