Article Highlights

  • U.S. March CB consumer confidence index up to 125.6 vs. 113.9 forecast
  • U.S. Feb CB consumer confidence index upgraded from 114.8 to 116.1
  • Richmond manufacturing index improved from 17 to 22 vs. 16 forecast
  • U.S. goods trade deficit narrowed from $68.8B to $64.8B
  • U.S. preliminary wholesale inventories up 0.4% vs. 0.2% consensus
  • BOC Gov Poloz: Downside risks stated in earlier rate statement are still present
  • Poloz warned about potential changes in trade agreements like NAFTA
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The Greenback made a pretty solid comeback on the heels of mostly stronger than expected economic reports, brushing off the setbacks in Washington over the past few days.

Major Events:

Mostly strong U.S. data – Uncle Sam reminded everyone of its consistently strong fundamentals by printing upbeat medium-tier reports. For one, the CB consumer confidence surged from an upgraded 116.1 reading in February to 125.6 in March to reflect a huge pickup in optimism instead of dropping to the projected 113.9 reading.

Components of the CB consumer confidence report indicated that the gains were from consumers’ assessment of current business and labor market conditions. Optimism in terms of their short-term outlook for jobs, business, and personal income prospects also rose. These were enough to boost the index up to its highest level since December 2000.

Meanwhile, the Richmond manufacturing index also printed an impressive improvement from 17 to 22 instead of dipping to the consensus at 16. Underlying data revealed that businesses reported gains in shipments and new orders. Firms also saw a pickup in the employment component as they reported longer workweeks and more widespread wage increases.

Also, the February goods trade deficit or the difference in value between imported and exported goods for the month narrowed from $68.8 billion to $64.8 billion, better than the projected $66.6 billion shortfall. This suggests that the trade component could contribute positively to the economy’s GDP for the period. Preliminary wholesale inventories ticked up 0.4% versus the estimated 0.2% gain.

BOC Governor Poloz’s testimony – The Bank of Canada’s head honcho didn’t sound so optimistic about their economy’s prospects, citing that the downside risks they talked about during the previous monetary policy statement are still present.

Although he did say that concerns about the energy sector are fading, Poloz admitted that high levels of indebtedness are troubling and that potential changes to trade agreements like the NAFTA could bring more uncertainty. He declined to talk about the direction of interest rates as he simply turned the attention to government stimulus, saying that he’s confident that this can provide an added boost to economic data this year.

Major Market Movers:

GBP –  Pound traders are still feeling the jitters ahead of Article 50 D-Day, leaving the U.K. currency to keep sliding against its peers. To make matters more complicated, the Scots are also getting in the spotlight as their parliament voted on backing another independence referendum.

GBP/USD dropped from 1.2565 to a low of 1.2378, GBP/JPY tumbled from 138.85 to a low of 137.61, EUR/GBP popped up from .8642 to a high of .8725, and GBP/AUD is down from 1.6555 to 1.6183.

See also:

London Session Recap

Asian Session Recap

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