The Dollar took a beating as traders leaned away from safe havens, and we also saw a disappointing read from the latest U.S. employment update to cement the Greenback’s status as the “biggest loser” of the week.
And the Comdolls were the big winners in FX, likely on both the positive risk sentiment lean, but also on the massive surge in commodity prices.
Notable News & Economic Updates:
- Sustained improvement in South Korean manufacturing output in April
- Indian factory orders & production rise at slowest rates in eight months
- Global manufacturing upturn accelerates with firmer growth of production, demand and employment
- Zimbabwe central bank says keeps policy rate at 40%
- Yellen Says Rates Might Need to Rise as Economy Recovers
- U.S. cases, vaccinations continue to drop as White House sets new inoculation goal
- Oil prices rise after steep drop in U.S. crude inventories
- Global economic growth accelerates to 11-year high as new orders and international trade rise at stronger rates
- ASEAN manufacturing growth quickens to strongest since July 2014
- China suspends economic dialogue mechanism with Australia
- Commodities jump to highest since 2011 on rebound from virus
- Moderna says early data shows Covid vaccine is 96% effective in teens
- Asia Sector PMI: Autos sector returns to top of Asian growth rankings in April
- Dow rises 250 points to a record despite a big jobs miss as investors bet easy policies will remain
- SEC Chairman Gary Gensler says more investor protections are needed for bitcoin and crypto markets
Risk-on Sentiment this week
The global markets showed a broad lean towards risk-on vibes as oil, equities, and crypto assets closed in the green. Even gold was on the upswing this week, likely taking advantage of U.S. dollar weakness, as well as a dip in bond yields.
Contributing to these vibes may have come from a combination of net positive business sentiment updates from around the globe (Global economic growth accelerates to 11-year high as new orders and international trade rise at stronger rates), and possibly on positive developments from the global vaccine front (e.g., Moderna says early data shows Covid vaccine is 96% effective in teens).
We also saw got commentary from central bank / government figures that signaled on net that simulative measures were here to stay for now (Yellen Clarifies Inflation Remark, Sees No Need for Fed to Hike), despite rising inflation figures and as the global economy grows as the pandemic begins to fade.
In the forex markets, the Australian and New Zealand dollars were the big winners this week, likely driven by the net positive reads from around the global economy and vaccine developments/progress, as well as the rapidly rising commodity prices, as shown by the Bloomberg Commodity Spot Index. After dropping to a four-year low in March of 2020, the index has risen 70% since as demand has spike with the pandemic recovery.
USD Pairs
- Strongest improvement in U.S. operating conditions on record amid marked uptick in client demand
- ISM manufacturing PMI falls 4 points to 60.7 in April.
- Fed’s Powell says economic recovery clouded by racial, education gaps
- Fed’s Daly: not time to talk taper yet
- Yellen Says Rates Might Need to Rise as Economy Recovers
- U.S. private payrolls post biggest gain in seven months in April
- ISM Services PMI at 62.7 in April vs. 63.7 in March
- U.S. Business activity expands at fastest pace on record amid marked uptick in client demand
- U.S. weekly jobless claims drop below 500,000; layoffs lowest since 2000
- April’s expected hiring boom goes bust as nonfarm payroll gain falls well short of estimates
GBP Pairs
- U.K. manufacturing PMI at near-record high in April but sector still beset by supply-chain disruptions
- Bank of England sees UK growth surging over 7% this year on Covid vaccine rollout
- Bank of England governor warns inflation will be ‘a bit bumpy’ this year, but no cause for alarm
- Strong increase in UK construction output. Costs rise at fastest pace since survey began in 1997
EUR Pairs
- Germany’s retail sales growth accelerates in March
- ECB can start phasing out emergency stimulus when vaccinations pick up – de Guindos
- German Manufacturing sector continues to show strength despite
- Eurozone manufacturing PMI hits fresh survey record high in April
- Eurozone private sector growth continues to strengthen in April
- Volume of retail trade up by 2.7% m/m in euro area
- and by 2.6% m/m in the EU in March
- German exports in March 2021: +1.2% m/m
- In Q1 2021, French payroll employment increased by 0.3% (flash estimate)
- European Machinery & Equipment sector posts record output growth in April
CHF Pairs
- Swiss consumer sentiment back to pre-crisis level
- Swiss Consumer prices increased by 0.2% in April
- Swiss unemployment rate fell from 3.4% in March 2021 to 3.3% in April
CAD Pairs
- Robust growth in Canadian manufacturing production sustained in April
- Canada returns to trade deficit position in March as imports surge
- 207K Canadian jobs were lost in April, more than the average analyst prediction for a loss of 175K. The unemployment rate climbed to 8.1%
- Canada’s Ivey PMI shows activity expanding at a slower pace in April
NZD Pairs
- RBNZ prepared to tighten lending further as house prices soar
- ANZ World Commodity Price Index: +2.3% m/m in April, making new record highs
- New Zealand preliminary ANZ business confidence index up from -2.0 to +7.0
AUD Pairs
- Australia’s manufacturing goes from strength to strength in April 2021
- Australia job ads rise 4.7% in April as demand for labor stays strong
- Australian manufacturing sector expansion hits survey peak, accompanied by record cost inflation
- RBA kept rates unchanged at 0.10% as expected; RBA to reevaluate April 2024 bond targets in next policy decision
- Australia construction index eases from record high in April – AiG
- China suspends economic dialogue mechanism with Australia
- Australia’s services sector recovery continues to strengthen in April
- Australia’s RBA sees growth boom underway, but wages left far behind
JPY Pairs
- Japan reportedly considering extending Covid state of emergency, casting doubts on Tokyo Olympics
- Japan March real wages rise for 2nd straight month
- Japan’s service sector shrinks at slowest pace since health crisis started – PMI
