Just like last year, the month of March started with a very busy week, particularly with the release of central bank rate decisions, strong Aussie data, and broadly positive data from the US.
Four central banks – the Bank of England, European Central Bank, Reserve bank of Australia, and Bank of Canada – made the decision to leave their respective rates unchanged (0.50 percent, 0.05 percent, 2.25 percent, and 0.75 percent, respectively). The Reserve Bank of Australia maintained this rate amid strong economic data.
Australia’s Building Approvals surged in January, rising 7.9 percent following a revised-higher 2.8 percent decline in the previous month. Analysts expected another decline that month. GDP just missed its 0.7 percent forecast and came in at 0.5 percent. Retail Sales came in as expected (0.4 percent), while Trade Balance came close to expectations, -AUD0.98 billion. Current Account improved during the December quarter, -AUD9.6 billion.
In the United States, Unemployment Claims rose by 320,000 in the previous week, compared to the 293,000 forecast. Non-Farm Employment Change surged, 295,000 versus 240,000 forecast. The Jobless Rate also improved to 5.5 percent. Meanwhile, the February ISM Manufacturing PMI eased to 52.9 in February.
Gold’s $37 drop on Friday pushed yellow gold down easily by a $60 total through $1,200. The November 2014 lows now beckons and we could well see that get broken if price would be able to hold on to current losses.
Oil tried to spike higher this week, but overall price remained tied close to the $50. This is a worrying sign for bulls. They should try to take control and launch an attack toward $55 this week if possible.
EURUSD slid further this week, putting the pair into fresh negative territory. EURUSD sold 400 pips lower, breaking through 1.1000 for the first time since October 2003. The pair is now in a very steep downtrend; we could see a marginal bounce before heading to much deeper territory. 1.00 is on track.
USDJPY is now approaching the December 2014 mega highs as strong US jobs data boost this pair into the skies. We could see 125-130 in the near future.
The losses seen on GBPUSD was not far behind that of EURUSD’s. Nearly 400 pips was pulverized and the pair is now challenging the 2015 lows right smack at 1.4950. Further EURUSD weakness could send this pair into another downspiral. 1.4800 is the last main support ahead of fresh territories.
The Week Ahead
Starting March 8, Canada and the United States will implement the Daylight Savings time shift and clocks will move forward by 1 hour.
This time around, Monday will have a sparse amount of critical news releases, such as Japan’s Current Account and Final GDP; Australia’s ANZ Job Ads; Germany’s Trade Balance; and Eurogroup Meetings.
Tuesday will have Australia’s NAB Business Confidence; France and Italy’s Industrial Production; Switzerland’s Jobless Rate; China’s CPI and PPI; US JOLTS Job Openings; and ECOFIN meetings.
Wednesday will be busy with news like Australia’s Westpac Consumer Sentiment and Home Loans; Japan’s Core Machinery Orders; China’s Industrial Production, New Loans, Retail Sales, and Fixed Asset Investment; UK Manufacturing Production; and ECB Draghi’s speech.
Thursday’s action will start very early with New Zealand’s Interest Rate Announcement, Statement, and Press Conference. This will be followed by Japan’s BSI Manufacturing Index; Australia’s jobs data and MI Inflation Expectations; Eurozone Industrial Production; UK Trade Balance; Canada’s NHPI; US Retail Sales and Jobless Claims.
Finally, Friday will be brief. There will be NZ’s Business NZ Manufacturing Index; Canada’s Employment data; US PPI and Preliminary University of Michigan Consumer Sentiment.