Sample Category Title

Canadian Dollar jumps after stronger than expected GDP report. Real GDP grew 0.3% mom in January, well above expectation of 0.1% mom. It's also strong enough to offset contraction in both December and November. On three month rolling average basis, real GDP edged up 0.1%, unchanged from the three-month rolling average in December. Manufacturing and construction contributed most to January's GDP growth. Ning and oil and gas extraction contracted.

Full GDP release here.

Also from Canada, IPPI rose 0.3% mom in February while RMPI rose 4.6% mom.

Entering into US sessions, Sterling is the strongest one for today as it recovered ahead of near term support level against both Dollar and Yen. Some might attribute the U-turn in Pound to speculations that PM May could finally get the Brexit Withdrawal Agreement through the Commons today. There is ground for such expectation as more and more Conservatives who voted against the deal in MV2 have now turned, including Dominic Raab and Boris Johnson. However, without support from Northern Ireland's DUP, the chance of getting through is still slim. Sterling's rebound is likely more about lightening up positions ahead of this crucial vote and the weekend.

Staying in the currency markets, it's rather quiet elsewhere. New Zealand Dollar is second strongest, paring some of this week's steep losses. Australian and Canadian Dollar follow. Yen is weakest one for today, followed by Swiss Franc. Risk aversion eased with rally in European and Asian stocks. German yield is also recovering, which US 10-year yield is regaining 2.4 handle.

A bunch of data is released in European session but they received little attention. UK Q4 GDP was finalized at 0.2% qoq, unrevised. Total business investment dropped -0.9% qoq, revised up from -1.4% qoq. Current account deficit narrowed to GBP -23.7B. M4 money supply rose 0.3% mom in February. Mortgage approvals dropped to 64k in February.

Germany unemployment dropped -7k in March, versus expectation of -10k. Unemployment rate dropped 0.1% to 4.9%, matched expectations. Retail sales rose 0.9% mom in February, way better than expectation of -0.9% mom. Import price index rose 0.3% mom, below expectation of 0.5% mom. Swiss KOF leading indicator improved to 97.4 in March, up from 93.0.

In Europe, currently:

• FTSE is up 0.31%.
• DAX is up 0.88%.
• CAC is up 0.80%.
• German 10-year yield is up 0.0176 at -0.049.

Earlier in Asia:

• Nikkei rose 0.82%.
• Hong Kong HSI rose 0.96%.
• China Shanghai SSE rose 3.20%.
• Singapore Strait Times rose 0.29%.
• Japan 10-year yield rose 0.0034 to -0.09.

Sterling slips amid Brexit chaos

The pound is looking a little soft after another chaotic week in Parliament, one in which MPs decisively took back control before indecisively failing to agree on an alternative. Theresa May finally won the backing of numerous hard-line Brexiteers – although her deal being better than no Brexit is hardly a ringing endorsement – before one almost immediately claimed her deal is dead. And the speaker attempted to thwart attempts for a third vote on her deal before agreeing that half of the deal is different enough, unfortunately though that’s the half that has drawn the most criticism and may well be rejected today. Chaos.

It may be surprising therefore to see that the pound has turned south this week but hasn’t broken any major levels, just moved back to the lower end of its recent range, so traders aren’t too gloomy. The reason for this is simple, no-deal remains possible but unlikely. The realistic worst case scenario right now is a long extension and that has its positives and negatives, from a sterling perspective. On the one hand, it’s another prolonged period of economic uncertainty but one after which we could end up with a softer Brexit than that on offer, or none at all.

Strong dollar sends gold south

It’s been a good couple of days for the dollar, albeit ones that probably owe more to other currencies being weak than the dollar necessarily being strong. Still, it goes to show that once again, the dollar remains a favourite among traders when times are tough, aided of course by the strong US economy and enviable – albeit slowing – growth.

Naturally, a stronger dollar isn’t ideal for gold which had seen something of a resurgence. It had already started to stumble, so it’s no surprise that this has further taken the shine off it. Near-term headwinds look likely to remain for the yellow metal which could see recent support around $1,280 come under pressure. Next support below here could be found around $1,260 but ultimately, the dollar – and therefore weakness elsewhere – will likely prove decisive on the downside potential here.

Oil prices edge higher on trade optimism

Oil prices are a little higher on Friday, with positive US/China trade headlines certainly supportive. This remains the greatest risk for the global economy so positive headlines are naturally risk positive. It’s certainly helping equity markets.

Inventory data this week has shown slightly higher builds than expected which may be holding oil back. US oil rig data today will be closely watched as ever, with the trend since November heading in the wrong direction, although with the country pumping at record levels, it’s clearly not having a negative impact yet. That can surely only last so long though if the trend continues.

The Canadian dollar has edged higher on Friday, erasing the losses seen on Thursday. Currently, the pair is trading at 1.3415, down 0.20% on the day. On the release front, it’s a busy day on both sides of the border. Canada releases the monthly GDP report, which is expected to post a gain of 0.1% after two straight declines. In the U.S., consumer data will be in focus, with the release of Core PCE Price Index, Personal Spending and UoM Consumer Sentiment.

Investors are keeping a close eye on the ebb and flow of the U.S.-China trade talks, which continues to affect the movement of currency markets. The negotiations between the sides continues and there have been reports of progress. However, optimism waned on Thursday, after a senior U.S. official said that it could be months before a deal is reached. These remarks have raised risk aversion and boosted the dollar.

Global trade tensions have weighed on inflation levels in the developed economies, and the U.S. is no exception. However, with the Fed saying it will put a hold on rates until 2020, could that change? At the Fed policy meeting, policymakers lowered their inflation forecast for 2020, citing weakness in the Chinese and European economies. However, the chief economist of Credit Suisse, James Sweeney, has taken a different tack, saying that U.S. inflation could climb as high as 2.3% next year, in response to the lack of rate hikes. Sweeney said that although inflation remains below the Fed target of 2.0%, there are signs in the services sector of inflation picking up.

Notes/Observations

• Optimism continues on US-China trade talks
• UK Parliament to vote on withdrawal agreement later today which sets out terms for UK's departure from the Bloc; Motion likely again to face defeat as both Labour and DUP parties have stated they would vote against it. I fifth govt loses this vote it would have until Apr 12th to get a deal though or indicate a way forward
• European inflation data continued to come in soft (France CPI missed)
• Germany Feb Retail Sales beat expectations

Asia:

• Japan Feb Jobless Rate registered its lowest reading since Sept 2018 (2.3% v 2.5%e)
• Japan Mar Tokyo CPI Y/Y: 0.9% v 0.9%e; CPI Ex-Fresh Food Y/Y: 1.1%
• Japan Feb Preliminary Industrial Production M/M: 1.4% v 1.4%e; Y/Y: -1.0% v -1.1%e
• Japan Feb Preliminary Retail Sales M/M: 0.2% v 1.0%e; Retail Trade Y/Y: 0.4% v 1.0%e
• RBNZ Gov Orr stated that was pleased markets had shown they understood what the central bank was focused on in its policy review. Noted that its easing bias was the starting point for the MPC

Europe:

• Parliamentary Speaker Bercow accepted new Brexit deal vote; govt's motion would cover only withdrawal agreement
• Northern Ireland's DUP party confirmed they would vote against withdrawal agreement approval motion just announced
• ECB's Draghi is said to have told EU officials last week that markets aren't fully pricing in risk of 'no deal' Brexit
• Mar GfK Consumer Confidence: -13 v -14e

Americas:

• Treasury Sec Mnuchin stated that had a very productive working dinner last night with Chinese trade delegation and looked forward to Friday's meeting
• Fed's Williams (moderate, voter): US economy is in a very good place; Not worried about the chance of recession
• Fed's Bullard (Dove, voter): premature to contemplate rate cut here. Most likely economy would be stronger in Q2. Believed recent spate of weaker data was temporary

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.3% at 378.0, FTSE +0.5% at 7273, DAX +0.5% at 11482, CAC-40 +0.7% at 5332, IBEX-35 %+0.5 at 9221, FTSE MIB +0.3% at 21134, SMI +0.4% at 9442, S&P 500 Futures +0.1%]
• Market Focal Points/Key Themes: European Indices trade higher across the board tracking higher Indices in Asia overnight and firmer US Index futures this morning. The FTSE trades over 0.5% higher ahead of today's vote on the Withdrawal agreement which sets out terms for UK's departure from the Bloc. On the corporate front Swedish retail giant H&M trades sharply higher after profits came in ahead of forecasts; Altice Europe rises sharply following a Revenue beat and upbeat guidance; CVS Group, Touax, and Tele Columbus are among other risers on earnings. TUI Group declines sharply after cutting their outlook due to the grounding of the 737-Max planes, Bowleven, Idox and Adesso are among other decliners in earnings. In other news Wirecard falls again on a fresh FT article on relationships between third party companies and Wirecard. Astrazeneca declines following a collaboration agreement with Daiichi Sankyo and $3.5B share offering; Galapagos gains following a study update, with Ion Beam another notable rise afte announcing an order in China. Looking ahead notable earners include Carmax and Blackberry.

Equities

• Consumer discretionary: H&M [HMB.SE] +13% (earnings), TUI [TUI1.DE] -11% (profit warning), Carl Zeiss Meditec [AFX.DE] -4.5% (analyst action)
• Energy: Bowleven [BLVN.UK] -7% (earnings)
• Healthcare: Astrazeneca [AZN.UK] -4% (deal with Daiichi Sankyo; to pay up to $6.9B), Galapagos [GPLG.BE] +15% (study update), Ion Beam Applications [IBAB.BE] +15% (contracts), CVS Group [SVSG.UK] +19% (earnings)
• Technology: Wirecard [WDI.DE] -4.5% (fresh FT article)
• Telecom: Altice [ATC.NL] +24% (earning), Tiscali [TIS.IT] +15% (restructuring program)

Speakers

• ECB's Visco (Italy): reiterated General Council forward guidance that interest rates were expected to remain at current level at least until end of 2019. Reiterated confidence that inflation to converge towards target; to be pursued with all available tools
• ECB's Coeure (France): Medium-term inflation expectations have remained close to levels consistent with price stability
• Northern Ireland DUP Brexit Spokesman Wilson: Confirms that DUP Party to oppose Parliament vote on Withdrawal Agreement later today (as expected) as the deal would keep the UK tied to the EU. DUP to work with Govt to ensure UK leaves the EU
• UK Trade Minister Fox: Not voting for Withdrawal Agreement today would create a new cliff-edge. Parliament has chance to set path for smooth exit on May 22nd. Losing the vote would mean a longer extension to the Brexit. Govt would set out a new approach if it lost the upcoming Parliamentary vote
• UK Attorney General Cox opened Parliamentary debate ahead of the Withdrawal Vote in Commons noting that voting against PM May's Brexit agreement would hand the EU a veto on extension
• Treasury Sec Mnuchin: have concluded constructive talks in Beijing; looking forward to continuing the negotiations in Washington DC next week
• US and Japan said to launch trade talks on Apr 15-16th
• Russia said not to propose any extension scenario on OPEC+ production cut agreement in Baku and refuted reports that would only agree to extend the OPEC+ production cuts by three months

Currencies/Fixed Income

• GBP currency was softer ahead of the Parliamentary vote on the Withdrawal Agreement. Markets were expecting PM May risks another loss. The vote will be on the Withdrawal Agreement (WA) but only the WA part and not the Political Declaration on the Future Relationship (as with the two previous votes) and outcome likely seen complicating the ratification process. Thus the optimistic view of Brexit was fading as participants looked towards the potential departure of PM May and the risk of a more pro-Brexit leader replacing her. GBP/USD at 1.3025 just ahead of the NY morning

Economic Data

• (ZA) South Africa Feb M3 Money Supply Y/Y: 5.3% v 5.2%e; Private Sector Credit Y/Y: 6.0% v 6.3%
• (DE) Germany Feb Retail Sales M/M: +0.9% v -1.0%e; Y/Y: 4.7% v 2.1%e
• (DE) Germany Feb Import Price Index M/M: 0.3% v 0.4%e; Y/Y: 1.6% v 1.7%e
• (UK) Mar Nationwide House Price Index M/M: 0.2% v 0.0%e; Y/Y: 0.7% v 0.6%e
• (NO) Norway Feb Retail Sales (included Auto/fuel) M/M: -1.3% v -0.1%e
• (TR) Turkey Feb Current Account Balance: -$2.1B v -$2.2Be
• (DK) Denmark Q4 Final GDP Q/Q: 0.8% v 0.7% prelim; Y/Y: 2.6% v 2.2% prelim
• (DK) Denmark Feb Gross Unemployment Rate: 3.7% v 3.7% prior; Unemployment Rate (Seasonally Adj): 3.1% v 3.1% prior
• (FI) Finland Jan Final Trade Balance: €0.5B v €0.5B prior
• (TH) Thailand Feb Current Account Balance: $6.5B v $3.0Be; Overall Trade Account Balance: $3.3B v $2.3B prior; Trade Balance: $3.5B v $0.1B prior; Exports Y/Y: -1.7% v -4.7% prior; Imports Y/Y: -7.3% v 4.2% prior
• (FR) France Mar Preliminary CPI M/M: 0.8% v 0.9%e; Y/Y: 1.1% v 1.2%e
• (FR) France Mar Preliminary CPI EU Harmonized M/M: 0.9% v 1.0%e; Y/Y: 1.3% v 1.4%e - (FR) France Feb Consumer Spending M/M: -0.4% v +0.2%e; Y/Y: -1.8% v -1.2%e
• (FR) France Feb YTD Budget Balance: -€36.9B v -€17.3B prior
• (ES) Spain Q4 Final GDP Q/Q: 0.6% v 0.7%e; Y/Y: 2.3% v 2.4%e
• (ES) Spain Feb Adjusted Retail Sales Y/Y: 1.2% v 1.0%e; Retail Sales (unadj) Y/Y: 1.7% v 1.7% prior
• (CH) Swiss Mar KOF Leading Indicator: 97.4 v 93.8e
• (AT) Austria Feb PPI M/M: 0.0% v 0.1% prior; Y/Y: 1.6% v 1.6% prior
• (RU) Russia Narrow Money Supply w/e Mar 22nd (RUB): 10.23T v 10.32T prior
• (HU) Hungary Feb PPI M/M: -0.3% v -0.5% prior; Y/Y: 2.7% v 3.8% prior
• (HU) Hungary Jan Average Gross Wages Y/Y: 10.6% v 9.9%e
• (DE) Germany Mar Unemployment Change: -7K v -10Ke; Unemployment Claims Rate: 4.9% (record low) v 4.9%e
• (ES) Spain Jan Current Account Balance: -€1.5B v +€4.2B prior
• (NO) Norway Mar Unemployment Rate: 2.4% v 2.4%e
• (CZ) Czech Feb M2 Money Supply Y/Y: 5.9% v 5.7% prior
• (NO) Norway Central Bank (Norges) Bank Daily FX Purchases (NOK): -600M v -600M prior
• (PL) Poland Mar Preliminary CPI M/M: 0.3% v 0.2%e; Y/Y: 1.7% v 1.6%e
• (IS) Iceland Feb Final Trade Balance (ISK): -15.1B v -15.3B prelim
• (UK) Q4 Final GDP Q/Q: 0.2% v 0.2%e; Y/Y: 1.4% v 1.3%e
• (UK) Q4 Final Total Business Investment Q/Q: -0.9% v -1.4%e; Y/Y: -2.5% v -3.7%e
• (UK) Q4 Current Account Balance: -£23.7B v -£22.5Be
• (UK) Feb Net Consumer Credit: £1.1B v £0.9Be; Net Lending: £3.5B v £3.7Be
• (UK) Feb Mortgage Approvals: 64.3K v 65.0Ke
• (UK) Feb M4 Money Supply M/M: 0.3% v 0.2% prior; Y/Y: 1.2% v 0.5% prior; M4 Ex IOFCs 3M Annualized: 2.3% v 2.4% prior
• (PT) Portugal Mar Preliminary CPI M/M: +1.8% v -0.2% prior; Y/Y: 0.9% v 0.9% prior
• (PT) Portugal Mar Preliminary CPI EU Harmonized M/M: +2.1% v -0.3% prior; Y/Y: 0.8% v 0.9% prior

Fixed Income Issuance

• (ZA) South Africa sold total ZAR650M vs. ZAR650M indicated in I/ L 2025, 2038 and 2050 bonds

Looking Ahead

• (IT) Italy Feb PPI M/M: % v 0.0% prior; Y/Y: % v 4.4% prior
• (IT) Bank of Italy 4Q Credit Conditions and Risk
• (MX) Mexico Feb YTD Budget Balance (MXN): No est v -42.7B prior
• 06:00 (IT) Italy Mar Preliminary CPI (including tobacco) M/M: 0.2%e v 0.1% prior; Y/Y: 1.0%e v 1.0% prior
• 06:00 (IT) Italy Mar Preliminary CPI EU Harmonized M/M: +2.1%e v -0.3% prior; Y/Y: 1.0%e v 1.1% Prior
• 06:00 (GR) Greece Jan Retail Sales Value Y/Y: No est v 0.7% prior; Retail Sales Volume Y/Y: No est v 0.5% prior
• 06:00 (EU) Daily Euribor Fixing - 06:00 FR) France Debt Agency (AFT) announces upcoming issuance
• 07:00 (PT) Portugal Feb Industrial Production M/M: No est v 0.8% prior; Y/Y: No est v -3.0% prior
• 07:00 (PT) Portugal Feb Retail Sales M/M: No est v 1.5% prior; Y/Y: No est v 5.4% prior
• 07:00 (UK) DMO to sell €4.0B in 1-month, 3-month and 6-month bills £1.0B, £1.0B and £2.0B respectively)
• 07:30 (IN) India Weekly Forex Reserves w/e Mar 22nd: $405.6B prior
• 07:45 (US) Daily Libor Fixing - 08:00 (ZA) South Africa Feb Budget Balance (ZAR): +4.0Be v -60.3B prior
• 08:00 (ZA) South Africa Feb Trade Balance (ZAR): +3.3Be v -13.1B prior
• 08:00 (BR) Brazil Feb National Unemployment Rate: 12.4%e v 12.0% prior
• 08:00 (CL) Chile Feb Unemployment Rate: 6.9%e v 6.8% prior
• 08:00 (CL) Chile Feb Industrial Production Y/Y: -2.3%e v -0.9% prior; Manufacturing Production Y/Y: 1.1%e v 2.7% prior; Total Copper Production: No est v 460.1K tons prior
• 08:00 (IN) India to announce burrowing plan for H1
• 08:30 (US) Feb Personal Income: +0.3%e v -0.1% prior
• 08:30 (US) Jan Personal Spending: +0.3%e v -0.5% prior; Real Personal Spending (PCE): +0.3%e v -0.6% prior
• 08:30 (US) Jan PCE Deflator M/M: 0.0%e v 0.1% prior; Y/Y: 1.4%e v 1.7% prior
• 08:30 (US) Jan PCE Core M/M: 0.2%e v 0.2% prior; Y/Y: 1.9%e v 1.9% prior
• 08:30 (CA) Canada Jan GDP M/M: +0.1%e v -0.1% prior; Y/Y: 1.3%e v 1.1% prior
• 08:30 (CA) Canada Feb Industrial Product Price M/M: No est v -0.3% prior; Raw Materials Price Index M/M: No est v 3.8% prior
• 09:00 (RU) Russia Q4 Final Current Account Balance: No est v $38.8B prelim
• 09:00 (UK) Baltic Bulk Index
• 09:00 (IN) India announces upcoming bill issuance (held on Wed)
• 09:00 (ES) Spain Debt Agency (Tesoro) announces upcoming bond issuance for Thursday, Apr 4th
• 09:30 (BR) Brazil Feb Primary Budget Balance (BRL): -14.1Be v +46.9B prior; Nominal Budget Balance: -38.0Be v +26.0B prior; Net Debt to GDP Ratio: 54.1%e v 54.0% prior
• 09:45 (US) Mar Chicago PMI: 61.0e v 64.7 prior
• 10:00 (US) Feb New Home Sales: 620Ke v 607K prior
• 10:00 (US) Mar Final University of Michigan Confidence: 97.8e v 97.8 prelim
• 10:00 (MX) Mexico Jan Gold Production: No est v 6.9K kiligrams prior; Silver Production: No est v 335.5K kiligrams prior; Copper Production: No est v 419.2K tons prior
• 11:00 (MX) Mexico Feb Net Outstanding Loans (MXN): No est v 4.441T prior
• 11:00 (CO) Colombia Feb National Unemployment Rate: No est v 12.8% prior; Urban Unemployment Rate: 12.0%e v 13.7% prior
• 12:00 (EU) Rating Agencies sovereign rating actions
• 12:05 (US) Fed's Quarles on Macroprudential Policy
• 13:00 (US) Weekly Baker Hughes Rig Count data
• 14:00 (CO) Colombia Monetary Policy Mar Minutes
• 17:00 (CL) Chile Central Bank (BCCh) Interest Rate Decision: Expected to leave Overnight Rate Target unchanged at 3.0%

Weekend data

Sat

• 21:00 (CN) China Mar Manufacturing PMI: 49.6e v 49.2 prior; Non-manufacturing PMI: No est v 54.3 prior; Composite PMI: No est v 52.4 prior

Downside risks prevailed in the market on Thursday, thus allowing the Australian Dollar to decline about 41 base points against the US Dollar. The currency pair tested the lower boundary of an ascending channel pattern at 0.7064.

Everything being equal, it is likely that the currency exchange rate will continue its decline in a junior descending channel pattern during the following trading session.

The potential downside target for bearish traders will be near the monthly pivot point at 0.7005.

Moreover, technical indicators flash sell signals on the 4(H) and daily time frames chart.

During the last 24 hours, the US Dollar has appreciated about 55 base points against the Canadian Dollar. The currency pair tested the lower boundary of an ascending channel pattern at 1.3400 during yesterday's trading session.

As for the near future, it is likely that the USD/CAD exchange rate will continue its surge within this session. The potential upside target will be near the monthly pivot point at 1.3465.

However, it is important to note that the Canadian macroeconomic data releases scheduled at 12:30 GMT could play an influential role in the currency exchange rate movement during the following trading session.

The New Zealand Dollar has depreciated about 50 base points against the US Dollar since Thursday's trading session. The decline was stopped by the weekly S2 at 0.6771.

By and large, it is likely that the NZD/USD currency pair will surge towards a resistance level formed by the 50-hour simple moving average at 0.6868 within this trading session.

However, technical indicators demonstrate that the currency exchange rate will continue its southern movement today. If the prediction is correct, a breakout through the lower boundary of an ascending channel pattern could be expected.

UK MP Boris Johnson's tweets today confirmed he will vote for the Withdrawal Agreement even if it's "very painful". Ans in short, "a bad deal that we have a chance to improve in the next stage of negotiations must be better than those alternatives" of "worse version of Brexit or losing Brexit altogether."

Attorney General Geoffrey Cox said in the Brexit debates in the Commons that any Brexit deal will require Withdrawal Agreement to be approved today. And it's the last chance for MPs to secure UK's "legal right" to an Article 50 extension until May 22.

Cox also said the government will agree to legislate to ensure MPs can vote to set the negotiating mandate for the next phase of the Brexit talks. Some MPs indeed see the next phase of trade agreement and future relationship as the most important.

GBPCAD declined below the 23.6% Fibonacci retracement level of the upward movement from 1.6590 to 1.7795, near 1.7510 on Friday. The technical indicators are slowing down, mirroring the market’s behavior over the last days as the RSI is dropping below the 50 level, while the MACD is also holding in the bullish area, however, it slipped below the trigger line.

In case the pair changes its short-term direction to the downside, the bears would probably challenge the 40-day simple moving average (SMA) currently around 1.7450 and then could hit the support at the 1.7350, which stands near the 38.2% Fibonacci mark of 1.7335. A break lower, could last until the 1.7270 barrier.

Alternatively, additional increases may drive the price towards the 20-day SMA currently at 1.7615 and then could challenge the nine-month high of 1.7795. Above the latter, the 1.7980 resistance, registered on April 2018 comes into view.

In the more medium-term picture, the slightly bullish correction shifted to a stronger positive tendency, however, it failed several times over the last sessions to post a higher high.