Possible rate hike in April or June

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US _weekly forex overview

Image via International Monetary Fund / Flickr

On Wednesday, we could see an intensification of the buying tone in the USD, due to the hawkish comments of Fed’s Bullard. The information pushed the USD/JPY pair into session highs close to 112.89. In the US morning, the dollar cut some slack, but it quickly turned to the upside after Bullard stated that Fed might remain behind schedule with the expected monetary policy out the view. The comments are coming after previous hawkish releases from Fed regarding a possible rate hike in April or June. Also, the US new homes sale numbers came out flat, not inflicting any change in the already set perspective – the Fed rate hike bets.

On Thursday, UK’s ONS (Office for National Statistics) released fresh data according to which there is a slowdown in retail sales, also pointed out by the BRC (British Retail Consortium) release from the 7th of March. For what regards the headline, the data came short by 0.4% on a monthly basis but over the expected 0.7% drop. The annualized value met the forecast at 3.8%. The core figure went up 4.1% on a yearly basis, surpassing the expected 3.4%. Bad weather around the country pushed the clothing purchases down by 2.4% on a yearly basis and 0.4% down on a monthly basis.

In the US, the corporate spending figure (representing the durable goods orders) for the month of February was released yesterday and did not indicate a correction in the manufacturing sector (as expected after January’s high figures) as high as the analysts thought. The headline figure went down 2.8% after a downwardly revised 4.2% hike in the month of January. The non-defense capital goods (other than aircrafts) orders – considered to be one of the most reliable proxies for future corporate investments, went down 1.8%, surpassing the forecasted drop of only 0.5%. The headline figure was revised lower in this case also, from 3.4% to 3.1%for the month of January. The shipments of the goods mentioned before (used in the calculation of GDP – Gross Domestic Product) pulled back unexpectedly with 1.1% in February after January’s figure was revised to -1.3%.

In the oil sphere, we can see the rig count of Baker Hughes went up in the week ending today. The data released shows a 372 figure versus a 387 in the previous week, with a total rig count of 464 versus prior 476 and the Gas rigs 92 versus previous 89. The WTI (West Texas Intermediate) barrel hit monthly lows, but there are more and more arguments for the fact that the oil may have bottomed out and has no place left to go further down.

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Technical Strategist, CMT level 2 (MTA). Looking for good opportunities in the market, wherever they are, since 2009.