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U.S. President Trump seems to be having a temper tantrum, as he threw shade on several trade partners and warned about a major conflict with North Korea, taking the spotlight away from the Japanese data dump.

  • Japanese household spending down by 1.3% vs. projected 0.6% dip
  • Japanese national core CPI up by 0.2% as expected in March
  • Tokyo core CPI down by 0.1% vs. projected 0.2% drop in March
  • Japanese preliminary industrial production fell by 2.1% vs. projected 0.6% drop
  • Japanese retail sales up 2.1% in March vs. 1.6% forecast
  • Japan’s unemployment rate steady at 2.8% vs. expected rise to 2.9%
  • New Zealand ANZ business confidence index down from 11.3 to 11.0
  • Australian quarterly PPI up by 0.5% vs. projected 0.3% uptick
  • Australian private sector credit up by 0.3% vs. 0.5% consensus
  • Trump: Plans to renegotiate “horrible” trade deal with South Korea, warned of “major, major” conflict with North Korea
  • Trump: Saudi Arabia has “not treated us fairly” in paying share for U.S. defense

Major Events:

Japanese data dump

Economic reports from Japan turned out mixed, with inflation readings coming in relatively upbeat and spending reports showing some weakness.

The Tokyo core CPI posted a smaller than expected 0.1% drop compared to the estimated 0.2% decline while the national core CPI printed a 0.2% uptick as expected. This marked the third consecutive monthly increase in inflation, signaling that the Japanese central bank might not need to ramp up its easing efforts anytime soon.

Household spending slipped by 1.3% year-over-year, worse than the projected 0.6% fall, while retail sales ticked up by 2.1% from the same month last year, higher than the estimated 1.6% gain. The unemployment rate held steady at 2.8% instead of rising to 2.9% in March while preliminary industrial production slumped by 2.1%.

Trump whines about trade deals

In an interview with Reuters, U.S. President Trump felt the need to get several grievances off his chest as he ranted about how other nations have been treating them unfairly.

First off, he cited Saudi Arabia for not paying their rightful share in terms of defense. He said that the U.S. is “losing a tremendous amount of money” in helping Saudi Arabia defend the kingdom, adding that the administration is planning on scheduling visits to the country in the second half of May.

Next up, he warned that a “major, major” conflict with North Korea could arise if the Asian nation doesn’t halt its nuclear and missile program tests. He said that economic sanctions and military action could be on the table but that he still prefers a diplomatic resolution.

After that, Trump mentioned that he wants to either renegotiate or terminate their “horrible” trade deal with South Korea and that he wants the country to pay $1 billion for the U.S. THAAD anti-missile defense system. And on the subject of trade deals, the Donald also claimed that he was ready to terminate NAFTA before receiving calls from the leaders of Canada and Mexico.

“We will do trade deals that are going to make up for a tremendous amount of the deficit. We are going to be doing trade deals that are going to be much better trade deals,” Trump said.

Market Movers:

CAD

The Loonie edged lower against most of its counterparts as a bit of risk aversion kicked in and comdolls were on the losing end.

USD/CAD inched up from 1.3627 to 1.3652, CAD/JPY turned down from a high of 81.71 to a low of 81.41, EUR/CAD is up to 1.4842, and GBP/CAD advanced to 1.7615.

Watch Out For:

  • 6:30 am GMT: French flash GDP (0.4% expected, 0.4% previous)
  • 7:00 am GMT: German retail sales (0.1% expected, 1.8% previous)
  • 7:45 am GMT: French consumer spending (0.6% expected, -0.8% previous)
  • 8:00 am GMT: Swiss KOF economic barometer (107.7 expected, 107.6 previous)
  • 9:00 am GMT: SNB head Thomas Jordan’s testimony
  • 9:30 am GMT: U.K. preliminary GDP (Check out Forex Gump’s trading guide!)
  • 10:00 am GMT: Euro zone flash CPI (1.8% expected, 1.5% previous)
  • 10:00 am GMT: Euro zone flash core CPI (1.0% expected, 0.7% previous)