Another slow week for the major currencies as major catalysts were few and far between. The U.S. Dollar was once again a big loser, while the rest of the safe havens took the top spots as risk sentiment soured before the end of the week.
Notable News & Economic Updates:
Another Slow Week in the Markets
Volatility was a bit lacking this week in the global markets as traders found little to get excited over from the forex calendar and the usual news cycle.
It was also a very mixed bag as the usual correlations didn’t really show up as all of the major asset classes spent a lot of the week in the red as seen in the chart above.
It looks like every market had a reason to stay mostly down in the dumps, with exception for gold (which mostly benefited from a weaker U.S. Dollar, and maybe even bitcoin weakness).
Bitcoin and the rest of the crypto markets were hit over the weekend with U.S. Treasury regulation rumors, and didn’t seem to recover all week. The equity markets were also taking a step back most of the week despite strong company earnings and improving economic data. Oil was also heading lower after a strong Monday start, likely on the latest data showing a rise in crude oil inventory.
And the U.S. dollar as well as U.S. yields dipped on Tuesday, possibly on uncertainty with the U.S. infrastructure bill (Republicans unveil $568 bln infrastructure package to counter Biden) and/or rumors that Biden will propose an increase to the capital gains tax for wealthy individuals, a headline that seems to have taken down the broad markets on Thursday.
- Fed will limit any overshoot of inflation target, Powell says
- Weekly U.S. mortgage demand jumps 8.6% after interest rates fall to a two-month low
- U.S. weekly jobless claims fall to new one-year low
- U.S. existing home sales drop to seven-month low
- Biden to float historic tax increase on investment gains for the rich
- U.S. Private sector output growth reaches fresh series high, but supply chain disruption continues to hamper goods production
- New home sales surged 20.7% in March to 1.02 million
- Republicans unveil $568 bln infrastructure package to counter Biden
- UK house prices surge as high demand meets record shortage of homes for sale
- British consumers started the big splurge
- U.K. labor market weakens with unexpected drop in payrolls
- UK inflation rises to 0.7% in March as clothing and fuel prices grow
- UK consumer sentiment touches 13-month high: GfK
- UK retail sales surge before lockdown easing, borrowing leaps too
- Looser pandemic restrictions result in fastest UK private sector growth since late-2013
- Current account recorded €26 billion surplus in February 2021, down from €35 billion in previous month
- German Producer prices in March 2021: +3.7% on March 2020
- European Central Bank holds fire ahead of crunch June meeting
- Eurozone expansion gathers pace as manufacturing enjoys record boom
- Flash German PMI shows a slight loss of momentum in recovery in April
- First expansion of French business activity since last August
- Trudeau will add to record debt with first pandemic budget
- Bank of Canada sees economic slack absorbed in H2 2022, sooner than expected
- Bank of Canada becomes first to signal exit from stimulus – this was the big FX mover of the week as most weren’t expecting talk of reducing bond purchasing so soon. The bullish CAD reaction was swift but short-lived as traders likely went back to the sidelines to anticipate the upcoming monetary policy statement from the European Central Bank.
- BusinessNZ: New Zealand service sector moves to expansion
- Global dairy prices fall -0.1%
- NZ Q1 inflation ticks higher, RBNZ seen standing pat
- RBA meeting minutes revealed policymakers worried about high joblessness
- Australian retailers boast strong March sales as consumer confidence soars
- Australian NAB quarterly business confidence index improved from 15 to 17
- Potential trade conflict between Australia and China on Belt Road Initiative
- Australia’s manufacturing hits highest mark on record; services PMI rises to its fastest pace in April