Article Highlights

  • U.S. building permits down from 1.29M to 1.21M vs. 1.26M forecast
  • U.S. housing starts up from 1.25M to 1.29M vs. 1.26M estimate
  • Philly Fed manufacturing index fell from 43.3 to 32.8 vs. 30.2 consensus
  • U.S. initial jobless claims at 241K vs. 245K forecast
  • U.S. JOLTS job openings at 5.63M in Feb vs. 5.45M estimate, 5.54M previous
  • ECB official Nowotny hinted at potential rate hike
  • ECB official Praet: Economic outlook better than it has been in many years
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Mixed economic reports prevented the Greenback from establishing a clear direction, leaving the euro to steal the spotlight when a couple of ECB officials started talking.

Major Events:

Mixed U.S. data – You win some, you lose some! Economic reports from Uncle Sam printed a mix of green and red but were generally supportive of stronger economic performance down the line.

Initial jobless claims slid from 243K the other week to 241K last week instead of rising to 245K. The JOLTS job openings for February came in at 5.63 million, way higher than the estimate at 5.45 million and the earlier 5.54 million reading. This indicates that there are much more opportunities for job seekers, likely allowing the economy to maintain its pace of hiring growth in the coming months.

Meanwhile, the Philly Fed manufacturing index fell from 43.3 to 32.8 to indicate a slower pace of industry growth, but this was still better than the projected 30.2 figure. Building permits dropped from 1.29 million to 1.21 million, sharper than the estimated fall to 1.26 million, but this was made up for by the pickup in housing starts from 1.25 million to 1.29 million.

More upbeat remarks from ECB officials – Echoing ECB Governor Draghi’s less dovish tone during their monetary policy statement presser last week, a couple of central bank officials confirmed that they are seeing economic improvements and even hinted that a rate hike could be in the cards.

For ECB official Praet, the outlook is much better now than it has been in many years. He admitted that underlying inflation pressures still remain subdued and that economic risks are tilted to the downside, which means that the central bank is not quite ready to normalize policy just yet. However, ECB official Nowotny was more optimistic in saying that the bank might opt to increase the deposit rate before the main refinancing rate, possibly even before trimming asset purchases.

Major Market Movers:

EUR –  The shared currency resumed trading on the shifting ECB monetary policy bias, popping higher when a couple of officials acknowledged recent improvements and brought up the idea of tightening.

EUR/USD rallied from a low of 1.0707 to a high of 1.0774, EUR/JPY is up from a low of 121.28 to a high of 122.08, EUR/GBP recovered from a low of .8672 to a high of .8722, and EUR/CAD rose from 1.4257 to the 1.4350 area.

Watch Out For:

  • All day: G20 Meetings

See also:

London Session Recap

Asian Session Recap

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