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Rates on Australia, Eurozone Unchanged, US Jobs Situation Improved

The latest release from the US Bureau of Labor Statistics showed Non-Farm Employment Change increased 288,000 in June, with more than half of the fresh jobs offering better than average wages. The latest increase mirrors that of April’s data, and is the 4th consecutive monthly increase above the 200,000 level. The Unemployment Rate also improved to 6.1 percent from 6.3 percent in the previous month. Meanwhile, Pending Home Sales surged 6.1 percent in May (versus 1.4 percent expectations), the most in over four years.

In other news, the European Central Bank and Reserve Bank of Australia both decided to keep rates unchanged (0.15 percent and 2.50 percent, respectively).

In Australia, the Australian Bureau of Statistics declared Building Approvals rose 9.9 percent in May, following three consecutive monthly declines. Retail Sales posted another marginal dip in May, while the Trade Balance widened to –A$1.91 billion as exports declined.

Commodities

Gold saw another tight range trading week as bulls and bears get attracted to the $1,300 level. Majority of the trading activity has been above the level, but we could clearly see the level’s magnetism. We could continue to see the same thing in the coming week, but bulls should take the chance to keep their support at this level so they can keep pushing northward.

Oil hit its second straight downweek as the $107 level continued to prevent any upside push. Price pierced through and closed the week below the critical support at $104, opening up doors for a move back toward the $100 level in the coming weeks.

Currency Pairs

EURUSD made a considerable effort to reach and break the 1.3700 level this week, however they ultimately failed. Not only that, the 60-pip drop on Thursday gave the pair a bearish weekly close below the critical 1.3650 area. This puts the 1.3500 level at risk of another attack in the coming weeks. Bulls must prevent this from happening.

GBPUSD achieved its fifth consecutive bullish weekly close on the back of an easy but strong push through the 1.7100 level. If buyers can protect this level from downside attacks, they can continue to push for higher highs.

USDJPY mirrored the prior week’s trading range, but this time the pair closed higher – just above the 102 level. Could bulls keep this up in the coming week? For them to do that, the key is for 102 to hold throughout this coming week, while they push for a break of 103 as soon as possible.

The Week Ahead

Monday’s news will be sparsely scattered throughout the day, starting with Australia’s ANZ Job Advertisements; Germany’s Industrial Production; Eurogroup meetings; Canada’s Building Permits, Ivey PMI, and Bank of Canada’s Business Outlook Survey.

Tuesday will be kicked off with New Zealand’s NZIER Business Confidence, followed by Japan’s Current Account; Germany’s Trade Balance; Switzerland’s Retail Sales and CPI; UK’s Halifax HPI, Manufacturing Production and Industrial Production; ECOFIN meetings; US JOLTS Job Openings.

On Wednesday, traders will expect some volatility with Australia’s Westpac Consumer Sentiment; China’s PPI and CPI; Canada’s Housing Starts; FOMC Meeting Minutes.

Thursday will be fully-packed with New Zealand’s Business NZ manufacturing Index; Japan’s Core Machinery Orders and Tertiary Industry Activity; Australia’s jobs data and MI Inflation Expectations; China’s Trade balance and New Loans; ECB Monthly Bulletin; UK Trade Balance, Official Bank Rate and MPC Rate Statement; US Jobless Claims.

Friday ends the week with a significant decline in news activity. There will only be Australia’s Home Loans; Canada’s jobs data; and US Federal Budget Balance.

US Publishes Record GDP Slump; Japan Household Spending Slides on Sales Tax Hike

The better-than-expected readings from US June CB Consumer Confidence and May New Home Sales released on Tuesday were quickly overshadowed by the simultaneous Wednesday release of the Final GDP and Durable Goods Orders. The Bureau of Economic Analysis reported that Final GDP shrank 2.9 percent during the first quarter of this year, its biggest decline since the early part of 2009 or the period when the Great Recession was cooling down. The Census Bureau said Durable Goods Orders surprised with a 1 percent decline in May, while Core Durable Goods Orders slid by a marginal 0.1 percent following a 0.3 percent gain in April. Durable goods orders, particularly for machinery, computers and electronic products, appliances and components, transportation, electrical equipment, and defense capital goods fell on weaker demand.

Meanwhile, Japan’s statistics bureau said May consumer prices jumped 3.4 percent in May, marking its fastest advance in 32 years, as an effect of higher sales tax as well as utility charges. This squeezed consumers’ budgets and household spending slumped 8 percent, following a 4.6 percent decline in the previous month.

In other news, China Flash Manufacturing PMI came in better than expected and above the 50 level. On the other hand, Flash Manufacturing PMI and Flash Services PMI for Germany, France, and Eurozone came in weaker than expected. US Flash Manufacturing and Services PMI also showed better-than-expected readings.

Commodities

Like Oil, Gold struggled to push northward last week and keep the momentum on the bulls’ side. However, unlike Oil, Gold was able to make a very marginal bullish weekly close just above the $1,300 level. Gold bulls must try another push toward $1,350 and the critical $1,400. Support is expected to come in around $1,250-80.

Oil bulls tried to test the bearish stronghold right at the $107 level last week, but they were quickly negated by the opposing forces. Overall, price struggled to move northward as expected and traded most of the week within the prior week’s trading range. The bearish weekly close could be a sign that bulls are not strong enough to push price higher, so we could see more zigzagging action around the current price levels next week.

Currency Pairs

After the nerve-wrecking past few weeks, EURUSD has managed to pull off its second straight bullish weekly close just ahead of the ECB Rate Announcement in this coming week. Buyers need to concentrate on a collective push through 1.3800 and toward the resistance highs just ahead of 1.4000. They cannot afford a weekly bearish close towards 1.3500 in the coming week.

GBPUSD fared better than its rival EURUSD as the former clinched its fourth consecutive bullish weekly close this week. The inside week received subdued activity around the new highs, though. Bulls must continue to keep their foothold of the 1.7000.

If we would stop for a while and consider the prior week as a bearish week (since it was barely a bullish weekly close anyway), USDJPY has hit its third consecutive bearish weekly close and it is in critical danger of making a solid push toward multi-month lows. The $100-$101 area is a must-hold for bulls to thwart off this extremely serious threat.

The Week Ahead

Monday’s news activity will kick off early starting with New Zealand’s Building Consents. This will be followed by Japan’s Prelim Industrial Production; Australia’s HIA New Home Sales and MI Inflation Gauge; Germany’s Retail Sales; Eurozone M3 Money Supply, CPI Flash Estimate, and Private Loans; UK Net Lending to Individuals; Canada’s GDP; US Chicago PMI and Pending Home Sales.

On Tuesday, news activity will start quite early as well with Japan’s Tankan indices and Average Cash Earnings; China’s Manufacturing PMI and HSBC Manufacturing PMI; RBA Rate Announcement and Statement; Spain, Italy and Eurozone Manufacturing PMI; Swiss SVME PMI; Germany’s Unemployment Change; UK Manufacturing PMI; and US ISM Manufacturing PMI. Canadian banks will be close to observe Canada Day.

Wednesday will be shorter than usual with Australia’s Trade Balance; UK Nationwide HPI and Construction PMI; Spain’s Unemployment Change; US ADP Non-Farm Employment Change, Factory Orders, and Fed Yellen’s speech.

News activity will pick up on Thursday with China’s Non-Manufacturing PMI and HSBC Services PMI; Australia’s Building Approvals and Retail Sales; Italy, UK and Spain Services PMI; ECB Minimum Bid Rate Announcement and Presscon; Canada’s Trade Balance; US Trade Balance, Jobless Claims, Jobless Rate and ISM Non-Manufacturing PMI.

Friday ends the week with a much abbreviated news session with only RBA Assistant Governor Edey’s speech; Germany’s Factory Orders; and UK Halifax PMI.

New Zealand Hikes Rate as Expected; Australia’s Jobs Data Mixed but Gloomy

The Reserve Bank of New Zealand decided in line with expectations this week, raising the Official Cash Rate by 25 basis points to 3.25 percent. The central bank noted that it will continue reducing the stimulus amid the acceleration seen in the local economy. RBNZ Governor Graeme Wheeler zeroed in on inflation, saying “it is important that inflation expectations remain contained and that interest rates return to a more neutral level.”

In the United States, the Jobless Claims for the prior week grew to 317,000, more than anticipated. This puts the Jobless Claims in an upside path for the second consecutive month.

Meanwhile, data released by the Australian Bureau of Statistics on Thursday showed that 4,800 jobs were removed from the economy in May, while the Unemployment Rate stayed at 5.8 percent for the third month in a row. ANZ Job Advertisements complements the bureau’s data, as the former surprisingly dropped 5.6 percent in May, its first decline since January and the worst since May 2011.

Commodities

Gold made some progress last week after bears struggled to break through the mid-$1,250s during the prior week. Now, it’s the turn of the buyers to show they can muster the strength to break through the $1,300 level again. Potential resistance still up ahead until $1,350, so they should be careful.

After a brief selldown through $102, Oil recovered last week and made a quick dash to break through the multi-month highs. Price closed the week well above the resistance, after reaching as high as the $107s. This week, we’ll wait for a possible retracement back to the $104-$105 area or for a possible continuation of the upmove. As mentioned in the previous weeks, $110-$112 is the key resistance up ahead.

Currency Pairs

EURUSD has moved to the opposite direction of what GBPUSD has taken. This pair is now on the verge of a selldown to multi-month lows if bulls won’t be able to defend the 1.3500 level again in the coming weeks. Resistance remains at 1.3800.

The bullish inside week mentioned previously has snowballed into increased bullish momentum this week. Essentially, bulls successfully defended the mid-1.6700s for several weeks and went on to clinch the 1.7000 level, the highest this pair has reached since August 2009. We expect some major battle around this area before it gets resolved in either direction.

The 102 level in USDJPY continues to attract both buyers and sellers as the pair continues in its merry consolidation path. Bears clearly won last week, but they need to take advantage of the recent bearish tone to attack the 100 level again.

The Week Ahead

On Monday, the news releases will be scattered throughout the day, but activity will be concentrated on the North American session: New Zealand’s Westpac Consumer Sentiment; RBA Assistant Governor Kent’s speech; BOJ Monthly Report; Eurozone CPI; Canada’s Foreign Securities Purchases; US TIC Long-Term Purchases, Empire State Manufacturing Index; Capacity Utilization Rate, Industrial Production and NAHB Housing Market Index.

On Tuesday, news activity will start with RBA’s Monetary Policy Meeting Minutes and New Motor Vehicle Sales; Switzerland’s PPI; UK CPI, RPI, and PPI Input; Germany’s ZEW Economic Sentiment; US Building Permits, CPI, and Housing Starts.

Wednesday will be abbreviated compared to previous sessions but will still be packed with New Zealand’s Current Account; Japan’s Trade Balance; Australia’s CB Leading Index; UK MPC Asset Purchase Facility Votes and Official Bank Rate Votes; Switzerland’s ZEW Economic Expectations; Canada’s Wholesale Sales; US Current Account, FOMC Statement, Federal Funds Rate, and FOMC Economic Projections.

Thursday will start early with New Zealand’s GDP; Switzerland’s SNB Financial Stability Report, Libor Rate Announcement, Press Conference, and Monetary Policy Assessment; UK Retail Sales and CBI Industrial Order Expectations; US Jobless Claims and Philly Fed Manufacturing Index.

Friday ends the week with only a couple of economic releases such as BOJ Kuroda’s speech; Eurozone Account; UK Public Sector Net Borrowing; Canada’s CPI and Retail Sales.

European Central Bank Unleashes Surprise Rate Cut Move; US Trade Balance Worsens

The Bank of Canada and Bank of England both decided in line with expectations this week, keeping the rate at 1 percent and 0.50 percent, respectively. However, the European Central Bank diverged by slashing its Minimum Bid Rate down to 0.15 percent, when the market was expecting a reduction to 0.10 percent.

In the United States, the Non-Farm Employment Change came nearly in line with expectations (217,000 versus 214,000 forecast). Unemployment Rate for May remained at 6.3 percent. The April Trade Balance, meanwhile, reached -$47.2 billion, the worst reading in over 2 years, as exports decrease 0.2 percent and Americans increased purchase of business equipment, automobiles and consumer goods made from abroad.

Meanwhile, Australia had a very rough week with the release of some surprisingly weak economic readings. Building Approvals for April surprised with a 5.6 percent decline, its third negative monthly reading in a row. Trade Balance declined for the first time in 5 months (-AUD0.12 billion versus AUD0.40 billion forecast). On the bright side, Company Operating Profits, Current Account, and GDP came in better than forecast.

 Commodities

Gold had a very uneventful week after posting a decline of over $50 during the prior week. Gold traded within a very tight $17 range this week, bobbing up and down on both sides of $1,250. Bulls would likely push for a move back to the $1,300.

The bearish inside week in the previous week paved way to another sell-down this week. However, the reversal on Thursday gave some life to price and helped reduce the bearish casualty this week. If we don’t see a retest of the 101.50 next week, we could see another test of $104.

Currency Pairs

The extreme volatility on Thursday in EURUSD ended with a bullish tone as Draghi and the ECB decided to cut rates less than expected. This enabled the pair to clinch its second consecutive bullish week. If momentum continues next week, we could see price gain back toward 1.3800.

GBPUSD posted a bullish inside week just above the 1.6800 level. It was a clear win for bulls, as continued decline through 1.6700 would force a move toward 1.6500. Buyers must take out resistance just above the 1.6900 level.

We finally saw a considerable upmove in USDJPY after last week’s silent trading below the 102 level. The pair posted 4 bullish daily closes this week, and it nearly reached the 103 level in the process. Based on recent price action, we could see bulls challenge sellers beyond 104.

The Week Ahead

On Monday, the news releases will be very few: Japan’s Current Account, Bank Lending, and Final GDP; and Canada’s Housing Starts. Today, some states in Australia will observe the Queen’s Birthday, while France, Germany, and Switzerland will observe Whit Monday.

On Tuesday, there will be UK’s BRC Retail Sales Monitor; Japan’s Tertiary Industry Activity; Australia’s NAB Business Confidence and Home Loans; China’s New Loans, CPI and PPI; France’s Industrial Production; UK’s Manufacturing Production; and US JOLTS Job Openings.

Wednesday will be very brief and start early with Japan’s BSI Manufacturing Index, Australia’s Westpac Consumer Sentiment; New Zealand’s REINZ HPI; UK Unemployment Rate and Claimant Count Change; US Federal Budget Balance.

Thursday will be the most news-packed day this week with the release of Reserve Bank of New Zealand’s Rate Announcement, Statement, Press Conference, and Monetary Policy Statement; Australia’s Employment Data and MI Inflation Expectations; ECB Monthly Bulletin; Canada’s NHPI; US Retail Sales, Import Prices, Unemployment Claims, and Business Inventories.

Friday ends the week with the release of Business NZ Manufacturing Index; BOJ’s Monetary Policy Statement; China’s Industrial Production and Fixed Asset Investment; Canada’s Manufacturing Sales; US PPI and Preliminary UoM Consumer Sentiment.

Global Flash Manufacturing PMI Mixed; Japan Core Machinery Orders Tripled

The latest Japan Core Machinery Orders, a measure of new private sector purchase orders for machines, jumped three times its estimate in March. Orders increased 19.1 percent versus 6.1 percent forecast, and the previous month’s revised -4.6 percent.

In the United Kingdom, the MPC Asset Purchase Facility and Official Bank Rate votes remained unchanged. Meanwhile, Consumer Price Index rose 1.8 percent in April following a 1.6 percent gain in March. On the other hand, PPI Input dropped 1.1 percent during the same month. Retail Sales rose 1.3 percent.

In other news, the Flash Manufacturing PMI for Japan, China, and the US fared better than estimates, while that for Germany, France, and the Eurozone were all weaker than expected.

In the United States, Jobless Claims for the prior week increased more than anticipated (326,000 versus 312,000 forecast). Existing Home sales rose less than expected, but New Home sales were better in April.

Commodities

Gold continues to trot along close to the $1,300 level just as it has done for more than five weeks now. The stakes become higher as the price range got narrower this week. $1,260 and $1,320 are the key areas of concern. Bulls and bears need to break one of these areas very soon.

Oil printed its second weekly bullish close after a successful break of the $104 finally stuck on Friday. Price is now poised to break northward ahead of stronger resistance in the $108-$112 area.

Currency Pairs

EURUSD saw terrible price action for the third straight week as buyers failed to regain control of the 1.3700 level. Although the weekly trading range was narrow, this pair is still at risk of continuation downmove toward 1.3300-1.3400.

GBPUSD ended the week lower as the 89-pip upside attack through the 1.6900 last Wednesday has been extinguished completely by declines seen on Thursday and Friday. Sellers sent the pair back below 1.6900 and closed the week in the 1.6830s. Bulls need to stop this and defend the 1.6800 level. Otherwise, GBPUSD could run the risk of moving below 1.6600-1.6700 again in the coming weeks.

USDJPY secured its first bullish weekly close this week thanks to three straight daily gains up until Friday. The pair made a dash northward on Wednesday after price bottomed out at the low-100.80s. The dash higher fell short of closing above the 102 level, though. Next week, this pair needs a strong close above the 103 and attack potential sellers in the mid-104s.

The Week Ahead

Monday will again be a very brief news day as the UK will observe the Spring Bank Holiday, while the United States observe Memorial Day. Critical news to watch out for today will be New Zealand’s Trade Balance; BOJ Monetary Policy Meeting Minutes; Gfk German Consumer Climate; and ECB President Draghi’s speech.

Tuesday will start during the European session with Switzerland’s Trade Balance and Employment Level; UK BBA Mortgage Approvals; US Durable Goods Orders, S&P/CS Composite-20 HPI, CB Consumer Confidence, and Richmond Manufacturing Index.

BOJ Kuroda’s speech will open up Wednesday’s Asian session, followed by the release of New Zealand’s ANZ Business Confidence; Australia’s Construction Work Done; France Consumer Spending; Germany’s Jobless Change; Eurozone M3 Money Supply; Spain’s HPI; and UK CBI Realize Sales.

Thursday will start quite early with Japan’s Retail Sales; Australia’s Private Capital Expenditure; Canada’s Current Account; US Preliminary GDP, Jobless Claims, and Pending Home Sales. France, Switzerland, and Germany will observe Ascension Day.

This coming Friday, we will have New Zealand’s Building Consents; Japan’s Household Spending, Prelim Industrial Production, and Tokyo Core CPI; Germany’s Retail Sales; Canada’s GDP and RMPI; US Core PCE Price Index, Personal Income, Personal Spending, Chicago PMI, and Revised UoM Consumer Sentiment.

Australia, EU, UK Keep Rates Unchanged; Aussie, Kiwi Job Data Diverged

The Reserve Bank of Australia, European Central Bank, and Bank of England all decided to leave their respective interest rates unchanged this week. RBA left its Cash Rate at 2.50 percent, while the ECB and BOE left their rates at 0.25 percent and 0.50 percent, respectively. ECB’s Draghi expressed no willingness to further the central bank’s stimulus measures, but at the same time talked about a possible June action in light of low inflation and a strong forex rate.

In other news, Australia’s Building Approvals dipped 3.5 percent in March, giving this data its 5th decline in the last 6 months. Trade Balance slipped below the 1 billion mark for the first time in 3 months in March at AUD0.73 billion. Employment Change came in almost double of forecast in April while Jobless Rate was unchanged at 5.8 percent.

In contrast, New Zealand Jobless Rate stood at 6 percent for the second month, while Employment Change increased slightly to 0.9 percent.

Spanish Unemployment Change came in more than double its forecast at -111,565.

Commodities

Gold bolted the $1,300 level on Monday and reached a high of $1,315. This turned out to be the high of the week as price pretty much declined from then on. This price action indicates Gold is not yet prepared to move higher and it still prefers range trading. Keep an eye on $1,250-80.

Oil saw mild trading action this week, closing virtually unchanged compared to last week’s close. Price topped out just above 101 on the third daily attempt on Friday after 2 consecutive days of misses. 102-104 likely has more lurking sellers.

Currency Pairs

EURUSD has been slammed lower this week, particularly on Thursday and Friday after the pair failed to thrust through the key 1.40 level. Price dropped 250 pips on those 2 days, and closed the week near the week’s low at 1.3757. If momentum carries forward, we’ll likely see an attack on 1.3600.

GBPUSD reached another new high this week, but the pair ended close to its weekly low just like EURUSD. The first attempt at 1.70 failed and it was followed by heavy selling that reached the mid-1.6800s. Bulls must contain this selling by fortifying 1.6700-1.6850.

USDJPY bulls remain vulnerable as they fail to break through 103. If we look back, this pair has been in consolidation since February, but in the last several weeks, we have seen dominance of bears thanks to their strong defense of the 103 level. If their dominance continues, we could see a move toward 100 in the next week or so.

The Week Ahead

This week, Monday will be a very brief news day with Japan’s Current Account; Australia’s NAB Business Confidence; Switzerland’s Retail Sales; and US Federal Budget Balance.

Tuesday will get started quite early with UK’s BRC Retail Sales Monitor; Australia’s Annual Budget Release, HPI and Home Loans; China’s Industrial Production and New Loans; Germany’s ZEW Economic Sentiment; US Retail Sales and Import Prices.

Wednesday will get busy very early with New Zealand’s RBNZ Financial Stability Report and Retail Sales; UK BOE Inflation Report, Claimant Count Change and Jobless Rate; Switzerland’s ZEW Economic Expectations; and US PPI.

Thursday’s action will start very early as well with New Zealand’s Business NZ Manufacturing Index and Annual Budget Release; Japan’s Prelim GDP and BOJ Kuroda’s speech; Australia’s New Motor Vehicle Sales; France and Germany Prelim GDP; Euro-area CPI and Flash GDP; Canada’s Manufacturing Sales; US CPI, Jobless Claims, Empire State Manufacturing Index, Industrial Production, and Philly fed Manufacturing Index.

On Friday, news activity will significantly decrease with Japan’s Revised Industrial Production; France Prelim Non-farm Payrolls; Canada’s Foreign Securities Purchases; and US Building Permits, Housing Starts, and Prelim UoM Consumer Sentiment.

Fed Funds Rate Remains Unchanged; US Jobs Data Topped Estimates

The US Federal Reserve on Wednesday decided to leave the Federal Funds Rate at less than 0.25 percent. The Fed noted that there was a pickup in activity and the economy is gaining further momentum. It expressed that it would continue the process of reducing its bond purchases.

Aside from the Fed’s rate announcement, the biggest draw this week was the US Bureau of Labor Statistics’ release of the jobs data. BLS reported that Non-Farm Employment Change for April increased by 288,000, the biggest monthly advance since 2012. The prior reading was also revised higher, from 192,000 to 203,000. Moreover, the Unemployment Rate improved from 6.7 percent in March to 6.3 percent.

In other US news, Pending Home Sales for March came in over 3 times better than anticipated. Meanwhile, Chicago PMI surged past the 60 level to 63.0 in April, its best level in the last 6 months. On the other hand, Jobless Claims for the previous week increased for the second week in a row. 344,000 Americans filed for their unemployment insurance claims last week, compared to median forecast of 317,000.

In other news, Spanish Unemployment Rate ticked higher, German Unemployment Change declined and beat forecast for the fifth month, while Italian Unemployment Rate and the Eurozone Unemployment Rate for March were unchanged.

Commodities

Gold failed to close the week above $1,300 this time, but price indicated that $1,275 has become a support zone for bulls. It would be good to see a strong advance through $1,320-30 in the coming week, followed by a weekly close near the highs or on new highs.

Oil is now on its second weekly decline after the 100 level gave way easily to selling pressure. The weekly low below 99 could indicate price is ready to travel to 96-97 in the coming weeks.

Currency Pairs

Overall, it was a good week for EURUSD which has now clinched its second bullish weekly close in a row. The bullish picture for this week was untainted despite Friday’s volatility brought about by the US jobs numbers. In the coming week, we could see the 1.3950s challenged by eager bulls.

GBPUSD closed lower on Friday, but that did not stop the pair from printing its fourth consecutive bullish weekly close. Now, it is possible that we will see a strong footing above 1.6900 in the coming week or so.

Despite the volatility on Friday, USDJPY has remained locked in consolidation and it has now been so for nearly 2 weeks. The 102 level continues to exert influence and bulls aren’t strong enough to push price through 103. Expect the same action if both sides won’t be able to exert some dominance.

The Week Ahead

Monday offers several key economic news such as Australia’s Building Approvals and ANZ Job Advertisements; China’s HSBC Final Manufacturing PMI; EU Economic Forecasts; Eurogroup Meetings; and US ISM Non-Manufacturing PMI.

Tuesday will get busy as usual, this time with Australia’s Trade Balance and RBA Cash Rate Announcement and Statement; Services PMI for Italy, UK, Spain; ECOFIN Meetings; US and Canada Trade Balance; Canada’s Ivey PMI.

Wednesday will be a bit less busier with New Zealand’s Jobless Rate and Employment Change; BOJ’s Monetary Policy Meeting Minutes; Australia’s Retail Sales; German’s Factory Orders; Canada’s Building Permits; and US Preliminary Unit Labor Costs and Nonfarm Productivity and Fed Chair Yellen’s speech.

Thursday will have Australia’s jobs data; China’s Trade Balance; Germany’s Industrial Production; Switzerland’s CPI; BOE Asset Purchase Facility and Official Bank Rate votes as well as MPC Rate Statement; ECB’s Minimum Bid Rate and Press conference; US Jobless Claims.

On Friday, the RBA will release its Monetary Policy Statement, followed by China’s CPI and New Loans; Germany’s Trade Balance; UK’s Trade Balance and Manufacturing Production; Canada’s jobs data; US JOLTS Job Openings.

New Zealand Cash Rate Raised, UK Official Bank Rate Unchanged

The Reserve Bank of New Zealand on Thursday raised its Official Cash Rate by another 25 basis points to 3 percent, citing possible continuation of its country’s economic expansion as the global financial condition remains accommodating. Future rate hikes were also alluded to by the central bank.

In the UK, the Monetary Policy Committee or MPC voted to keep the Asset Purchase Facility and Official Bank Rate unchanged. In the news front, Public Sector Net Borrowing came in at GBP4.9 billion, much better than the GBP8.9 billion expected by analysts. The previous reading was also revised better. CBI Realized Sales also came much higher than expected (30 versus 18 forecast); Retail Sales was slightly better; while CBI Industrial Order Expectations declined for the first time in three months.

In the United States, Durable Goods Orders, particularly the Core data, came in much higher than expected. Existing Home Sales slightly better but this was negated by much-weaker New Home Sales. Jobless Claims for the prior week jumped to 329,000, higher by 20,000 compared to its median estimate.

Commodities

Gold declined to new monthly lows this week but somehow buyers managed to resuscitate this on Thursday when it jumped back close to the weekly open. The slight advance on Friday enabled Gold to close the week, surprisingly, higher and back above the $1,300 level. Bulls have the chance of defending $1,300 again, so they can attempt for higher highs.

Oil shied away from reaching new 8-month highs last week after bulls struggled to break the 105 barrier. The lack of upside momentum opened the downside, and sellers quickly pounced on the opportunity and continue to hold control. With $103 down to $101 quickly eradicated, bears are setting their sights on the 96-98 area.

Currency Pairs

EURUSD struggled to find direction again this week as evidenced by the 51-pip weekly trading range. The pair reached a marginal new weekly low but eventually closed the week in the green. Bulls need to have more participation this week so they can revisit the 1.39s.

Although it had a wider weekly trading range, GBPUSD did not fare much better than its rival EURUSD. The former faced headwinds in its quest for new multi-year highs. Bulls should just keep trying to prevent any attempts to revisit or break 1.6700.

USDJPY failed to make a follow-through move again this week, managing just 76 pips of weekly movement, and this was mostly to the downside. 101 and 102 are back on the radar. It seems like buyers will be having a hard time defending the lows and reaching the 104s in the remaining part of April.

The Week Ahead

For Monday, April 28, there will only be a few economic releases such as Japan’s Retail Sales, Germany’s Bundesbank Monthly Report, and US Pending Home Sales.

On Tuesday, news activity will start early with New Zealand’s Trade Balance; Gfk German Consumer Climate and German Preliminary CPI; Eurozone M3 Money Supply; UK Prelim GDP; US CB Consumer Confidence; and Bank of Canada Governor Poloz’s speech. Japan will observe Showa Day today.

Wednesday will have the most activity this week with New Zealand’s Building Consents and ANZ Business Confidence; Japan’s Preliminary Industrial Production, Average Cash Earnings, and Monetary Policy Statement, and BOJ Outlook Report; Germany’s Retail Sales and Unemployment Change; France’s Consumer Spending; Spain’s Flash GDP; US ADP Non-Farm Employment Change, Advance GDP, Chicago PMI, Employment Cost Index, FOMC Statement, and Federal Funds Rate announcement; Canada’s GDP, RMPI, and IPPI.

Thursday will have China’s Manufacturing PMI; Australia’s Import Prices; UK Nationwide HPI, Manufacturing PMI and Net Lending to Individuals; EU Economic Forecasts; US Fed Chair Yellen’s speech, Unemployment Claims, Personal Spending, and ISM Manufacturing PMI.

Friday’s news highlights will include Japan’s Household Spending; Australia’s HIA New Home Sales and PPI; Spain’s and Italy’s Manufacturing PMI; UK Construction PMI; Eurozone Jobless Rate; US Non-Farm Employment Change, Jobless Rate, and Factory Orders.

EURUSD Declines, GBPUSD Climbs to a new Multi Year High

The Bank of Canada on Thursday announced that its overnight rate would be put on hold at exactly 1 percent.

Meanwhile, the United States saw a dominance of favorable news this week. The latest Empire State Manufacturing Index surprisingly declined to 1.3 when analysts forecasted a rise to 8.2 from 5.6 in the previous month. TIC Long-Term Purchase jumped to nearly 3 times its forecast while Philly Fed Manufacturing Index came in almost double its median estimate. Retail Sales, Jobless Claims, Capacity Utilization Rate, and Industrial Production came in better than expected.

In other news, Italy’s Trade Balance rose just over double its forecast at EUR2.62 billion. In the UK, HPI was much better but PPI Input declined further according to its latest data.

Commodities

Gold witnessed a mild decline this week after price failed to secure a spot above the $1,300 level. The $43 drop on Wednesday sealed the fate of buyers this week as they were unable to recover since. Buyers should keep the support at $1,270-80 fully supported to prevent a move back to $1,200 or even lower.

Oil saw a marginal gain this week, giving black gold its second consecutive weekly advance. This advance brings oil closer to the multi-month high set last September. Having said that, bulls need to make sure $104 hold this week. Otherwise, price could dwindle back to the $102s.

Currency Pairs

After rallying over 200 pips in the previous week, EURUSD struggled to keep the momentum up and instead declined this week. The gap followed by a weekly trading range of just over 70 pips, which was unusual, and probably indicates bulls are not prepared to bring price higher. Keep an eye on the 1.3900 level.

GBPUSD had a much better week than EURUSD. The former climbed for the second week in a row and touched a new multi-year high in the process. Will bulls be able to continue control of support around 1.6700? This support area is very important for them.

USDJPY skirted another disaster this week, as price recovered over half of the previous week’s 200-pip drop. This week and throughout the remaining part of April, buyers need to secure a strong foothold above 104 in order to break out of this consolidation.

The Week Ahead

Except for the release of Japan’s Trade Balance, US Chicago Fed National Activity Index, and US CB Leading Index, Monday will be very quiet with New Zealand, Australia, Germany, Switzerland, France, Italy, and the UK celebrating Easter Monday.

Tuesday will have slightly more activity with Australia’s CB Leading Index; Canada’s Wholesale Sales; Euro-area Consumer Confidence; US HPI, Richmond Manufacturing Index, and Existing Home Sales.

On Wednesday, we will witness usual news activity. There will be Australia’s CPI; China’s HSBC Flash Manufacturing PMI; French, German, and Euro-area Flash Manufacturing PMI and Services PMI; UK Public Sector Net Borrowing, CBI Industrial Order Expectations, and MPC Asset Purchase Facility and Official Bank Rate votes; Canada’s Retail Sales; US New Home Sales and Flash Manufacturing PMI.

Thursday will get busy very early with RBNZ’s Official Cash Rate announcement and statement; China’s CB Leading Index; Switzerland’s Trade Balance; Germany’s Ifo Business Climate; UK CBI Realized Sales; US Jobless Claims and Durable Goods Orders.

This Friday, Australia and New Zealand will celebrate ANZAC Day. Italy and will also be on holiday to celebrate Liberation Day. Friday’s news highlights will include Japan’s Tokyo Core CPI and All Industries Activity; UK Retail Sales and BBA Mortgage Approvals; US Flash Services PMI and Revised UoM Consumer Sentiment.

Bank of England Put Rates on Hold; Favorable US, UK Data Seen

The United States and United Kingdom shone as both countries saw a slew of favorable economic news releases this week.

The latest US JOLTS Job Openings data showed a 4.17 million increase following January’s revised 3.87 million gain. Jobless Claims for the prior week was lower at 300,000 (versus 314,000 forecast) while the Federal Budget Balance came out to be just -$36.9 billion when analysts expected -$76.5 billon. Meanwhile, PPI stood at 0.5 percent and the preliminary University of Michigan Consumer Sentiment came in at 82.6.

In the United Kingdom, the latest Manufacturing & Industrial Production came out much better than forecast at 1 percent and 0.9 percent, respectively. UK Trade Balance also came lower than expected at -9.1 billion. Meanwhile, the latest data from the Bank of England showed the Asset Purchase Facility was maintained at GBP375 billion and the Official Bank Rate stayed at 0.50 percent.

Commodities

Gold had a good run as price climbed on the final four days of the week. Now that bulls regained control of the $1,300 level, they must try to aim for a move through $1,350. This area could present itself as the first tough resistance ahead.

Oil had roughly the same action as Gold this week, climbing nearly 4 of the 5 days and creating 5 consecutive higher highs. Price closed in on March 3’s $105.20 high in the process ($104.40 high on Friday), but sellers quickly stepped in and hold down price to close the week close to $103. Bulls should expect more selling toward $102-$103.

Currency Pairs

EURUSD had a decent run-up following what seemed like an imminent drop due to Friday’s bearish price action. The pair’s action started off on Monday in the upper-1.3600s and closed the week just off the 1.3900 level. Bulls may try to challenge the 1.4000 level again soon.

GBPUSD nearly mimicked EURUSD’s price action this week, except the former retraced about 30 percent of the week’s uphill climb during the last two days. To keep the ball firmly in bulls’ hold, 1.6700 should hold in the coming week.

A follow-through decline was seen in USDJPY, coming off a 90-pip drop seen on Friday. The pair cut through 103 and 102 easily and proceeded to challenge the low-101s. A break of 101 could open up 97-99.

The Week Ahead

Monday will have a dearth of news releases, namely China’s New Loans and M2 Money Supply; Euro-area Industrial Production; and US Retail Sales and Business Inventories.

Tuesday will get a lot more active with UK’s BRC Retail Sales Monitor; RBA’s Monetary Policy Meeting Minutes; UK CPI, PPI Input, RPI, and HPI; Germany and Eurozone ZEW Economic Sentiment; Canada’s Manufacturing Sales; US CPI, Empire State Manufacturing Index; NAHB Housing Market Index, and Federal Reserve Chair’s Yellen’s speech.

Wednesday will be very busy and start quite early with New Zealand’s CPI, followed by China’s Industrial Production, GDP and Fixed Asset Investment; BOJ Kuroda’s speech; UK Claimant Count Change and Jobless Rate; Euro-area CPI; Canada’s Foreign Securities Purchases, BOC Monetary Policy Report and Rate Statement and Announcement; US Building Permits and Housing Starts.

Thursday will have lower news activity, with news releases such as BOJ Kuroda’s speech; Australia’s NAB Quarterly Business Confidence index; and New Motor Vehicle Sales; Euro-area Current Account; Germany’s PPI; US Jobless Claims and Philly Fed Manufacturing Index.

Friday will only have Japan’s Tertiary Industry Activity as sole news release. New Zealand, Australia, Switzerland, Germany, the UK, and Canada will be on holiday (Good Friday).