Forex news for US trading on March 28, 2016:
- US Feb PCE core +1.7% vs +1.8% y/y expected
- us Personal spending +0.2% vs +0.1% exp (prior revised lower)
- Personal income +0.2% vs +0.1% exp
- The US advanced goods trade balance for February -62.864B vs. 62.2B est.
- Atlanta Fed GDP forecast for 1Q down to 0.6%
- Dallas Fed Manufacturing index -13.6. vs. -26 est
- US Pending home sales for February 3.5% vs 1.1% est
- Gunshots reported in US Capitol visitors center
- US sells 2-year notes at 0.877% vs 0.880% WI
- Fed's Williams concerned about China/Brazil
Markets:
- Gold up $3.66 to $1220.14
- WTI crude down 9-cents to $39.37
- US 10-year yields down 1.5 bps to 1.88%
- S&P 500 flat at 2035
- GBP leads, JPY lags
FX was the hottest market in what was a surprisingly busy session. Market closures in many regions might have kept a cap on trading but a soft inflation print in the PCE report kicked off heavy US dollar selling that was probably exaggerated by thin market conditions.
Cable was the big beneficiary as it reclaimed nearly 50% of its recent decline in a rip as high as 1.4283 from 1.4160 at the start of US trading. The initial move after the PCE report was light but it extended and extended. A dip down to 1.4225 came after the European 'close' but it's back to 1.4251.
The euro hit buy stops above 1.1170/80 after the PCE report and continued up to 1.1220 in steady buying over the course of two hours. It retraced back to 1.1185 but has consolidated around 1.12 since as it breaks a six-day losing streak.
One streak that wasn't broken was USD/JPY as it finished higher for the seventh day. However all the gains came in Asia and it slumped down to 113.15 from 113.50 on the PCE data before recovering virtually all those losses later.
Canada was closed for holiday but there were plenty of USD/CAD sellers. The pair rose to 1.3280 early but sagged in Europe to 1.3250 and then slumped all the way to 1.3165 later. The rumour is that the Genscape oil supply data showed a small draw so that may boost oil in the day ahead. If not, an 85 pips move on a Canadian holiday without oil or risk appetite is a tough one to believe in.
AUD/USD started US trading at 1.7530 and then ran up to 0.7560 after the PCE numbers but later sagged back to 0.7540. It finishes the day up 35 pips.
