The first week of April turned up to be fairly busy with a barrage of global news announcements and two central bank rate decisions.
The Reserve Bank of Australia and European Central Bank both decided to leave rates unchanged (2.50 percent and 0.25 percent, respectively).
In other news, the German Unemployment Change slid for the fourth month in March, registering -12,000 compared to median estimates of only -9,000. The Euro-area jobless rate improved slightly as well. Spanish Unemployment Change also made a remarkable improvement (-16,600). However, Italian Monthly Unemployment Rate ticked up slightly to 13 percent.
In Australia, the Australian Bureau of Statistics reported on Wednesday that Building Approvals surprisingly sunk 5 percent in February, beating the median forecast of -1.7 percent. This is the fifth decline in the last 7 months.
Canadian jobs reports were much rosier compared to data for their American counterpart. The US Jobless Rate remained at 6.7 percent with last week’s Jobless Claims beating expectations to the downside (326,000 versus 319,000 forecast). US Non-Farm Employment Change stood at 192,000, down from the previous month’s reading of 197,000. On the other hand, Canada enjoyed a slight improvement in Jobless Rate (6.9 percent versus 7 percent previously) and a big gain in Employment Change (42,900 versus 21,500 estimate and -7,000 in previous month).
Gold bulls have a lot more strength in them and they clearly showed it this week. They prevented a third consecutive weekly drop from happening and managed to bring price to a weekly close just above the $1,300 level. The challenge for them right now is to continue the recovery efforts and aim for a weekly close above $1,350-70 this week.
Oil had a rough week, tumbling in the first half of the week, only to rebound and close the week above $101. This was not enough to give bulls their second bullish weekly close, and puts their efforts in jeopardy. The battle in the coming week could be decided at the $101 level.
Early this week, EURUSD bulls tried to recover back above the 1.3800 level but they were easily held off by eager bears. This led to a third weekly decline and price is now approaching critical support around 1.3600-50. This is going to be a major test for bulls.
GBPUSD struggled early this week to revisit the critical level at 1.6700. Bears were happy to see this and quickly stepped in to take advantage. The bearish weekly close at 1.6574 could indicate bears are interested in another attack on the 1.6500 level.
USDJPY had a lot of fun this week. It would have been perfect – an all-bulls week – if not for the Friday drop which have made a big dent on the pair’s third bullish weekly close. Price action indicates price is still ready to move up further if 103 holds in the coming week.
The Week Ahead
Monday will be in its usual quiet or less active form. Key news releases will include Australia’s ANZ Job Advertisements; Switzerland’s Foreign Currency Reserves and CPI; and Bank of Canada’s Business Outlook Survey. China will observe Tomb Sweeping Day.
Tuesday will be much more active with NZIER Business Confidence; Japan’s Current Account, Monetary Policy Statement, and BOJ presscon; Australia’s NAB Business Confidence; Switzerland’s Retail Sales; UK’s Industrial and Manufacturing Production; US JOLTS Job Openings; and Canada’s Housing Starts and Building Permits.
Wednesday will have lower activity than Tuesday, with news releases such as Australia’s Westpac Consumer Sentiment, China’s New Loans and M2 Money Supply; UK Trade Balance; and US FOMC Meeting Minutes.
Thursday will get busier with New Zealand’s Business NZ Manufacturing Index; Japan’s Core Machinery Orders; Australia’s Employment data; UK BOE Rate statement and announcement; and US Jobless Claims.
Friday will have BOJ’s Monetary Policy Meeting Minutes; China’s PPI and CPI; and US PPI and preliminary UoM Consumer Sentiment.