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Just when it seemed as though the weekend gaps were about to get filled, yen pairs resumed their climb to show that risk-on traders are in control. Meanwhile, the Loonie was dragged down as Trump turned his tirade on the Canadian dairy industry.

  • U.S. HPI up 0.8% vs. projected 0.1% uptick in Feb
  • U.S. CB consumer confidence index slipped from 124.9 to 120.3 this month
  • Richmond manufacturing index down from 22 to 20 vs. forecast at 18
  • U.S. new home sales climbed from 587K to 621K in March
  • Trump: Canada made business for dairy farmers in Wisconsin difficult
  • Reuters: ECB might remove references to downside risks in upcoming statement
  • New Zealand visitor arrivals rebounded by 1.5% in March

Major Events:

Mixed U.S. data – Medium-tier reports from Uncle Sam printed mixed results but the overall mood in the markets remained positive.

House prices rose 0.8% in February, much higher than the projected 0.1% uptick, while the earlier report was upgraded from a flat reading to a 0.2% gain. The S&P/CS Composite-20 HPI also came in stronger than expected with a 5.9% year-over-year gain versus the projected 5.7% figure. New home sales advanced to 621K in March from a downgraded 587K reading.

On a less upbeat note, the CB consumer confidence index for the month slipped to 120.3 versus the projected reading at 123.7. The March reading was downgraded from 125.6 to 124.9 to reflect weaker optimism than initially reported. Meanwhile, the Richmond manufacturing index also turned lower from 22 to 20 to reflect slower expansion in March but was better than the estimated drop to 18.

  • Nasdaq climbed 0.70% to 6,025.49
  • S&P 500 rose 0.61% to 2,388.61
  • Dow 30 is up 1.12% to 20,996.12

Trump tweets about Canadian dairy – The Donald took to his favorite way of disseminating information once more as he ranted on Twitter about how Canada is making business difficult for Wisconsin’s dairy farmers.

In keeping with his protectionist “America First” plans and following his announcement on Canadian lumber, the U.S. President said that he wanted local farmers to “start selling milk in our country” instead of allowing Canadian dairy imports a larger market share.

However, the truth is that Canada exports only a very small amount of dairy to the U.S. at roughly $112.6 million in 2016 compared to U.S. dairy exports to Canada at $631.6 million. In response, Canadian Prime Minister Trudeau said that they will stand up for their dairy farmers and that he will deal firmly and reasonably with these trade issues.

Major Market Movers:

JPY – The Japanese gave back most of its recent gains as risk-taking resumed and yen pairs were still unable to fill their weekend gaps.

USD/JPY popped up from 110.38 to a high of 111.19, EUR/JPY is up from the 120.00 area to a high of 121.65, GBP/JPY advanced from 141.36 to a high of 142.66, and AUD/JPY is up to 83.70.

Watch Out For:

  • 2:30 am GMT: Australia CPI q/q (0.6% expected, 0.5% previous)
  • 2:30 am GMT: Australia trimmed mean CPI (0.5% expected, 0.4% previous)
  • 4:00 am GMT: New Zealand credit card spending y/y
  • 5:30 am GMT: Japanese all industries activity index (0.8% expected, 0.1% previous)

See also:

London Session Recap
Asian Session Recap

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