The major currencies were a mixed bag this week, and it looks like it was a risk-on vibe with the Canadian dollar rising to the top while the yen and euro were net red.
There were no major catalysts to drive the positive leaning bias across the major asset classes, but we did get positive updates in business sentiment and confirmation once again that central banks will maintain simulative measures.
Notable News & Economic Updates:
- World factories boom as pandemic recovery accelerates
- JPMorgan to let clients invest in bitcoin fund for first time
- OPEC+ keeps oil demand forecast, but worried by COVID surge
- FOMC Statement: Fed holds interest rates near zero, sees faster growth and higher inflation
- Copper hits 10-year high on supply concerns, demand hopes
- European Investment Bank Issues $121M Digital Notes Using Ethereum
- How China helped push corn futures to a nearly 8-year high
- Oil climbs to fresh 6-week high on bullish demand
- Preliminary flash estimate for the first quarter of 2021 GDP down by 0.6% in the euro area and by 0.4% in the EU
- CME eyes ‘much wider potential customer base’ with next week’s micro bitcoin futures launch
- Chinese official manufacturing PMI down from 51.9 to 51.1 vs. 51.8 forecast; China’s Caixin manufacturing PMI up from 50.6 to 51.9
Risk-on Sentiment this week
As we can see in the hourly chart, traders leaned long in most asset classes this week, with the except of gold coming in just under break even at the Friday close.
There were no major catalysts in terms of surprise news headlines or economic updates to get traders into a bullish mood, but it’s more likely a combination of improving business sentiment data and economic updates as the world continues to recover from covid that had traders leaning risk-on.
We also saw the Federal Reserve and the Bank of Japan signal that easy money policies were here to stay, which likely helped boost the risk-on vibes as well while momentarily taking the Greenback and bond yields lower on Wednesday.
And across the major currencies, it looks like risk sentiment plus counter currency flows were the main drivers for the week. The Loonie took the top spot, likely continuing to benefit from last week’s bullish statement from the Bank of Canada.
The Japanese yen was the big loser, likely a reaction to this week’s dovish Bank of Japan statement on Tuesday, offering a gloomy look on the economy due to the pandemic. And the euro was also a definitive loser on the week as we saw both disappointing economic/sentiment data from Europe, as well as data showing that covid continues to be a strong threat in the region despite falling case numbers.
USD Pairs
- U.S. core capital goods orders; shipments rise solidly in March
- February home prices see the biggest gain in 15 years, S&P Case-Shiller says
- Richmond Fed Manufacturing Index held steady at 17 in April
- Fed holds interest rates near zero, sees faster growth and higher inflation
- Joe Biden’s speech to Congress: five key takeaways
- U.S. recovery gains steam as spending fuels 6.4% GDP growth
- U.S. Personal income and spending rose 21.1% and 4.2%, respectively, in March, according to the Bureau of Economic Analysis
- The PCE Price Index rose 0.5%, while the core PCE Index, which excludes food and energy, rose 0.4% in the month.
- Fed’s Kaplan sees financial market ‘excesses,’ eyes QE taper
GBP Pairs
- BoE Deputy Governor Broadbent forecasts consecutive quarters of rapid growth
- U.K. retail sales rise above seasonal norms in April
- WHO warns UK is among countries with highest spread of Indian coronavirus variant
EUR Pairs
- Third COVID wave, supply bottlenecks hold back German recovery – Ifo
- ECB officials expect heated June decision on crisis program
- German GfK consumer climate index down from -6.1 to -8.8 vs. -4.1 forecast
- German job market data disappoints in further setback for recovery
- Annual growth rate of broad monetary aggregate M3 decreased to 10.1% in March 2021 from 12.2% in February (revised from 12.3%)
- ECB’s Lane warns full Euro area recovery is still some way off
- Euro area annual inflation up to 1.6% in April (Flash Estimate)
- Euro area unemployment at 8.1%; EU at 7.3% in March 2021
- Preliminary flash estimate for the first quarter of 2021 GDP down by 0.6% in the euro area and by 0.4% in the EU
CHF Pairs
- Turnover adjusted for sales days and holidays rose in the retail sector by 21.5% y/y in March 2021
- KOF Economic Barometer jumps to 134.02 in April
- Swiss National Bank Chairman says expansive policy remains essential
CAD Pairs
- Overlay of CAD Pairs: 1-Hour Forex ChartOverlay of CAD Pairs: 1-Hour Forex Chart
- Canadian retail sales jump 4.8% in February led by gains in autos, gasoline
- Canada GDP Rose 0.4% in February
NZD Pairs
- Overlay of NZD Pairs: 1-Hour Forex ChartOverlay of NZD Pairs: 1-Hour Forex Chart
- Solid bounce’ in business confidence has ANZ rethinking assumptions
- New Zealand posts nz$33 million trade surplus in March
AUD Pairs
- Australian headline CPI up 0.6% vs. 0.9% consensus in Q1 2021, trimmed mean CPI at 0.3% vs. 0.5% forecast
- Australian quarterly PPI up 0.4% vs. 0.3% forecast
- Australia’s private sector credit up 0.4% vs. 0.3% forecast
JPY Pairs
- Japanese services producers price index up 0.7% vs. expected flat reading
- BOJ signals prolonged easing, cuts price outlook as new COVID pain hits
- Japanese retail sales up 5.2% in March vs. 4.6% estimate
- Tokyo consumer prices slide as lower cellphone fees weigh on inflation
- Japan’s preliminary industrial production up 2.2% vs. projected 2.0% drop
- Japanese final manufacturing PMI upgraded from 52.7 to 53.6
- Japan jobless rate drops to 2.6% amid economic recovery
