The month of March kicked off with a very busy week, particularly with the release of central bank rate decisions, strong Aussie data, and mixed data from the US.
All four central banks – the European Central Bank, Bank of England, Bank of Canada, and Reserve Bank of Australia – decided to leave their respective rates unchanged (0.25 percent, 0.50 percent, 1 percent, and 2.50 percent, respectively).
In other news, several data surprises came out from Australia. Building Approvals surged in January, rising 6.8 percent following a 1.3 percent decline in the previous month. Analysts expected a measly 0.7 percent advance for January. GDP was slightly better at 0.8 percent, Retail Sales rose 1.2 percent, while Trade Balance surprised with AUD1.43 billion. Current Account came in as expected at –AUD10.1 billion.
In Canada, Building Permits surged to 8.5 percent in January, following significant back-to-back monthly declines. The Ivey PMI continued to rise in February, 57.2. On the other hand, Employment Change saw a dip of 7,000 while Unemployment Rate stayed at 7 percent.
In the United States, Non-Farm Employment Change rose more than forecast to 175,000. Jobless Rate, however, dipped to 6.7 percent. The Jobless Claims rose less than expected last week at 323,000.
Gold pushed higher again this week despite headwinds faced along the way. Sellers kept buyers on their toes again as the latter tried to cross the $1,350s. It’s the third week wherein the price range has been very tight, and this possibly indicates that we will see a considerable pullback in the coming week or so.
Oil saw intense volatility throughout the entire week as price moved within a $5 trading range. Price explored both sides of the previous week’s range, and we saw oil trade from $105 down to the $100s in the first four days. We could expect a similar action in the coming weeks, so traders should be very careful.
EURUSD gave another strong weekly finish, rising for the fifth straight week and touching the 1.3900 level for the first time since October 2011. The preferred move for the coming week is solidifying supports around 1.3700/1.3800 before price trampolines toward the 1.4000s.
GBPUSD displayed a much subdued price action this week, unlike EURUSD. Price has been magnetized to the 1.6700 level since mid-February, and bulls must control the situation soon and prevent a strong regrouping of sellers. A strong break of 1.6700 would risk a move toward 1.6200-50.
USDJPY started the week with a downside gap which saw no follow-through move. Price reversed quickly on Tuesday, instead, and the move snowballed to a break of the recent range top and the 103 level. The pair reached as high as 103.74 before it closed the week at 103.24. This strong weekly finish gives buyers a ticket to regain the 105 in the coming weeks, assuming 103 holds.
The Week Ahead
Starting March 9, Canada and the United States will implement the Daylight Savings time shift and clocks will move ahead by 1 hour.
This time around, Monday will have a sparse amount of critical news releases, such as Japan’s Current Account and Final GDP; France and Italy’s Industrial Production; Switzerland’s Retail Sales; and Eurogroup Meetings.
Tuesday will have Australia’s NAB Business Confidence; BOJ Press Conference and Monetary Policy Statement; Germany’s Trade Balance; China’s New Loans; UK and Manufacturing Production and Inflation Report Hearings; US JOLTS Job Openings; and ECOFIN meetings.
Wednesday is relatively concise this week but nonetheless teeming with key news like Australia’s Westpac Consumer Sentiment and Home Loans; Japan’s BSI Manufacturing Index; UK Trade Balance; Euro-area’s Industrial Production; and US Federal Budget Balance.
Thursday’s action will start very early with New Zealand’s Interest Rate Announcement, Statement, and Press Conference. This will be followed by Australia’s jobs data; China’s Industrial Production and Fixed Asset Investment; ECB Monthly Bulletin; Canada’s NHPI; US Retail Sales and Jobless Claims.
Finally on Friday, we will witness the release of New Zealand’s Business NZ Manufacturing Index; BOJ Monetary Policy Meeting Minutes; Switzerland’s PPI; US PPI and Preliminary University of Michigan Consumer Sentiment.