The entire week was dotted with a flurry of economic releases, but Thursday was the most action-packed day of this week, particularly with the RBNZ Rate Announcement and Statement, better-than-expected Japanese Core Machinery Orders and Australian Employment Change data.
The Reserve Bank of New Zealand declared on Thursday that it is putting its Official Cash Rate ahead of other developed nations, hiking its rate for the first time since 2010 by 25 basis points to 2.75 percent. New Zealand’s central bank expressed plans to hike its rate further in the near future and discard stimulus much faster than earlier anticipated as it aims to reign in on inflationary prices.
Japan’s Core Machinery Orders surged 13.4 percent in January, nearly erasing the 15.7 percent decline seen in the previous month.
Australia’s Employment Change also came in much higher than forecast, 47,300, while the Unemployment Rate remained at 6 percent.
In the United States, 315,000 Americans claimed unemployment benefits last week, better than the 334,000 forecast and the lowest level since late-November. On the other hand, the Preliminary University of Michigan Consumer Sentiment Index declined to 79.9 in March, its lowest level in four months.
Gold pushed higher once again this week, rising for the sixth straight weekly session and closing in on the $1,400 even further. Price surged $55 and closed just $5 off its $1,387.51 high. Now that the $1,400 level is just a stone’s throw away, bulls keep their calm and make another decent push. Expect declines to hold around $1,340-60.
Last week’s intense volatility in Oil was followed by another volatile week, but this time it was purely to the downside. The $103 easily discouraged buyers starting Monday and price sank for the first three days before it tried to rebound on Thursday and Friday. The $100 level has been broken cleanly; bulls need to make a concerted effort to push price back above this critical level.
EURUSD, like Gold, completed its sixth consecutive weekly advance, keeping the pair close to the coveted 1.4000 level. The volatility seen on Thursday spoiled the attempt at 1.40. Nevertheless, the pair has closed the week strong, just above 1.3900. Late-buyers could come in ar ound 1.3700-1.3800.
GBPUSD saw a different story as this pair struggled to keep its presence above the 1.6700 level for the fourth straight week. Dollar strength put this pair much closer to 1.6600 for majority of the week. Further weakness would encourage bears to aim for a retest of 1.6200-1.6300.
It took USDJPY just 1 week to bring price back into the consolidative region that span 101.70-102.80. The rally seen last week toward 104 proved very short-lived as sellers overpowered buyers for 6 straight days, putting this pair at risk of a move to 99-100 soon.
The Week Ahead
Monday will have only New Zealand’s Westpac Consumer Sentiment and Australia’s New Motor Vehicle Sales during the morning session. Focus will be on news releases during the Europe and US session, particularly on Eurozone’s CPI; German Bundesbank Monthly Report; Canada’s Foreign Securities Purchases; US Empire State Manufacturing Index, TIC Long-term Purchases, Industrial Production, and finally US NAHB Housing Market index.
On Tuesday, Australia’s central bank will reveal its Policy Meeting Minutes, followed in the afternoon by Euro-area and Germany’s ZEW Economic Sentiment; Canada’s Manufacturing Sales; and US CPI, Housing Starts, and Building Permits. We’ll witness back-to-back speeches of BOC Governor Poloz and BOE Governor Carney later in the day.
Wednesday will be the day of the release of New Zealand’s Current Account; Japan’s Trade Balance; BOJ Kuroda’s speech; UK Unemployment Rate, Claimant Count Change, Annual Budget Release, and MPC Asset Purchase and Official Bank Rate votes; Canada’s Wholesale Sales; SNB Jordan’s speech; and US Current Account, FOMC Statement and Rate Announcement and Press Conference.
Thursday’s action will start very early with New Zealand’s Gross Domestic Product report; Switzerland’s SNB Libor Rate Announcement and Monetary Policy Assessment; EU Economic Summit; US Jobless Claims, Existing Home Sales, Philly Fed Manufacturing Index.
Finally on Friday, we will witness the release of Australia’s CB Leading Index; Euro-area Current Account; UK Public Sector Net Borrowing; Canada’s CPI and Retail Sales.