Forex news for North American trading on April 1, 2019:
- March US ISM manufacturing 55.3 vs 54.5 expected
- US February advanced retail sales -0.2% vs +0.3% expected
- Markit final US March manufacturing PMI 52.4 vs 52.5 prelim
- Markit Canada manufacturing PMI 50.5 vs 52.6 prior
- Labour said to whip for Common Market 2.0
- BOC's Poloz: Period of below-potential growth will be transitory
- Atlanta Fed GDPNow estimate for Q1 growth rises to 2.1% from 1.7% last
- Bercow selections four motions for indicative vote, including customs 2.0
- US January business inventories +0.8% vs +0.5% expected
- US construction spending for February 1.0% vs -0.2% est.
Markets:
- S&P 500 up 33 points to 2867
- WTI crude oil up $1.50 to $61.94
- US 10-year yields up 9 bps to 2.497%
- Gold down $5 to $1287
- GBP leads, JPY lags
It was the first trading day of the month so you had to attribute to fundamentals what's probably (or at least partly) due to flows. In any case, a wave of USD buying came after the ISM manufacturing report even as people poked holes in it and pointed out that the Markit data was pointing in a different direction. Everyone seemed to ignore the retail sales numbers as well, concluding that a positive revision was enough to at least balance the big miss on the headlines.
USD/JPY hit a session low of 110.80 after retail sales but steadily rose into the US afternoon to hit 111.44 with a big help from a jump in Treasury yields.
Cable is warming up to the idea of Customs Union 2.0. Labour is going to support the motion and the DUP will abstain so it has a very good chance of winning. More important is how Theresa May reacts to it. From there we will be watching for a plan of attack from her and signs of MPs resigning. What was partly lost was a great UK manufacturing PMI.
It wasn't so rosy for the euro as it fell for the fifth day and hit 1.1204 after touching 1.1250 earlier despite a miserable German PMI. Talk of an ECB rate cut continues to gain momentum .
The Canadian dollar started off the new quarter strong as oil rallied on OPEC production numbers and exports at multi-year lows. The market had been doubting Saudi Arabia but now sees that Bin-Salman isn't messing around when it comes to +$70 oil.
It's a huge day coming up for the Australian dollar with the RBA and budget to come. It drifted lower in New York trade to 0.7114 but finished modestly higher on the day. I expect there are some buyers on the sidelines who are simply waiting for the risk events to pass.
