The last trading day of March and Q1 finds stocks generally trending higher within current ranges while currencies have been mixed.
The big news to start the week has been the remainder of Japan’s key monthly indicators which came in below expectations. Last week suggestions that Japan may need to bring in more stimulus this spring on top of a front-ended budget (40% of annual spending in April to June) started to circulate. Today’s soft numbers have added fuel to stimulus speculation sparking a rally in the Nikkei while sending JPY to the bottom of the performance table for majors.
AUD and NZD have also been relatively soft today against other majors except JPY. Data from New Zealand was a bit soft but the bigger issue affecting both appears to be ongoing concerns about the health of China’s economy, their main export market. We could see positioning today ahead of Australian PMI and an RBA decision this evening.
The loonie is taking off today on the back of better than expected Canada GDP numbers which show that the Canadian economy bounced back from December’s ice storm and that after the first initial storms of winter, the cold didn’t really slow anybody down. USDCAD is testing $1.1000 today as traders realize things aren’t as bad as previously thought in Canada and that the country can also benefit from the US economy accelerating out of winter.
Other major markets have picked up where they left off last week with US indices
trading slightly higher and gold slightly lower. In addition to the US announcements and Yellen speech later this morning, markets could be active as traders position ahead of the two rounds of global PMI reports, five central bank meetings and North American employment data due through the rest of this week.
Economic reports released overnight and this morning include:
Canada Jan GDP over month 0.5% vs street 0.4%
Canada Jan GDP over year 2.5% vs previous 2.3%
Eurozone consumer prices 0.5% vs street 0.6%
Italy consumer prices 0.3% vs street 0.4%
UK mortgage approvals 70K vs street 75K
Germany retail sales 2.0% vs street 0.8%
France GDP 0.8% as expected
Japan manufacturing PMI 53.9 vs street 55.5
Japan industrial production 6.9% vs street 9.9%
Japan housing starts 1.0% vs street 4.8%
Japan construction orders 12.3% vs previous 15.2%
Australia consumer prices 1.7% as expected
NZ business confidence 67.3 vs previous 70.8
NZ building permits (1.7%) vs street 2.0%
Economic reports due later today include:
9:45 am EDT US Chicago PMI street 59.5
9:55 am EDT Fed Chair Yellen speaking
10:30 am EDT US Dallas Fed street 2.5 vs previous 0.3