Today’s Economic events
- Japan preliminary industrial production m/m -6.20% vs. -5.80%
- KOF Swiss Leading Indicator 102.5 vs. 102.2
- Germany CPI m/m 0.80% vs. 0.60%; CPI y/y 0.30% vs. 0.10%
- ADP Employment change 200k vs. 195k
- Weekly Crude Oil Inventories
- BoC Council Member Patterson speech
Asian markets closed on a bullish note on Wednesday after Janet Yellen’s speech at the Economic Club of New York yesterday. The equity markets gained following four straight months of declines. China’s Shanghai Composite closed 2.80% amid speculation that another state-owned player was supporting the equity markets. The Nikkei225 was not as fortunate however as the index closed 1.30% lower on a stronger Yen. Economic data from Japan released earlier today showed industrial production falling at the sharpest pace since 2011 raising fears of another drop in the country’s GDP. Industrial production preliminary estimates fell 6.20%, against forecasts of -5.80% in February reversing January’s gains of 3.70%. USDJPY continued its bearish trend following yesterday’s intraday highs to 113.80. For the day, USDJPY is down 0.21%, trading at 112.4.
The commodity risk currencies got a bid with the US dollar turning weaker. AUDUSD is trading near a 9-month high, up 0.63% for the day trading at $0.767, while the NZDUSD is also near a 9-month high, gaining 1.28% for the day trading at $0.693. The Commonwealth Bank of Australia announced a sharp upward revision to the Australia dollar as the bank now expects AUD to be trading at $0.78 by the end of the year, up from previous forecasts of $0.70 and expects AUD to reach $0.80 by mid-2017.
In Europe, economic data included the KOF Swiss leading indicator increased to 102.5 beating forecasts of 102.2 with previous month’s number being revised higher to 102.6 from 102.4. The Swiss Franc was however stronger against the Greenback as USDCHF is down 0.43% for the day, trading at 0.963.
Germany’s consumer price index data released today showed a month over month increase of 0.80%, beating forecasts of 0.60% increase while on a yearly basis, German inflation edged higher, rising 0.30%, closer to the 2016 CPI forecasts of 0.50% according to the EU Commission’s estimates.
The EURUSD surged yesterday after Yellen’s comments closing the day at $1.129. The Euro was supported by comments from ECB’s Couere who, in an interview published earlier today said that the ECB would not take interests strongly into the negative, reflecting the comments from another ECB official, Makuch who previously said that the interest rates have little room left to steer monetary policy. EURUSD is up 0.38% for the day trading at $1.133.
The GBPUSD continued its rally which got a boost from the weaker Greenback GBPUSD closed yesterday at a 5-day high near $1.4386 and continued to trend higher to post a session high to $1.445 before easing back. GBPUSD is currently up 0.30% for the day trading at $1.442. European markets were broadly higher with the German DAX up 1.65% and the London FTSE100 gaining 1.64% at the time of writing.
[Tweet “US equity futures markets up on the ADP data. The Dow Jones futures up 0.55%”]
In the NY trading session, ADP’s private payrolls data released showed that the US economy added 200k jobs in the month of March, beating estimates of 195k. Previous month’s print of 214k was revised from 214k to 205k.
US equity futures markets were lifted on the ADP data. The Dow Jones futures are up 0.55% while the S&P500 futures are up 0.51% ahead of the opening bell.
The commodities are mixed today with Gold prices failing to capitalize on yesterday’s rally. Gold posted a session high to $1243 before easing back lower and is currently down 0.63% at the time of writing, trading at $1233 an ounce. WTI Crude Oil futures are up 0.88% for the day following yesterday’s dip to $38.10 a barrel. Crude oil inventory report is due out later today where 2.82 million build up in inventory is expected.