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.
