U.S. Session Forex Recap – Mar. 29, 2016

  • Core PCE Price Index m/m: 0.1% vs. 0.2% expected, 0.3% previous
  • U.S. Personal Spending inline with 0.1% expected/previous
  • U.S. Personal Income: 0.2% vs. 0.1% expected, 0.5% previous
  • U.S. Advance Goods Trade Balance lower at -$62.9B vs. -$62B expected, -$62.2B previous
  • U.S Pending Home Sales m/m: 3.5% vs. 1.5% expected, -3% previous

We finally saw life in the forex markets after a mostly weak set of U.S. data and news hit the first U.S. trading session of the week!

Major Events:

Mixed U.S. Data – It didn’t take much time to get U.S. forex traders back into the groove after the holiday weekend thanks to the Core Personal Consumption Expenditures (PCE) number.  This happens to be the Federal Reserve’s preferred measure of consumer inflation because it adapts to the changes in the consumers’ preferences towards goods and services, and because it is a more comprehensive coverage of goods and services.

This had a pretty significant short-term impact on the Greenback as today’s inflation data goes against recent speculation that a rate hike may be in the cards from the Fed in April (central banks tend to raise rates in rising inflation conditions, not falling).  This low inflation read was significant enough that the U.S. dollar barely bounced after a very positive surprise from U.S. pending home sales data, which fell to its lowest levels in a year in January.

U.S. Q1 2016 GDP lowered – The bearish USD news didn’t stop with the Core PCE data as forecasts for first quarter U.S. GDP was dropped to 0.9% vs. a 1.4% read last week.  This is a bit of a surprise after a positive revision to Q4 U.S. GDP last week, but economists cite a downward revision to January’s personal spending number to 0.1% from 0.5% as a concern going forward.

Major Currency Movers:

USD – It’s no surprise that the Greenback took it to the chin on the session after the weak inflation read, falling across the board after the mostly weaker-than-expected series of U.S. news this morning.

EUR/USD rallied up to 1.1219 after London session lows 1.1153, GBP/USD popped up to  1.4282 after session lows around 1.4112, and USD/JPY traded lower on the news to 113.15 before bouncing back a bit to current levels around 113.38.

JPY – The Japanese yen saw pressure all day on Monday, likely on broad positive risk sentiment that kicked off this week’s trading across that did open after the holiday weekend.

AUD/JPY rallied to session highs around 85.63 after opening at 85.00, GBP/JPY hitting session highs around 161.83 after opening the week at 159.86, and EUR/JPY now breaking the 127.00 handle after the week open at 126.28

Watch Out For:

  • 11:30 pm GMT Japan Unemployment Rate: 3.2% expected/previous
  • 11:30 pm GMT Japan Retail Sales m/m: -1.1% previous
  • 11:30 pm GMT Japan Retail Sales y/y: 0.5% expected, -0.1% previous

See also:

Asian Session Recap

London Session Recap

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