RBA slashes Cash Rate to 2 percent. The Reserve Bank of Australia decided to reduce its Cash Rate by 25 percentage points to 2 percent.
In other news from Australia, Building Approvals surged surprisingly by 2.8 percent in March, when median expectations was for a drop of 1.7 percent. Job Advertisements climbed 2.3%, while Trade Balance came in weaker –AU$1.32 billion. Meanwhile, Retail Sales was slightly weaker at 0.3 percent for the month of March.
In the United Kingdom, Construction PMI for April slowed dramatically to 54.2, its weakest since June 2013, according to the latest news from M arkit.
New Zealand Employment Change was a tad weaker at 0.7 percent, while the Jobless Rate came in higher at 5.8 percent. Meanwhile, Australia’s Employment Change stood at -2.9 percent while Jobless Rate came in as expected at 6.2 percent.
US Jobless Claims came in 17,000 lower than forecast at 265,000 during the previous week. Non-Farm Employment Change came in at 223,000 in April, according to the Bureau of Labor Statistics.
US and Canada Trade balance were much weaker than expected, -$51.4 billion and –CAD3 billion, respectively. US Jobless Rate came in line with forecast at 5.4 percent while Canada’s Jobless Rate stayed at 6.8 percent in April. Canada lost 19,700 jobs in April.
Commodities
Gold has been confined in a $22 range just below the $1,200 level. There is a long-term support around $1,180 and this could be playing a role on the current moves on Gold. Buyers need to break through a growing resistance around $1,220.
Oil spiked through $62 this week. But when the dust settled, Friday ended just slightly above the Monday open. Resistance around $58 has so far turned support, so we can expect a follow-through move higher if price stays above $60.
Currency Pairs
EURUSD enjoyed its fourth bullish weekly close after the pair aimed for 1.1400. The pair fell a few pips short of this level and then retraced close to the weekly open. The current move may have enough momentum to try and break 1.1400 this coming week.
GBPUSD powered back higher as buyers helped push the pair higher to form a weekly outside range and the highest weekly close on over two months. 1.56 to 1.59 is the next key area if the pair decides to move higher.
USDJPY printed a bearish weekly close but some indicators are hinting of a possible move higher. Having said that, this pair has been consolidating for over a month now, so it could still be swayed to either side. 120 could be the key to the upcoming directional change.
The Week Ahead
Monday will again be very compact this week but very impactful with Australia’s NAB Business Confidence; Eurogroup Meetings; BOE Official Bank Rate and Asset Purchase Facility announcement.
Tuesday will get started quite early with UK’s BRC Retail Sales Monitor; Australia’s Home Loans and Annual Budget Release; UK Manufacturing and Industrial Production; ECOFIN Meetings; and US JOLTS Job Openings.
Wednesday will be very busy with New Zealand’s FPI and RBNZ Financial Stability Report; Japan’s Current Account and Bank Lending; China’s Industrial Production, M2 Money Supply and New Loans; France, Italy, and Germany Prelim GDP; UK BOE Inflation Report, Inflation Letter, Flash, GDP, Claimant Count Change and Jobless Rate; US Retail Sales and Import Prices.
Thursday’s action will start very early as well with New Zealand’s Business NZ Manufacturing Index and Retail Sales; Canada’s NHPI; US PPI and Jobless Claims.
Friday will end the week with Switzerland’s PPI; Canada’s Manufacturing Sales and Foreign Securities Purchases; US Empire State Manufacturing Index, Industrial Production, Prelim UoM Consumer Sentiment, and Capacity Utilization Rate.
