U.S. Session Forex Recap: Another Round of Mixed U.S. Reports
Dollar price action was mixed as reports from Uncle Sam barely provided directional clues. In the United Kingdom, more polls indicated a narrowing lead for PM May’s party.
- Canadian economy grew 0.5% in March vs. 0.3% forecast
- Chicago PMI up from 58.3 to 59.4 vs. 57.0 consensus
- U.S. pending home sales down 1.3% instead of projected 0.7% gain
- SNB head Jordan: Overvalued franc puts pressure on Swiss economy
- Fed Beige Book: Moderate growth in most districts
Stronger than expected Canadian March GDP
Underscoring the BOC’s relatively confident stance is the latest GDP reading from Canada, which printed a larger than expected 0.5% expansion versus the 0.3% estimate. This was also an improvement over the previous month’s flat reading.
Components of the report revealed that the manufacturing sector made the biggest contribution to GDP growth for the period, rebounding by 1.6% in March and erasing the 1.0% decline seen in February. Goods-producing industries chalked up their fourth gain in five months while retail trade advanced by 1.0% in March.
Mixed U.S. economic data
Just as in the previous New York session, Uncle Sam’s reports came in a mix of green and red, but still enough to keep June rate hike expectations steady.
The Chicago PMI jumped from 58.3 to its highest level since November 2014 at 59.4 to reflect a much stronger pace of industry growth versus the consensus at 57.0. Underlying data indicated that this was spurred by another pickup in business optimism even as demand took a hit in May.
Meanwhile, the Fed Beige Book confirmed that most districts saw moderate growth while some reported tighter labor conditions. As a result, wage increases were modest to moderate, leading to modest price pressures for most firms as well.
Major Market Mover(s):
The dollar struggled to find a clear direction in the past few hours as most major currencies were moving to the beat of their own drums.
EUR/USD and USD/CHF were mostly in consolidation, USD/JPY is down from 110.96 to a low of 110.48, GBP/USD found resistance at 1.2900 then retreated to 1.2877, and AUD/USD is down to .7425.
Watch Out For:
- 11:45 pm GMT: New Zealand overseas trade index q/q (4.0% expected, 5.7% previous)
- 12:30 am GMT: Australia AIG manufacturing index (59.2 previous)
- 12:50 am GMT: Japanese capital spending q/y (3.9% expected, 3.8% previous)
- 1:30 am GMT: Japanese final manufacturing PMI (no changes to 52.0 expected)
- 2:30 am GMT: Australian private capital expenditure q/q (0.6% expected, -2.1% previous)
- 2:30 am GMT: Australian retail sales (0.3% expected, -0.1% previous)
- 2:45 am GMT: Chinese Caixin manufacturing PMI (50.2 expected, 50.3 previous)