Australian Bureau of Statistics reported on Thursday a surprisingly strong Employment Change number, rising 71,500 versus 9,500 median expectations. Unemployment rate declined to 5.4 percent as full-time and part-time employment gained.
After the ECB, BOE, BOJ, BOC, and RBA all made their respective interest rate announcements last week, it was RBNZ’s turn this week. Reserve Bank of New Zealand has maintained its Official Cash Rate (OCR) at 2.50 percent. According to the Monetary Policy Statement from RBNZ, the global market sentiment has somehow improved as worldwide growth risks recede. On the domestic front, policymakers saw an uneven economic recovery as labor market remains relatively weak. The next release is expected on April 24.
In other news, US Retail Sales rose 1.1 percent in February, the best reading in the last five months, on the back of improving labor market conditions and household finances. Meanwhile, the March preliminary reading for University of Michigan Consumer Sentiment weakened to its lowest since late 2011 as consumers expressed dismay over the government’s fiscal policy decisions. The sentiment index fell to 71.8 compared to median expectation of 78.2.
Commodities
Gold has traded a mere $25 range in the March 10 week and was unable to breach–and even touch–$1,560. This led to a rebound in price this week where bulls were also unable to touch the $1,600 level. Keen buyers still need to face the topside resistance at $1,620 and $1,650 before they can even relax a bit.
Oil also rebounded this week after touching a $89.33 low in the prior week. From $90.88, oil rose to $93.81 and looks ready to take on a move towards $98.22, the 2012 high set on January 27. The journey would not be smooth as bulls have to contend with potential sellers around the $95 area.
Currencies
EURUSD has pretty much consolidated this week but this changed as the weekend neared, as price made range downside and topside breaches on Thursday and Friday, respectively, reaching as low as 1.2910 and as high as 1.3106. Having said that, the pair remains in consolidation and buyers must attempt a break of 1.3150 ahead of key resistance at the 1.3300 level.
USDJPY bulls have attempted to make another milestone by reaching the 97.00 level but they failed all five days of this week. Because of this, sellers stepped in to drive price lower on Friday, nearly touching the 95 level and closing the week just about 30 pips higher than this important level. It would be interesting to see if sellers would continue their campaign next week.
GBPUSD made an impressive recovery this week, rising 345 pips from 1.4830 lows to Friday’s 1.5175 weekly high to end the week just above 1.5100. In so doing, bulls have now increased their chance to revisit and break the infamous 1.5300 level. If they will make good of this golden opportunity, they would be able to unlock a potential trip to 1.5700 ahead of the 16-month high at 1.6338.
The Week Ahead
Mid-week will be evenly busy, while Monday and Friday will be moderate as they typically are.
Monday will start off with New Zealand’s Westpac Consumer Sentiment, followed by Australia’s New Motor Vehicle Sales, Switzerland’s SECO Economic Forecasts, Italy’s Trade Balance, Euro-area Trade Balance, Canada’s Foreign Securities Purchases, and finally US NAHB Housing Market index.
On Tuesday, Australia’s central bank will release its Policy Meeting Minutes coupled with speeches from RBA Assistant Governor Debelle and RBA Deputy Governor Lowe. China will be out with its Foreign Direct Investment report; followed by Italy’s Industrial Production; UK CPI, RPI, HPI, and PPI, as well as BOE Inflation Letter; Euro-area and Germany’s ZE Economic Sentiment; Canada’s Wholesale and Manufacturing Sales; and US Building Permits.
Wednesday sees the release of New Zealand Current Account, Euro-area Current Account, Germany’s PPI, UK MPC Meeting Minutes, UK Annual Budget Release, UK Unemployment Rate, UK Claimant Count Change, Euro-area Consumer Confidence, Germany’s 10-year Bond Auction, Switzerland ZEW Economic Expectations, US FOMC Statement and Rate Announcement and Press Conference.
For Thursday, there are New Zealand’s Gross Domestic Product report; Australia’s RBA Bulletin; Japan and Switzerland Trade Balance; China, Germany, US, and France Flash Manufacturing PMI; UK Retail Sales; Canada Retail Sales; US Philadelphia fed Manufacturing Index and Existing Home Sales.
On Friday, economic news release activity tapers off with only a few releases on tap such as Australia’s CB Leading Index and speech from RBA Assistant Governor Edey, and Business Climate reports from Belgium and Germany.
