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Geopolitical risks remained in play during the U.S. session, lifting the safe-haven dollar and Japanese yen.

The oil-related Loonie also drew some support from expectations of output disruptions in the Middle East, as well as positive NAFTA updates.

  • U.S. ISM manufacturing PMI down from 59.3 to 57.3 vs. 58.4 forecast
  • U.S. construction spending slumped 1.7% vs. estimated 0.5% gain
  • Canadian economy expanded 0.4% vs. 0.3% forecast in Feb
  • U.S. final Markit manufacturing PMI unchanged at 56.5
  • BOC Governor Poloz: Central bank confident that less stimulus will be needed over time
  • New Zealand GDT auction yielded 1.1% dip in dairy prices
  • New Zealand Q1 jobs report coming up

Major Events/Reports:

Returning risk-off flows

Trade war fears with China resurfaced after U.S. Commerce Secretary Wilbur Ross said the Trump administration was prepared to impose higher tariffs on China if an agreement on addressing trade imbalances isn’t reached soon.

This added to ongoing concerns that the U.S. could scrap the nuclear deal with Iran, upping the ante on geopolitical risks.

U.S. equity indices managed to squeeze out some gains, though:

  • Dow 30 index is down 64.10 points to 24,099.55 (-0.27%)
  • S&P 500 index is up 6.75 points to 2,654.80 (+0.25%)
  • Nasdaq is up 64.44 points to 7,130.70 (+0.91%)

Some optimism from BOC Governor Poloz

BOC head honcho Poloz stepped up to the podium to share some of his thoughts on the Canadian economy and monetary policy.

Among the key points he mentioned was that the central bank was becoming more confident that less stimulus will be needed over time. He said:

“Ultimately, the Bank’s job is to look at the economy as a whole and judge the outlook for inflation. Today, the view is quite good, even with the shadow cast by household debt.”

Poloz also mentioned that the BOC will continue to be cautious in making future monetary policy decisions. He acknowledged that the freshly released GDP data was encouraging but that the vulnerability to household debt is increasing.

Major Currency Movers:

USD

The Greenback was the king of pips, supported by mostly upbeat data, resurfacing geopolitical tensions, and pre-FOMC positioning.

AUD/USD is down 32 pips to .7480, NZD/USD retreated 39 pips to the .7000 handle, USD/JPY is up 22 pips to 109.82, and USD/CHF is up to .9966.

Watch Out For:

  • 11:45 pm GMT: New Zealand quarterly employment change (0.5% expected)
  • 11:45 pm GMT: New Zealand quarterly jobless rate (drop from 4.5% to 4.4% expected)
  • 11:45 pm GMT: New Zealand labor cost index q/q (gain from 0.4% to 0.5% expected)