The Reserve Bank of New Zealand declared on Thursday that it is putting its Official Cash Rate on hold at 3.50 percent, with the view the current financial conditions around the world remains “very accommodative”.
Meanwhile, it was a mixed bag, but largely bearish week for China. Industrial Production, Fixed Assets Investment, Retail Sales all came in weaker than forecast. February CPI rebounds to 1 percent after previously posting the lone sub-1 percent reading in six months. PPI was much weaker at -4.8 percent. China New Loans was well above forecast in February (CNY1,020 billion), while, Money Supply improved by 12.5 percent.
The jobs data for Canada was mixed. Employment Change and Jobless Rate were -1,000 and 6.8 percent, while that for Australia was 15,600 and 6.3 percent, respectively.
In the United States, Unemployment Claims rose by 289,000 in the previous week, compared to the 306,000 forecast. Retail Sales, both main and core, declined for the third straight month. On the other hand, PPI fell for the fourth straight month in February, while its core reading slipped for the second consecutive month.
Gold’s move this week was milder in context of the decline seen in Oil. More buyers participated to halt a strong move toward the $1140 area. Nevertheless, there is more downside pressure now as price lingers below the $1,200 level as Gold is moving off a sharp decline in the prior week.
Oil sellers showed no mercy as they pushed price $6 down to a weekly close below $45. Buyers need to take action next week, otherwise we would see a new low, probably $30 to $35 in the next two or three weeks.
EURUSD sellers replicated the move they’ve done last week and sank the pair over 400 pips this time. There is still no sign of a significant bounce. Although traders should remain cautious of one, they should continue following the trend.
USDJPY made an early attack on the upside but struggled to hold on to gains for most of the week. The sky remains open to bulls, hence a target of 125-130 remains a possibility.
Like EURUSD, GBPUSD also improved upon its losses of the prior week. The pair stretched further down by over 400 pips, reaching lows unseen since June 2010. Traders can wait for selling opportunities around 1.4800-1.4900.
The Week Ahead
This week, Monday will have New Zealand’s Westpac Consumer Sentiment; Australia’s New Motor Vehicle Sales; Switzerland’s CPI and Retail Sales; Canada’s Foreign Securities Purchases; US Empire State Manufacturing Index, Capacity Utilization Rate, Industrial Production, TIC Long-term Purchases , and finally US NAHB Housing Market index. ECB’s Draghi is due to speak later that day.
On Tuesday, Australia’s central bank will reveal its Policy Meeting Minutes and Statement, followed by the BOJ Press Conference. In the afternoon, there will be Euro-area and Germany’s ZEW Economic Sentiment; Canada’s Manufacturing Sales; and US Housing Starts and Building Permits.
Wednesday will have New Zealand’s Current Account; Japan’s Trade Balance; UK Unemployment Rate, Claimant Count Change, Annual Budget Release, and MPC Asset Purchase and Official Bank Rate votes; Canada’s Wholesale Sales; US FOMC Statement, Economic Projections, Rate Announcement, and Press Conference.
Thursday’s action will start early with New Zealand’s GDP report. This will be followed later by Switzerland’s SNB Libor Rate Announcement and Monetary Policy Assessment; Targeted LTRO; EU Economic Summit; US Current Account, Jobless Claims, and Philly Fed Manufacturing Index.
Finally, on Friday, we will witness the release of BOJ Policy Meeting Minutes; Euro-area Current Account; UK Public Sector Net Borrowing; Canada’s CPI and Retail Sales. FOMC’s Lockhart is also expected to give a speech today.