The latest data from Statistics Canada revealed a 2.5 percent surge in Wholesale Sales to CAD55.4 billion in December, led by improved sales in 6 of the 7 subsectors monitored. In dollar terms, the motor vehicle and parts subsector spearheaded the month’s gains, as the motor vehicle industry posted the highest recorded sales for the subsector and industry. The miscellaneous subsector recorded its fifth straight month of higher sales, led by sales in the chemical (except agricultural) and allied product industry and the agricultural supplies industry. The machinery, equipment and supplies subsector was the sole decliner. Seven provinces (98 percent of the total wholesale sales) registered gains, led by Ontario.
In the United States, Unemployment Claims rose by 283,000 compared to the 293,000 forecast. Meanwhile, the February Flash Manufacturing PMI came in slightly better at 54.3. The Philly Fed Manufacturing Index and Empire State Manufacturing Index were both weaker than anticipated (and 7.8, respectively). The Philly figure was the lowest in a year.
In other news, the UK MPC Asset Purchase Facility and Official Bank Rate votes showed no change. The Claimant Count Change, Average Earnings Index, and Unemployment Rate all came in better than forecast (-38,600, 2.1 percent, and 5.7 percent, respectively).
Gold’s nearly-$40 decline this week has given it its 4th consecutive weekly decline, following a top out just right above the $1,300 level. Price is now set to test the multi-year low printed on November at $1,131. A break of this area would enable a move toward $1,000.
Oil struggled to keep a foothold at the $54 level. In fact, price immediately reversed after reaching this area. Oil is back at the $50 level and bulls should be very careful as this could open up to another strong bearish leg toward $40.
EURUSD has been stuck in a very tight 170-pip range this week. Bulls failed to take advantage of the opportunity to diffuse the strong bearish momentum. A break of 1.1300 could send price back to 1.1100 and threaten to move to lower lows.
USDJPY barely moved this week, proving 119 is a magnet for both sides. Short-term trend is up with a tinge of consolidation bias. 118 remains supportive of bulls’ efforts.
GBPUSD was able to hit its fourth consecutive weekly high, but the fourth straight bullish weekly close was elusive. The pair closed the week lower than its open, albeit the weekly move was minimal. Price still needs to punch through resistances and toward 1.5800 to keep the bullish hope, no matter how small right now, alive.
The Week Ahead
Monday will be quiet except for Japan’s Monetary Policy Meeting Minutes; Germany’s Ifo Business Climate; UK CBI Realized Sales; and US Existing Home Sales.
Tuesday will have more activity with New Zealand’s Inflation Expectations; Switzerland’s Employment Level; Eurozone CPI; UK Inflation Report Hearings; Eurogroup Meetings; ECB Draghi’s speech; US CB Consumer Confidence and Fed Chair Yellen’s testimony.
Wednesday will be a brief news day with Australia’s Construction Work Done and Wage Price Index; China’s HSBC Flash Manufacturing PMI; UK BBA Mortgage Approvals; and US New Home Sales and Fed Chair Yellen’s testimony.
Thursday’s action will start early with New Zealand’s Trade Balance; Australia’s Private Capital Expenditure; Germany’s Gfk Consumer Climate and Unemployment Change; Eurozone’s M3 Money Supply and Private Loans; UK Second Estimate GDP; Canada’s CPI; Eurozone’s Targeted LTRO; US Unemployment Claims and Durable Goods Orders.
Friday will still be active with New Zealand’s Building Consents and ANZ Business Confidence; Japan’s Preliminary Industrial Production, Household Spending, Retail Sales, and Tokyo Core CPI; Switzerland’s KOF Economic Barometer; Germany’s Prelim CPI; France’s Consumer Spending; US Chicago PMI, Prelim GDP, Revised UoM Consumer Sentiment.