The Forex daily summary for 15 April features the following key notes:
- Australia Westpac Consumer confidence -3.2% vs. -1.2% previously; Consumer confidence 96.2 vs. 99.5
- China Real GDP y/y 7% vs. 7%; Industrial production y/y 5.6% vs. 7%; Retail sales y/y 10.2% vs. 10.9%
- Japan industrial production m/m -3.1% vs. -3.3%; Capacity utilization m/m -3.2% vs. 3.6% previously
- German CPI m/m 0.5% vs. 0.5%; CPI y/y 0.3% vs. 0.3%
- France CPI m/m 0.5% vs. 0.5%; CPI y/y -0.1% vs. 0%
- US MBA mortgage applications -2.3% vs. 0.4% previously
- ECB Rate, unchanged at 0.5%
- Canada manufacturing sales m/m -1.7% vs. 0.1%
- US Empire state manufacturing -1.19 vs. 7
- US Capacity utilization, Industrial production
- BoC interest Rate, press conference
The Asian markets opened today with the Greenback trading mixed, weighed down by yesterday’s retail sales and PPI data. The Aussie and Kiwi dollars were relatively subdued but managed to keep up the gains from the previous day.
Early data from the Asian session included the closely watched China GDP, which managed to meet expectations at 7%. However, other sub readings of the data showed weaker than expected growth, fuelling rumors of a possible further monetary easing from China. The Aussie and Kiwi, in this backdrop managed to hold their ground.
The Japanese Yen continued to trade stronger, with USDJPY briefly making an intraday high towards 119.695 before giving back its gains.
The European trading session saw the CPI data from Germany and France, which was mixed. The data was largely ignored by the Euro ahead of the main ECB event later in the day. EURUSD was seen trading near the lows of 1.056 levels into the ECB’s press conference, while the British Pound was seen a bit stronger today, after breaking out from the intraday triangle consolidation pattern.
The European Central bank left interest rates unchanged and followed up by the press conference, which was briefly interrupted by a protestor. The press conference resumed quickly and Draghi was back to business. The key talking points were:
- ECB stimulus program has to be fully implemented for it to work. The statement indirectly put to rest any rumors of a premature end to the bond buying program.
- The ECB had a total exposure of 110 billion Euros to Greece
- Risks to the Eurozone are more balanced due to lower exchange rate, QE and lower oil prices
- It is expected that inflation will remain near zero levels in the short term but that the Eurozone economy has gained momentum
- Concerns over bond scarcity was baseless
Overall, the press conference did not steer from the usual rhetoric and the overall outcome was being viewed as neutral. The Euro did not react much to either the interest rate decision or the press conference.
The US trading session saw the release of the Empire state manufacturing index which disappointed, printing -1.19. The US Dollar Index was little changed but remained subdued on the news.
Canadian manufacturing sales data was also released, which was weaker than expecting, falling -1.7% and below estimates. Previous month’s data was also revised lower to -3% from -1.7%. The Canadian dollar was trading mixed, stronger against the Greenback and weaker against currencies such as the Australian dollar. However, the Bank of Canada interest rate decision and press conference is due later today. Markets are expecting a no change to interest rates but expect to see a dovish statement.