Both the Swiss National Bank and US Federal Reserve decided to keep their rates unchanged at -0.5 percent and less than 0.25 percent, respectively. There is speculation that the SNB might consider higher negative deposit rates if the Swiss franc continues to strengthen. In the Fed’s case, banks and analysts are divided in terms of the timing of the first rate hike, with some now thinking that it will come later rather than sooner.
In the United Kingdom, the MPC Asset Purchase Facility and Official Bank Rate votes came in just as widely expected: both at 0-0-9 (on hold). The Unemployment Rate stood at ticked back to 5.7 percent in January, while Claimant Count Change came in close to forecast in February at -31,000.
In Canada, Foreign Securities Purchases surprisingly surged in January to CAD5.73 billion. Manufacturing Sales slipped 1.7 percent, while the Wholesale Sales came in much weaker at -3.1 percent. Retail Sales, both main and core, declined for the second straight month. On the other hand, PPI’s main and core readings were both higher than expected.
In the United States, Unemployment Claims rose by 291,000 in the previous week, which was not far from the 295,000 forecast. Philly Fed Manufacturing Index increased 5.0 in March, compared to a 7.2 forecast. Current Account deficit widened to $113 billion during the fourth quarter of 2014.
Gold headed to the latest lows during the start of the week. But it managed to recover on Wednesday and made a strong U-turn to close the week higher. The next immediate resistance is right at the $1,200 level.
Oil is currently posting a potential double bottom for 2015 in the daily chart. Price touched a $44 low on Wednesday but the day closed much better. It would be interesting to see if the $40-$45 area will hold for the coming weeks and months.
EURUSD showed a similar positive tone seen in oil on Wednesday and shared the same positive weekly ending. EURUSD bulls need to push through 1.1000 and 1.1500 to gain traction in their campaign to prevent further deterioration in price.
USD weakness prevailed this week and gave USDJPY its first weekly loss in five weeks. Buyers are expected to prevent further takedowns at 118 and 116. Monitor closely how 120 will react this week.
Like EURUSD, GBPUSD showed a spike on Wednesday which helped advance the price action in Cable. However, the week closed below 1.5000, so the aim for this week is to get a weekly close 1.5000 and get closer to 1.5500.
The Week Ahead
Monday will be very quiet, with only a few economic events, such as UK CBI Industrial Order Expectations; ECB Draghi’s speech; US Existing Home Sales.
Tuesday will be more hectic with China, Japan, Germany, US, Euro-area, and France Flash Manufacturing PMI; Germany, Euro-area, and France Flash Services PMI; UK CPI, PPI Input, RPI; US CPI and New Home Sales.
Wednesday’s action will start very early with New Zealand’s Trade Balance, followed by RBA’s Financial Stability Review; Germany’s Ifo Business Climate; UK BBA Mortgage Approvals; and US Durable Goods.
Thursday’s activity will start in the European session with Germany’s Gfk Consumer Climate; UK Retail Sales, FPC Statement, and CBI Realized Sales; and US Jobless Claims.
On Friday, we will witness the release of Japan’s Tokyo and National Core CPI, Household Spending, Jobless Rate, and Retail Sales; BOE Governor Carney’s speech; and US Final GDP and the revised reading of University of Michigan’s Consumer Sentiment.