The last full week of March turned out to be very busy as a flurry of economic data dotted the entire week, highlighted by a jump in New Zealand Trade Balance and a surprise recovery in UK Retail Sales.
New Zealand’s Trade Balance jumped to NZD818 million, beating analysts’ median forecast of NZD595 million by a hefty margin. This follows a revised NZD286 million from the previous month.
In the United Kingdom, Current Account matched prior data with –GBP22.4 billion. Final GDP stood at 0.7 percent. PPI Input and HPI surprised with a 0.4 percent decline and jump to 6.8 percent, respectively.
In Japan, Household Spending sank 2.5 percent according to the latest data. Tokyo Core CPI inched up to 1 percent. Unemployment Rate improved slightly to 3.6 percent.
US data was generally mixed. Flash Manufacturing PMI, Pending Home Sales, and New Home Sales came in lower than expected, but actual data for Durable Goods Orders and Flash Services PMI were better than expected. Richmond Manufacturing Index dropped further to -7 (versus -1 forecast) while CB Consumer Confidence surprised with an improvement past the 80 level to 82.3. Jobless Claims for the prior week was 311,000. Meanwhile, the revised University of Michigan Consumer Sentiment was flat at 80.0.
Gold sank further this week, initiated by the early $27 drop on Monday. Sellers seem to have full control of yellow metal and we could see additional selling next week and move toward $1,100-$1,200.
Oil bucked the trend set by Gold and has continued on to erase the early-March drop through the $100 level. Price has recovered back to the low-$102s and closed the week in the mid-$101s. This puts a possibility of a challenge of the $103 level next week.
EURUSD followed the footsteps of Gold and declined for a second week. This time, the pair broke through the 1.3800 level with relative ease as sellers outnumbered buyers. Next potential support comes around 1.3650-1.3700.
Unlike EURUSD, GBPUSD posted a turnaround and erased most of the prior week’s losses. Price rose for five straight days and closed the week off the highs. Stiff resistance remains at 1.6700.
USDJPY followed up with another bullish advance this week. The near-100 pip move in the 11th hour pushed the pair through buy stops close to the 103 level. Buyers must exert considerable effort to conquer the resistance at 104. This coming week could be pivotal for this pair.
The Week Ahead
Daylight Saving Time shift will happen in Switzerland, the UK, and several Eurozone countries. Meanwhile, New Zealand and Australia will exit DST on April 5 (Saturday) and April 6 (Sunday), respectively.
On Monday, New Zealand’s Building Consents and ANZ Business Confidence; Japan’s Preliminary Industrial Production; Australia’s HIA New Home Sales and Private Sector Credit; Germany’s Retail Sales; Switzerland’s KOF Economic Barometer; UK Net Lending to Individuals; Eurozone CPI Flash Estimate; and US Chicago PMI. US Fed Chair Janet Yellen and BOE Governor Carney will also give a speech.
On April 1, Tuesday, we will see the release of Japan’s Tankan Manufacturing and Non-Manufacturing Index; China Manufacturing PMI and HSBC Final Manufacturing PMI; RBA Rate Announcement and Statement; UK Manufacturing PMI; ECOFIN Meetings; and US Final Manufacturing PMI; US Construction Spending, and US ISM Manufacturing PMI.
Wednesday will start off with Australia’s Building Approvals; UK Nationwide HPI and Construction PMI; ECOFIN Meetings; and US ADP Non-Farm Employment Change and Factory Orders.
Thursday will get much busier with Australia’s Retail Sales and Trade Balance; China Non-Manufacturing PMI; UK Services PMI; Eurozone Final Services PMI; ECB Rate Announcement and Press Conference; US and Canada Trade Balance; US Unemployment Claims and ISM Manufacturing PMI.
Friday’s news activity will be very compact with Germany’s Factory Orders; US and Canada Employment data; and Canada’s Ivey PMI.