General

The European Central Bank and the Bank of Canada both decided to leave rates unchanged (0.05 percent and 0.75 percent, respectively) this week.

A barrage of news came out of China this week. Trade Balance surplus shrunk by a huge margin to CNY3.1 billion in March. New Loans surged past expectations at CNY1,180 billion while M2 Money Supply came in below forecast. Forecast for the China GDP was spot on at 7 percent while Industrial Production came in weaker at 5.6 percent. Finally, Fixed Asset Investment and Retail Sales were slightly lower than forecast at 13.5 percent and 10.2 percent, respectively.

In other news, UK Jobless Rate was as expected 5.6 percent. Meanwhile, Australia enjoyed a slight improvement in Jobless Rate (6.1 percent versus 6.2 percent previously).

Statistics Canada revealed Retail Sales surge 1.7 percent in February, while the core reading also surged 2 percent. CPI was higher than expected at 0.7 percent.

In the United States, Jobless Claims for the prior week jumped to 294,000, higher by 20,000 compared to its median estimate. Philly Fed Manufacturing Index for the month of April came in better than anticipated at 7.5. The Preliminary UoM Consumer Sentiment was much better at 95.9 compared to its 93.8 median estimate.

Commodities

Gold was in range mode and spent most of its time below $1,200. Bulls still have a chance to keep Gold in their control by pushing it toward $1,250.

Oil managed to move through the resistance area and reach the low-$57s before ending the week just below the $56 level. It would be interesting to see if the $53 to $55 area would hold in the next few days. If it does, we could see higher prices soon.

Currency Pairs

It was a good week for EURUSD bulls as the pair rode the short-term oversold trend higher by about 330 pips. There is still a lot of work to do as they have to break past 1.100 very soon. Downside risk remains high.

Pip-wise, GBPUSD did much better again this week compared to EURUSD. Cable rose nearly 500 pips and managed to close right at the short-term range resistance area at 1.4957 after reaching as high as 1.5052. The next major hurdle is 1.5500.

USDJPY printed nearly 230 bearish pips last week as expected sellers at the 120 level kept a lid on this pair. Bulls need to recapture the 120 level.

The Week Ahead

Monday will be very quiet in terms of economic releases. There will only be New Zealand’s Consumer Price Index; Japan’s Tertiary Industry Activity; German Bundesbank’s Monthly Report; and BOC Governor Poloz’s speech.

On Tuesday, news activity would pick up slightly with Australia’s Monetary Policy Meeting Minutes; Germany and Eurozone ZEW Economic Sentiment; Canada’s Wholesale Sales and Annual Budget Release.

Wednesday will have as much activity as Tuesday. The list includes Japan’s Trade Balance; Australia’s Consumer Price Index and Trimmed Mean CPI; UK MPC Official Bank Rate and Asset Purchase Votes; Italy’s Retail Sales; US Existing Home Sales.

Thursday will have the most activity this week. The list includes Australia’s NAB Quarterly Business Confidence; China’s HSBC Flash Manufacturing PMI; Switzerland’s Trade Balance; French, German, and Euro-area Flash Manufacturing PMI and Services PMI; UK Public Sector Net Borrowing and Retail Sales; Spain’s Jobless Rate; US Jobless Claims, New Home Sales and Flash Manufacturing PMI.

Finally, Friday will cap off the week with Germany’s Ifo Business Climate; Eurogroup meetings; US Durable Goods Orders; and BOC Governor Poloz’s speech.

The German Federal Employment Agency broke the great news that Jobless Rate fell to a record low of 6.4 percent in March as the labor market continues to improve. Unemployment Change saw a decline of only 15,000. Lower gas prices favor consumers while exports are boosted by a weaker Euro.

In the United Kingdom, Office for National Statistics reported that Current Account for the fourth quarter of 2014 breached median expectations at –GBP25.3 billion, while the prior figure was revised negatively. Final GDP stood at 0.6 percent. Construction PMI fell short of forecast, 57.8 versus 59.7.

In the United States, Trade Balance improved to -$35.4 billion, compared to median expectation for -$41.3 billion. Last week’s Jobless Claims beat expectations (268,000 versus 286,000 forecast).

The US Bureau of Labor Statistics reported that US Non-Farm Employment Change surprised to the downside as it came in just over half of forecast. Only 126,000 workers were added, compared to 246,000 expected. This is the first 100k-level figure since August. Also, the February figure was downgraded, from 295,000 to 264,000. Jobless Rate stayed at 5.5 percent for the second month in March. Meanwhile, Average Hourly Earnings improved 0.3 percent.

Commodities

Gold started the week with a quick dash downward starting just beneath $1,200, but price has quickly recovered since then. Gold ended the week just above $1,200, giving bulls the incentive to push price higher. If this is an initial bullish sign, we could see Gold hover close to the $1,250 area or higher.

Oil failed to reclaim the $50 level this week but the bullish weekly close could offer another stab to the upside. There are plenty of resistance up to $55, and bulls need to prove they can cut through this area. Consolidation at the current area is more favorable to bears.

Currency Pairs

EURUSD managed to clinch its third weekly bullish close but it is still confined below 1.1000-1050 (an area high printed three weeks ago). The next aim is to go for 1.1300-1.1400 to continue chopping the bearish momentum in this pair.

GBPUSD is in a much weaker situation if you look at the weekly chart. Cable continues to struggle below the 1.5000 major level, and this indicates bearish action is still in play. Short-term target right now is the 1.5200 zone.

USDJPY is on the verge of a possible strong downside move. If successfully initiated, the downmove could bring this pair toward 117.00-50 soon. Alternatively, we could see further tug of wars around the current area.

The Week Ahead

New Zealand and Australia will exit DST (Daylight Saving Time) on April 4 (Saturday) and April 5 (Sunday), respectively.

Monday will be quiet due to observance of Easter Monday in New Zealand, Australia, Switzerland, France, Germany, and the UK. China will observe Tomb Sweeping Day. Spain will publish Unemployment Change, followed by Canada’s Ivey PMI and US ISM Non-Manufacturing PMI.

Tuesday will be busy with Australia’s Retail Sales, ANZ Job Advertisements, and RBA rate announcement and statement; Switzerland’s Foreign Currency Reserves; UK Halifax HPI; Italy, UK, and Spain Services PMI; and US JOLTS Job Openings.

Wednesday will have lower news activity with Japan’s Current Account, Monetary Policy Statement, and BOJ presscon; Germany’s Factory Orders; Switzerland’s CPI; UK BOE Credit Conditions Survey; Eurozone Retail Sales; and US FOMC Meeting Minutes.

Thursday will have China’s New Loans and M2 Money Supply; UK Trade Balance, BOE Rate statement and announcement; Canada’s Building Permits and NHPI; and US Jobless Claims.

Finally, Friday will have China’s PPI and CPI; Australia’s Home Loans; UK Manufacturing Production; Canada’s Employment data; and US Import Prices.

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.

Commodities

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.

Currency Pairs

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.

In the United States, Unemployment Claims rose by 313,000 in the previous week, compared to the 288,000 forecast. Meanwhile, the February CB Consumer Confidence declined to 96.4 while the previous reading was revised higher, from 102.9 to 103.8.

Federal Reserve Chair Yellen provided written testimony to both the Semiannual Monetary Policy Report before the House Financial Services Committee and Senate Banking Committee, in Washington DC on Tuesday and Wednesday. She gave similar remarks and noted that, given the improving employment conditions, the Fed is now waiting for the right balance of inflation date before raising the federal funds rate.

The US National Association of Realtors reported that Existing Home Sales cooled in January to 4.82 million, after a revised-better reading of 5.07 million for December. New Home Sales grew 481,000 in January, just a thousand less than December’s reading. Pending Home Sales climbed 1.7 percent.

US Consumer Price Index was a mixed bag in January. Bureau of Labor Statistics said the headline CPI was -0.7 percent, while the core CPI edged up 0.2 percent.

Surprising contraction in the US Midwest is seen as the Chicago PMI proved very weak at 45.8 in February, its 5.5-year low, the ISM-Chicago revealed on Friday.

In other news, UK CBI Realized Sales plunged in February to +1, from +39 back in January, as lower sales plagued department stores and supermarkets. February’s reading is its weakest since November 2013.

Commodities

This week, Gold’s decline to $1,190 was met by buyers easily, and these buyers brought price back up through the $1,200 level. Resistance lies shortly ahead, from $1,250 through $1,300. Moreover, there is a descending trendline, which could pose as additional ceiling.

Oil remained glued to the $50 level this week, and price garnered considerable volatility, between $47 and $51 for the most part, on Wednesday and Thursday. The weekly close at mid-$49 might be a signal that price would do another attack on the recent lows.

Currency Pairs

EURUSD fell to its weakest weekly close in five weeks as 1.1400 capped bulls’ efforts to advance. Like Oil, the EURUSD seems ready to revisit its own lows. A bullish move through 1.1500 is necessary to prevent further declines from happening.

As expected, the 118 area proved to be supportive of bulls’ efforts and this week USDJPY clinched its third bullish weekly close in the last four weeks. Immediate resistance comes at 120 and 120.50.

GBPUSD posted its fourth bullish weekly close in the last five weeks. However, this week’s upmove proved weaker than it shows, after the pair dropped nearly 160 pips on Thursday, which erased the week’s bullish efforts. A wide band of resistance is seen at 1.5500 to 1.5600.

The Week Ahead

Monday will be quite active with New Zealand’s Overseas Trade Index; Australia’s Company Operating Profits and HIA New Home Sales; China’s HSBC Final Manufacturing PMI; Manufacturing PMI for Spain, Italy and the UK; UK Net Lending to Individuals; Eurozone CPI Flash Estimate and Jobless Rate; Canada Current Account; and US Core PCE Price Index, Personal Income, Personal Spending, and ISM Manufacturing PMI.

Tuesday will be compact but quite hectic with Australia’s Building Approvals, Current Account and RBA Cash Rate Announcement and Statement; Japan’s Average Cash Earnings; Spain’s Unemployment Change; UK’s Construction PMI; Euro-area PPI; BOE Gov. Carney’s speech; and Canada’s RMPI and IPPI.

Wednesday will stay busy with Australia’s GDP; UK Halifax HPI and Services PMI; Eurozone Retail Sales; Services PMI for Spain, Italy, the UK; US ADP Non-Farm Employment Change, Beige Book, and ISM Non-Manufacturing PMI; Bank of Canada Rate Announcement and Rate Statement.

Thursday’s action starts early with Australia’s Retail Sales and Trade Balance; Germany’s Factory Orders; BOE Rate Announcement and Statement; ECB Rate Announcement and Press Conference; Canada’s Ivey PMI; and US Unemployment Claims and Factory Orders.

Finally, on Friday, there will be Switzerland’s Foreign Currency Reserves and CPI; Germany’s Industrial Production; UK Consumer Inflation Expectations; Eurozone Revised GDP; Canada and US Trade Balance; Canada’s Labor Productivity; and US Employment data.

The latest data from Statistics Canada revealed a 2.5 percent surge in Wholesale Sales to CAD55.4 billion in December, led by improved sales in 6 of the 7 subsectors monitored. In dollar terms, the motor vehicle and parts subsector spearheaded the month’s gains, as the motor vehicle industry posted the highest recorded sales for the subsector and industry. The miscellaneous subsector recorded its fifth straight month of higher sales, led by sales in the chemical (except agricultural) and allied product industry and the agricultural supplies industry. The machinery, equipment and supplies subsector was the sole decliner. Seven provinces (98 percent of the total wholesale sales) registered gains, led by Ontario.

In the United States, Unemployment Claims rose by 283,000 compared to the 293,000 forecast. Meanwhile, the February Flash Manufacturing PMI came in slightly better at 54.3. The Philly Fed Manufacturing Index and Empire State Manufacturing Index were both weaker than anticipated (and 7.8, respectively). The Philly figure was the lowest in a year.

In other news, the UK MPC Asset Purchase Facility and Official Bank Rate votes showed no change. The Claimant Count Change, Average Earnings Index, and Unemployment Rate all came in better than forecast (-38,600, 2.1 percent, and 5.7 percent, respectively).

Commodities

Gold’s nearly-$40 decline this week has given it its 4th consecutive weekly decline, following a top out just right above the $1,300 level. Price is now set to test the multi-year low printed on November at $1,131. A break of this area would enable a move toward $1,000.

Oil struggled to keep a foothold at the $54 level. In fact, price immediately reversed after reaching this area. Oil is back at the $50 level and bulls should be very careful as this could open up to another strong bearish leg toward $40.

Currency Pairs

EURUSD has been stuck in a very tight 170-pip range this week. Bulls failed to take advantage of the opportunity to diffuse the strong bearish momentum. A break of 1.1300 could send price back to 1.1100 and threaten to move to lower lows.

USDJPY barely moved this week, proving 119 is a magnet for both sides. Short-term trend is up with a tinge of consolidation bias. 118 remains supportive of bulls’ efforts.

GBPUSD was able to hit its fourth consecutive weekly high, but the fourth straight bullish weekly close was elusive. The pair closed the week lower than its open, albeit the weekly move was minimal. Price still needs to punch through resistances and toward 1.5800 to keep the bullish hope, no matter how small right now, alive.

The Week Ahead

Monday will be quiet except for Japan’s Monetary Policy Meeting Minutes; Germany’s Ifo Business Climate; UK CBI Realized Sales; and US Existing Home Sales.

Tuesday will have more activity with New Zealand’s Inflation Expectations; Switzerland’s Employment Level; Eurozone CPI; UK Inflation Report Hearings; Eurogroup Meetings; ECB Draghi’s speech; US CB Consumer Confidence and Fed Chair Yellen’s testimony.

Wednesday will be a brief news day with Australia’s Construction Work Done and Wage Price Index; China’s HSBC Flash Manufacturing PMI; UK BBA Mortgage Approvals; and US New Home Sales and Fed Chair Yellen’s testimony.

Thursday’s action will start early with New Zealand’s Trade Balance; Australia’s Private Capital Expenditure; Germany’s Gfk Consumer Climate and Unemployment Change; Eurozone’s M3 Money Supply and Private Loans; UK Second Estimate GDP; Canada’s CPI; Eurozone’s Targeted LTRO; US Unemployment Claims and Durable Goods Orders.

Friday will still be active with New Zealand’s Building Consents and ANZ Business Confidence; Japan’s Preliminary Industrial Production, Household Spending, Retail Sales, and Tokyo Core CPI; Switzerland’s KOF Economic Barometer; Germany’s Prelim CPI; France’s Consumer Spending; US Chicago PMI, Prelim GDP, Revised UoM Consumer Sentiment.