Speeches by various central bank governors and key policy members dotted the whole week, but the US took center stage again after the release of the FOMC Statement and Federal Funds Rate on Wednesday.
The Fed Funds Rate was put on hold at less than 0.25 percent, as expected. Fed Chair Janet Yellen hinted that the Fed may begin to raise the interest rate as soon as April of next year.
Meanwhile, the Swiss National Bank declared on Thursday that it is putting its Libor Rate on hold at less than 0.25 percent. SNB vowed to fully defend the cap it has set on Swiss franc at 1.20 per Euro.
In the United Kingdom, the MPC Asset Purchase Facility and Official Bank Rate votes came in as expected, both at 0-0-9 (on hold). The Unemployment Rate stood at 7.2 percent in January, while Claimant Count Change improved further in February at -34,600.
In other news, the German and Euro-area ZEW Economic Sentiment surprised to the downside. The German data slipped for the third consecutive month now 46.6, the weakest level seen in the last 6 months.
In the United States, TIC Long-term Purchases increased but much less than forecast, $7.3 billion versus $23.4 billion. Existing Home Sales dropped to 4.60 million, while Philly Fed Manufacturing Index more than doubled this March at 9.0.
Gold made a massive rejection this week, reversing ahead of the $1,400 level right off the bat last Monday. This is a technical warning that bulls should heed. If price breaks $1,300 in the coming week, Gold could be bound for a move toward $1,100-$1,200.
Oil took a breather this week after the massive volatility seen in the prior week. Oil hit a new marginal low but price stayed above $98 for most of the week. Price could try to retest $100-$102 next week.
EURUSD saw bears dominate this week, and this pair traded within a range of nearly 200 pips. The pair was able to close the week just below the 1.3800 level, and this could mean bears should not be taken too lightly despite the new high printed in the prior week. Pay attention as this is the first major drop after the pair’s 6 consecutive bullish weekly closes.
Unlike EURUSD, GBPUSD posted its second weekly decline after struggling to take hold of the 1.6700 level. This puts GBPUSD on track to a possible test of 1.6250-1.6300 in the coming week or two.
USDJPY averted a breakdown of the critical 101 level last week and traded to the upside with a weekly trading range of 140 pips. However, the pair remains in consolidation, and bulls still need to exert considerable effort to conquer the resistance at 104.
The Week Ahead
The last full week of March will be light in terms of important news activity.
Monday will have only China, Germany, US, Euro-area, and France Flash Manufacturing PMI; Germany’s Bundesbank Monthly report; and Belgium’s NBB Business Climate.
Activity picks up slightly on Tuesday, with a speech from RBA Deputy Governor Lowe; UK Nationwide HPI, CPI, PPI Input, RPI, BBA Mortgage Approvals, and CBI Realized Sales; US S&P/CS HPI, New Home Sales, and CB Consumer Confidence.
Wednesday will be the day of the release of RBA’s Financial Stability Review; Germany’s Gfk Consumer Climate; and US Durable Goods data and bank stress test results.
Thursday’s action will start very early with New Zealand’s Trade Balance; UK Retail Sales; US Jobless Claims, Final GDP, and Pending Home Sales.
Finally on Friday, we will witness the release of Japan’s Tokyo and National Core CPI, Household Spending, Unemployment Rate, and Retail Sales; UK Current Account and Final GDP; and US Personal Spending, Personal Income, Core PCE Price Index, and the revised reading of University of Michigan’s Consumer Sentiment.