Focus on Japan then Yellen as traders return to work

It’s been a quiet start to the trading week with Europe closed and a partial holiday in North America where markets were open but banks and government offices were closed. Still, US indices managed to shrug off some early softness to post a moderate gain in the day. Strong box office receipts for Batman vs Superman despite a poor reception from movie critics propelled Time Warner shares to a 3.4% gain.

Crude oil had sizeable swings in both directions but finished the day close to where it started. Oil sensitive currencies like CAD and NOK gained ground on USD suggesting that traders still think oil has turned the corner even if we get a correction in the short term.

The trading week now appears set to kick off in earnest with the rest of Asia Pacific traders returning work. Japan was the only major market open yesterday and managed to post a moderate gain which it has held on to overnight on speculation PM Abe may be preparing to bring in a new round of fiscal stimulus before the G-20 meeting in May. Japanese markets may be active again today with employment and retail sales reports on the way.

In the US this week, focus remains on whether or not the Fed could raise interest rates in April or June. The FOMC statement and projections had sent a dovish signal but last week several Fed speakers backtracked. The street may look to comments from Fed Chair Yellen to set the record straight. At her press conference she indicated April as a live meeting for a potential rate hike although nobody believed her at the time.

USD fell slightly today as flat core PCE inflation took a bit of the pressure off the Fed to act soon. AUD and NZD have been advancing alongside moderate gains for gold and copper.


Corporate News

There have been no major corporate announcements after the US close today


Economic News

Significant announcements released overnight include:

US personal income            0.2% vs street 0.1%
US personal spending            0.1% as expected
US Feb core PCE inflation        1.7% unchanged vs street 1.8%

US advance goods trade balance    ($62.8B) vs street ($62.2B)

US pending home sales            5.1% vs street (0.5%)
US Dallas Fed                (13.6) vs street (26.0) and previous (31.8)

Canada Bloomberg Nanos confidence    54.5 vs previous 53.8

Upcoming significant economic announcements include:

(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)  

10:30 am AEDT        Japan unemployment rate    street 3.2%
10:50 am AEDT        Japan retail sales        street 1.6%

8:30 am BST        Sweden trade balance        SEK 2.5B
8:30 am BST        Sweden retail sales         street 4.2%

8:30 am EDT        Canada industrial prices        street (0.2%)
8:30 am EDT        Canada raw material prices    street (0.9%)

10:00 am EDT        US consumer confidence    street 94.0

12:20 pm EDT        FOMC Yellen speaking
1:00 pm EDT        FOMC Kaplan speaking