China credit ratings cut to negative

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Today’s Economic events

  • UK Gfk Consumer confidence 0 vs. -1
  • Australia New home sales m/m -5.30% vs. 0.60% previously
  • Australia private sector credit m/m 0.60% vs. 0.50%
  • Japan housing starts y/y 7.80% vs. -2.20%
  • French consumer spending m/m 0.60% vs. 0.10%
  • French preliminary CPI m/m 0.70% vs. 0.50%
  • BoE Gov. Carney speech
  • UK Current account -32.7Bn vs. -21.1Bn
  • UK Index of services 3m/3m 0.90% vs. 0.80%
  • UK Q4 GDP, 3rd revision 0.60% vs. 0.50%
  • UK revised business investment -2.0% vs. -2.0%
  • Italy Preliminary CPI m/m 0.20% vs. .10%
  • Eurozone flash CPI estimates y/y -0.10% vs. -0.10%; Core CPI y/y 1.0% vs. 0.90%
  • Canada GDP m/m 0.60% vs. 0.30%; y/y 1.50 vs. 1.0%
  • US weekly jobless claims 276k vs. 265k

Coming Up

  • Chicago PMI
  • Fed’s Dudley speech
  • Fed’s Evans Speech
  • Australia AIG Manufacturing Index

The last trading day of the month and the first quarter of 2016 is almost coming to an end, and the markets are gearing up for a new month and a quarter, being kick-started by the US nonfarm payrolls tomorrow.

The US Dollar continued to weaken following a brief bout of recovery which soon fizzled. The Asian markets remained mixed with the Nikkie225 closing another day with losses, down 0.71%. The Shanghai Composite edged higher with modest gains of 0.12%. Data from the Asian session included Japan’s housing starts which increased 7.80% on an annualized basis, more than the estimated forecasts of 2.80%. USDJPY was trading flat for the most of the day but soon continued its decline. The currency pair is down 0.15% trading at 112.25.

Standard&Poors, the rating agency cut the credit ratings of China from Stable to Negative, noting that the economy’s rebalancing would take longer than previously anticipated. However, the downgrade in the ratings is unlikely to dampen investor appetite for now.

AUDUSD continued to grind higher following early trading retreat to session lows at $0.7635. New home sales data fell -5.30% for the month, but the data was ignored ahead of a new month, and, more importantly, the RBA’s meeting coming up. For the day, the Aussie is up 0.35%, trading at $0.77. The NZDUSD is also moving higher today but at a slower pace. Prices are trading at $0.695 following a dip to session lows at $0.6893 in early trading.

[Tweet “The UK’s final revised GDP for the fourth quarter of 2015 showed an increase from 0.50% to 0.60%”]

In Europe, the UK’s final revised GDP for the fourth quarter of 2015 showed an increase from 0.50% to 0.60%. The British Pound rallied on the news following the release, with GBPUSD currently up 0.07% trading at $1.438. But current account deficit showed one of the biggest deficit ever posted rising to over £32 billion or nearly 7% of its GDP. The data was however brushed aside.

EURUSD is back to the driving seat with prices seen flirting near a 5-month high, breaking above the $1.130 handle. Economic data from the Eurozone saw the flash estimates on core CPI rising 1.0%, more than the forecasted 0.90%. Headline inflation estimate was weaker at -0.10%. EURUSD is trading at $1.138, up 0.44% for the day.

European equity markets are down broadly with German DAX down 0.61% and the London FTSE100 down 0.22% for the day.

The NY trading session opened with Canada’s monthly GDP numbers being released. For March, Canada’s GDP increased 0.60% for the month of January, beating estimates of 0.50% while on an annualized basis Canada’s GDP is up 1.50%. USDCAD is down 0.52% at the time of writing.

US weekly jobless claims increased 276k more than the forecasted 265k. US futures are pointing to a modestly higher open with the Dow Jones up 0.04% and the S&P500 up 0.01% ahead of the opening bell.

The commodity markets are mixed today. Gold prices are up over 1.0% trading near the $1238 handle to an ounce following an early session decline to post a daily low near $1224. WTI Crude Oil futures are down by over 1.0% currently trading at $37.9 a barrel.

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