New Zealand’s Trade Balance has remained weak for the second consecutive month as dairy led the decline in exports. Statistics New Zealand showed a NZD50 million trade surplus, compared to the NZD375 million forecast. Dairy declined 41 percent compared to a year earlier, as prices and export quantities declined. Falling exports to China, a major trading partner, has been the key reason.
In the United Kingdom, the Office for National Statistics reported that CPI has turned flat in February, the first time since its record started nearly 30 years ago. PPI Input was only 0.2 percent. Retail Sales continued in a positive trend for the fifth month in February with a 0.7 percent gain, better than expected.
US data was generally mixed. Flash Manufacturing PMI was published at 55.3, slightly better than the previous month’s revised reading. New Home Sales of 539,000 was seen in February, the best in seven years. However, Existing Home Sales came in slightly lower than forecast at 4.88 million. Durable Goods for February surprisingly dropped; the main and core readings dropped 1.4 percent and 0.4 percent, respectively. Jobless Claims for the prior week was 282,000. Meanwhile, BEA said Final GDP for the fourth quarter of 2014 grew 2.2 percent on consumer spending.
This week, Gold tried to rally through $1,200 but ultimately fell short of this level during the weekly close. This could indicate weakness remains and sellers could still pound the yellow metal back to the multi-year lows.
Oil followed Gold’s path this week. It tried to rally for most of the week, and managed to break through $52 but fell back to earth after sellers reclaimed control on Friday. The $48 level could be a key level in the coming days or weeks.
EURUSD clearly struggled to go higher all throughout this week. Bulls got a brief taste of new weekly highs on Thursday before sellers pulled the rag out of their feet. 1.09-1.10 would be the key area for bulls to traverse. Otherwise, we could see new lows in the coming weeks.
Unlike EURUSD, GBPUSD had a much harder time this week. The pair consolidated within a very tight range and stayed closed to the 1.4800 level. Continued weakness in the new week would push this pair to new lows.
USDJPY declined to new weekly lows before we saw buyers step in to prevent further losses. The 118-119 area proved critical as expected and we could see more battles in this area soon.
The Week Ahead
Daylight Saving Time shift will be implemented in Switzerland, the UK, and several Eurozone countries. Meanwhile, New Zealand and Australia will exit DST on April 4 (Saturday) and April 5 (Sunday), respectively.
On Monday, we will see the release of Japan’s Prelim. Industrial Production; German Prelim CPI; Switzerland’s KOF Economic Barometer; UK Net Lending to Individuals; Canada’s IPPI and RMPI; US Personal Spending, Personal Income, and Pending Home Sales.
Tuesday will have New Zealand’s Building Consents and ANZ Business Confidence; Australia’s HIA New Home Sales and Private Sector Credit; Japan’s Average Cash Earnings; Germany’s Retail Sales and Jobless Change; France’s Consumer Spending; UK Current Account and Final GDP; Eurozone CPI Flash Estimate and Jobless Rate; and US Chicago PMI and CB Consumer Confidence.
Wednesday will be busy with Japan’s Tankan Manufacturing and Non-Manufacturing Index; Australia’s Building Approvals; China Manufacturing PMI and HSBC Final Manufacturing PMI; Spain, Italy, and UK Manufacturing PMI; and US Final Manufacturing PMI, ADP Non-Farm Employment Change, Construction Spending, and ISM Manufacturing PMI.
Thursday will have lesser activity with Australia’s Trade Balance; UK Halifax HPI and Construction PMI; US and Canada Trade Balance; and US Unemployment Claims and Factory Orders.
Friday is a holiday in New Zealand, Australia, Switzerland, Germany, UK, and Canada. Only news activity will be China’s HSBC Services PMI and US Employment data.