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Forex News Timeline

Monday, May 1, 2017

Speaking with media over the weekend, Iran's oil minister Bijan Zanganeh noted that Iran is also willing to support the oil output cut deal extension.

Speaking with media over the weekend, Iran's oil minister Bijan Zanganeh noted that Iran is also willing to support the oil output cut deal extension.Key Quotes via Reuters:"During these last days we received a positive signal from OPEC members and non-OPEC contributors in this agreement for cutting the production for extending this agreement for the second half of 2017"

Livesquawk reports headlines from Fuji TV, citing that the Japanese PM Abe and US President Trump had a telephonic conversation this morning. No furt

Livesquawk reports headlines from Fuji TV, citing that the Japanese PM Abe and US President Trump had a telephonic conversation this morning. No further details have been provided on the same. 

The Reserve Bank of New Zealand (RBNZ) published the latest lending data, noting the following: Lending for new residential mortgages down 8.9% y/y

The Reserve Bank of New Zealand (RBNZ) published the latest lending data, noting the following: Lending for new residential mortgages down 8.9% y/y Investor lending down 32% y/y

The NZD/USD pair extends its bearish consolidation phase into a fourth day this Monday, with the bears now targeting a break below ten-month lows stru

The NZD/USD pair extends its bearish consolidation phase into a fourth day this Monday, with the bears now targeting a break below ten-month lows struck last week at 0.6845. Over the last hour, the Kiwi is seen making tepid-recovery attempts as broad USD rebound stalls, while persisting risk-on moods also boost the demand for higher-yielding currency NZD.Additionally, upbeat assessment of New Zealand’s economy by the NZ treasury in its monthly economic indicators report, further lends support to the recovery. However, it remains to be seen if the spot sustains the recovery ahead of a fresh batch of US economic data, which may provide extra legs to the USD rebound seen so far this session. The US docket offers the Core PCE price index, ISM manufacturing report, while US Treasury Secretary Mnuchin’s speech will also hog the limelight.US congressional negotiators have reached a deal to fund governmentNZD/USD Levels to consider                                                                               To the upside, the next resistance is located at 0.6893/0.6900 (classic R2/ round number), above which it could extend gains to 0.6943/50 (10-DMA/ psychological levels) and from there to 0.6966/82 (20-DMA/ 50-DMA). To the downside immediate support might be located at 0.6945 (10-month lows), and from there to 0.6800 (key support), below 0.6750 (psychological levels) would be tested.

The week ahead could be one to shake the foundations of the FXspace and set the tone for the rest of this year. The market has entered a phase of con

The week ahead could be one to shake the foundations of the FXspace and set the tone for the rest of this year. The market has entered a phase of consolidation post the first round French election result ahead of this week's FOMC, nonfarm payrolls, US core PCE inflation and the final round of the presidential elections for France where Le Pen faces Macron in a runoff election on May 7th. Ultimately, the outcome of the elections will cement the foundations for the EU, for the meanwhile that is, on a Macron win and is essential for stability in markets. The current polls are around 61% to 39% in favour of Macron. Meanwhile, the euro remains around the 1.09 handle at the start of the week having been as high as 1.0950 after the bullish post-round-one-election result when the euro rallied from the 1.0680 territories to the 1.0900 handle. In respect to EUR/USD, price action will firstly be determined by the outcome of the Fed and non-farm payrolls along with EU GDP Q1 and EU unemployment as the stand out events for this week.Nonfarm payrolls 'should' be the highlight eventThe highlight is likely to stay with the US labour market given that the Central banks that are meeting, the RBA and Fed, are expected to remain on hold and markets might take the French elections as a given. Analysts at Nomura offered their thoughts for this week's main event as follows: "Employment report (Friday): We expect nonfarm payrolls to have increased by 185k in April and private payrolls to have increased by 180k, implying a 5k gain in government jobs. Recent data on employment point to a return to trend in job creation following a downside surprise in March, which was likely due to temporary factors. Including March’s lower-than-expected reading, nonfarm payroll employment has an average increase of 178k over the first three months of 2017.  Moreover, labor market indicators from the Philly Fed and Empire State surveys improved further in April, indicating steady hiring activity in the manufacturing sector. In this regard, we expect an increase of 15k for manufacturing employment. Additionally, initial jobless claims and continuing claims remain subdued and currently hover near the lowest levels in the past three decades. From the household survey, we expect the unemployment rate to remain unchanged at 4.5% as increases in household employment will likely revert to trend after two months of outsized gains. Favorable labor market conditions over the past three months may also motivate discouraged workers to re-enter the labor force in search of employment. Regarding average hourly earnings, we expect a healthy 0.3% m-o-m (2.69% y-o-y) increase, a slight uptick from March’s 0.2% m-o-m (2.67% y-o-y) increase."European data risks this week? - NomuraKey events this 'BUSY' week for the US - Nomura

Economists at Goldman Sachs published a latest report on the US labor market over the weekend, as we head towards the US payrolls data due this Friday

Economists at Goldman Sachs published a latest report on the US labor market over the weekend, as we head towards the US payrolls data due this Friday.Key Points:On a broad range of measures, the US economy is now at full employment Headline unemployment has fallen below most estimates of the structural rate The discouraged worker share is back to pre-recession lows Still somewhat elevated share of involuntary part-timers is arguably structural The employment/population ratio remains well below its pre-recession level (this) gap is fully explained by a combination of population aging and declining participation of prime-age men This trend among prime-age men has continued for over six decades, has not stood in the way of a strong recent wage acceleration in that demographic, and therefore looks structural Job growth remains well above the pace needed to stabilize unemployment The speed of the likely overshoot is comparable to the average postwar cycle We have lowered our end-2018 unemployment rate forecast to 4.1% from 4.3% prior

The US dollar caught a fresh bid-wave across the board, prompting USD/JPY to stage a solid rebound from a dip to 111.20 levels amid holiday-thinned ma

The US dollar caught a fresh bid-wave across the board, prompting USD/JPY to stage a solid rebound from a dip to 111.20 levels amid holiday-thinned markets. Most major Asian and European markets are closed today in observance of their respective National holiday. The latest leg higher in the spot can be mainly attributed to resurgent USD demand against its main competitors, after the headlines hit the wires that the US congressional negotiators have reached a deal to fund government and avert a financial shutdown. Moreover, a better risk environment combined with thin markets exaggerate the moves in the major, while markets prefer to hold the US currency heading into a big week ahead, with focus on central banks’ policy decisions, US NFP report and Macron/ Le Pen run-off on May 7. In the meantime, the major now looks forward to the US treasury secretary Mnuchin’s speech and a host of US macro news due later in the day for fresh incentives.USD/JPY Technical levels                  A break above 111.78 (4-week tops) would expose 112 (round figure) and 112.61 (100-DMA). On the other hand, a breach of support at 111.37 (5-DMA) could yield a test of 111 (key support) and 110.61/49 (10 & 200-DMA).  

Following the news that U.S congressional negotiators have reached a deal to fund the government through until September, according to the Washington

Following the news that U.S congressional negotiators have reached a deal to fund the government through until September, according to the Washington Post, a few unnamed senior congressional aides are now being quoted, noting that Full House and Senate still must approve the deal. 

The New Zealand Treasury team is out with its latest monthly economic indicators report, highlighting the following: Overall, recent data and busines

The New Zealand Treasury team is out with its latest monthly economic indicators report, highlighting the following: Overall, recent data and business surveys point to economic expansion persisting at a solid pace in the March and June quarters Annual consumer price inflation picked up to 2.2%, as underlying price pressures continue to build Geopolitical risk creates market volatility with elections in Europe Economic indicators released in April suggest the economy expanded at a reasonable pace in the first quarter of 2017 and that underlying momentum will persist into the second quarter.

Brexit headlines reported on the front page of the UK Times for Monday, cited that the UK PM Theresa May renews threat to walk away from EU without a

Brexit headlines reported on the front page of the UK Times for Monday, cited that the UK PM Theresa May renews threat to walk away from EU without a deal. PM May responded to EU comments, “27 EU member states took just four minutes to agree a hardline stance on Brexit at a summit meeting in Brussels before Jean-Claude Juncker, the head of the European Commission, and Michel Barnier, the chief European Union Brexit negotiator, rounded on the prime minister.”

Analysts at Westpac offered their market outlooks for the antipodeans. Key Quotes: "AUD/USD 1 day:  Consolidating in a 0.7440-0.7500 range. AUD/USD

Analysts at Westpac offered their market outlooks for the antipodeans.Key Quotes:"AUD/USD 1 day:  Consolidating in a 0.7440-0.7500 range. AUD/USD 1-3 month: The modestly weaker than expected Australian CPI outcome has added yet another factor capping the A$: softer commodity prices; a more protectionist stance from US President Trump, and higher US yields if the Fed raises rates in June as we expect. These leave the A$ with strong resistance at 0.76. We expect to see it heading towards 0.74 by year end. (26 Apr) NZD/USD 1 day: Consolidating in a 0.6850-0.6900 range, but vulnerable to breaking lower. NZD/USD 1-3 month:  The Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down towards 0.6900. The RBNZ’s persistent reminders it is on hold for a long time should also weigh. (19 Apr). AUD/NZD 1 day: Momentum remains positive, targeting the 1.0950-1.1000 area next. AUD/NZD 1-3 month: Higher to 1.10. The cross remains well below fair value estimates implied by interest rates, commodity prices and risk sentiment, although is closing the gap (6 Mar). AU swap yields 1 day: The 3yr should open at around 2.97%, the 10yr around 2.85%. AU swap yields 1-3 month: Our RBA outlook is anchoring front end valuations. We expect 3yr swap rates to remain in a 2% to 2.3% range, with core inflation still below 2%,. (26 Apr) NZ swap yields 1 day: NZ 2yr swap rates should open unchanged at 2.30%, the 10yr also unchanged at 3.37%. NZ swap yields 1-3 month: The RBNZ said it has ended its easing cycle and will remain on hold until 2020. That will anchor the short end, although markets will not abandon their expectations for earlier tightening which means occasional spikes in the 2yr will be likely. The long end will continue to follow mainly US yields, which we expect to rise. That means the curve steepening trend should continue. (17 Feb)"

U.S congressional negotiators have reached a deal to fund the government through until September, according to congressional aides. This is a huge ma

U.S congressional negotiators have reached a deal to fund the government through until September, according to congressional aides. This is a huge matter for the US government and economy. Since 1982, the federal government has had 12 shutdowns, usually lasting only about five of days on average.  In the current circumstance, there is a possibility that the Republicans will propose changes that the Democrats in the Senate will object to and this is a concern for markets that are otherwise expecting Trump's administration to administer its fiscal policy, such as the recent sweeping tax proposals. While the economy is off the hook, for now, it will be a matter that to watch again in September. 
 

The week ahead could be one to shake the foundations of the FXspace and set the tone for the rest of this year. The market has entered a phase of con

The week ahead could be one to shake the foundations of the FXspace and set the tone for the rest of this year. The market has entered a phase of consolidation post the first round French election result ahead of this week's FOMC, nonfarm payrolls, US core PCE inflation and the final round of the presidential elections for France where Le Pen faces Macron in a runoff election on May 7th. Ultimately, the outcome of the elections will cement the foundations for the EU, for the meanwhile that is, on a Macron win and is essential for stability in markets. The current polls are around 61% to 39% in favour of Macron. Meanwhile, the euro remains around the 1.09 handle at the start of the week having been as high as 1.0950 after the bullish post-round-one-election result when the euro rallied from the 1.0680 territories to the 1.0900 handle. In respect to EUR/USD, price action will firstly be determined by the outcome of the Fed and non-farm payrolls along with EU GDP Q1 and EU unemployment as the stand out events for this week.Nonfarm payrolls 'should' be the highlight eventThe highlight is likely to stay with the US labour market given that the Central banks that are meeting, the RBA and Fed, are expected to remain on hold and markets might take the French elections as a given. Analysts at Nomura offered their thoughts for this week's main event as follows: "Employment report (Friday): We expect nonfarm payrolls to have increased by 185k in April and private payrolls to have increased by 180k, implying a 5k gain in government jobs. Recent data on employment point to a return to trend in job creation following a downside surprise in March, which was likely due to temporary factors. Including March’s lower-than-expected reading, nonfarm payroll employment has an average increase of 178k over the first three months of 2017.  Moreover, labor market indicators from the Philly Fed and Empire State surveys improved further in April, indicating steady hiring activity in the manufacturing sector. In this regard, we expect an increase of 15k for manufacturing employment. Additionally, initial jobless claims and continuing claims remain subdued and currently hover near the lowest levels in the past three decades. From the household survey, we expect the unemployment rate to remain unchanged at 4.5% as increases in household employment will likely revert to trend after two months of outsized gains. Favorable labor market conditions over the past three months may also motivate discouraged workers to re-enter the labor force in search of employment. Regarding average hourly earnings, we expect a healthy 0.3% m-o-m (2.69% y-o-y) increase, a slight uptick from March’s 0.2% m-o-m (2.67% y-o-y) increase."European data risks this week? - NomuraKey events this 'BUSY' week for the US - Nomura

Analysts at Nomura offered a round-up of the key events in the US this week, explained that recent data on employment point to a return to trend in no

Analysts at Nomura offered a round-up of the key events in the US this week, explained that recent data on employment point to a return to trend in nonfarm payroll gains in April following a downside surprise in March. European data risks this week? - NomuraKey Quotes:Personal income and spending (Friday): Income growth has been steady in early 2017 with steady increases in aggregate earnings. In February, income growth accelerated to 4.6% y-o-y in February, faster than the average pace in 2016. However, the March employment report surprised on the downside. Private production and nonsupervisory job creation slowed to below the six-month pace leading up to February, and the average weekly earnings of those on production and nonsupervisory payrolls slipped. This development suggests the growth in aggregate earnings was slower in March. Thus, we expect a slower 0.2% m-o-m increase in personal income. Consumer spending growth was sluggish earlier in the first quarter despite heightened optimism. March retail sales data showed some signs of recovery even though January and February were revised down. Yet, sales at motor vehicle and parts dealers continued to fall, portending a continued drag on durable goods spending in March. On the other hand, the decent recovery in sales at various nondurable goods vendors suggests a modest improvement in consumer spending on nondurable goods. Moreover, we expect services spending to have grown strongly, as utilities demand recovered notably in March. Electric and gas utilities output rebounded strongly in March as the weather was closer to the historical norm after unusually warm weather in January and February. As for non-energy related services spending, we expect steady growth. In sum, we expect a steady 0.3% m-o-m increase following a 0.1% increase in February.
PCE deflator (Friday): Core CPI inflation in March surprised on the downside, falling by 0.122% m-o-m. However, as the core PCE price index is also based on the relevant components of the PPI in addition to CPI, we think March core PCE inflation may not have been as weak as core CPI inflation. For example, despite a 0.3% fall in CPI’s physician services, PPI’s corresponding price index, an input into the core PCE price index, increased by 0.2% m-o-m. Moreover, CPI’s food-away-from-home prices (which are categorized into non-core components in CPI but used for estimating food service component of core PCE price index) increased steadily by 0.2% m-o-m. Lastly, weakness in rent-related price indices in core CPI may not be so negative to core PCE price index as the weightings assigned to the rent-related items in the core PCE price index are smaller than those assigned to related components in core CPI. Altogether, we forecast a slight 0.034% m-o-m decline for core PCE inflation in March, which translates into a 1.7% (1.651%) y-o-y increase, down from 1.8% (1.753%) in the prior month. On non-core items, we expect PCE deflator for food to have improved decently. CPI’s prices of food at home increased notably by 0.5% m-o-m in March following a 0.3% increase in February. On the other hand, we expect a sharp decline in PCE deflator for energy. The CPI energy index fell 3.2%, driven by lower gasoline and utility gas services prices. Altogether, we forecast a 0.134% m-o-m decline in headline PCE (+1.92% on a y-o-y basis). Construction spending (Monday): In February, construction spending was up 0.8% m-o-m with backward revisions (January was revised up but December was revised down). Private construction outlays increased steadily by 0.8% m-o-m. Public construction outlays rebounded by 0.6% after three consecutive month to month declines. Incoming data on architectural billings suggest a strong increase in private nonresidential construction spending is unlikely. However, residential building permits increased steadily, which suggests growth in private residential construction continued. However, there has not been notable evidence that public construction outlays have strongly picked up. Consensus expects a modest increase of 0.4% m-o-m in March. ISM manufacturing (Monday): The ISM manufacturing index declined slightly to 57.2 in March from 57.7 in February, indicating some moderation in manufacturers’ optimism. Both production and new orders indices declined, implying a slight moderation in the improvement of business activity. Incoming data imply a continued moderation in April. The Philly Fed and Empire State surveys indicate steady activity in April, but their headline indices declined from historically high levels. Therefore, we expect the headline ISM index to decline slightly to 56.0. Senior loan officer survey (Monday): In the latest survey for Q4, respondents indicated that, on balance, the banks left their standards on commercial and industrial (C&I) loans basically unchanged. The standards on commercial real estate (CRE) loans loosened somewhat, but remains relatively tight compared to the period prior to 2016. The respondents started tightening the standards for CRE loans around the end of 2015, reflecting increased attention from regulators and an oversupply of apartment buildings in some major cities. We expect these tighter standards to have sustained in Q1. In addition, lending standards on auto loans, one of major consumer loan components, tightened notably in Q4. The tightening may have been a response to the delinquency rate of subprime auto loans which deteriorated in recent quarters. Consumer demand for auto loans declined, which may have contributed to weak auto sales in recent months.Vehicle sales (Tuesday): In March, vehicle sales slowed to an annual rate of 16.53m units, their lowest level since February 2015. We expect vehicle sales to have rebounded in April to 17.2m, which is still short of the 2016 level of 17.46m. Even though we expect some reversal of the decline in March, automakers have been struggling to maintain the current pace of sales as incentive spending to boost sales has already reached high levels following aggressive incentive battles. Moreover, the inventory to sales ratio has increased in recent months. Considering these challenges, in the medium term, we expect vehicle sales to gradually decline to a more sustainable range of 16.0-16.5m units.Senior loan officer survey (Monday): In the latest survey for Q4, respondents indicated that, on balance, the banks left their standards on commercial and industrial (C&I) loans basically unchanged. The standards on commercial real estate (CRE) loans loosened somewhat, but remains relatively tight compared to the period prior to 2016. The respondents started tightening the standards for CRE loans around the end of 2015, reflecting increased attention from regulators and an oversupply of apartment buildings in some major cities. We expect these tighter standards to have sustained in Q1. In addition, lending standards on auto loans, one of major consumer loan components, tightened notably in Q4. The tightening may have been a response to the delinquency rate of subprime auto loans which deteriorated in recent quarters. Consumer demand for auto loans declined, which may have contributed to weak auto sales in recent months. Vehicle sales (Tuesday): In March, vehicle sales slowed to an annual rate of 16.53m units, their lowest level since February 2015. We expect vehicle sales to have rebounded in April to 17.2m, which is still short of the 2016 level of 17.46m. Even though we expect some reversal of the decline in March, automakers have been struggling to maintain the current pace of sales as incentive spending to boost sales has already reached high levels following aggressive incentive battles. Moreover, the inventory to sales ratio has increased in recent months. Considering these challenges, in the medium term, we expect vehicle sales to gradually decline to a more sustainable range of 16.0-16.5m units. ADP employment report (Wednesday): In line with our forecast for BLS private payrolls, we expect ADP private employment to have gained an additional 180k jobs in March. ISM non-manufacturing (Wednesday): The headline ISM non-manufacturing index decreased slightly to 55.2 in March from 57.6 in February. Survey-based measures of business activity, while elevated, suggest no acceleration between March and April. The Philly Fed headline index decreased slightly in April compared to March, while the Dallas Fed service sector activity index declined in April for the third consecutive month. These readings imply some moderation in business sentiment. Service-providing payrolls decelerated in March, while retail trade employment posted a consecutive month of employment losses. Moreover, given the recent turmoil in the brick and mortar retail industry, it will be interesting to see how this index fares. In April, we expect the ISM nonmanufacturing index to remain elevated but decline slightly to 54.5. FOMC meeting (Wednesday): We expect no change in short-term interest rate policy at the 2-3 May FOMC meeting. Recent Fedspeak indicates most members expect two more rate hikes later in 2017. While short-term interest rate policy will most likely remain unchanged at the upcoming meeting, markets will pay significant attention to the language of the FOMC statement at the end of the two-day meeting (3 May). Attention has shifted towards the Fed’s balance sheet policy in recent months with multiple speeches by Fed officials stressing the need for a well-communicated, smooth winding down. While there seems to be consensus among committee members regarding the timing of balance sheet adjustment, many questions remain regarding the specifics of the process. We find it most likely that there will be no significant change in language as it relates to the balance sheet – not much has changed since the most recent FOMC meeting. However, there is some possibility that the committee will attempt to provide more clarity regarding specifics of the long-term trajectory of the adjustment process. Additionally, the language of the first two paragraphs of the post-meeting statement, as they relate to recent economic developments and expectations, will be under some scrutiny as they may indicate the committee’s intentions for the next rate hike. Spending data over Q1 has remained soft since the last FOMC meeting and weakness in incoming data suggest the possibility of a significant slowdown in headline Q1 GDP. This development, combined with a downside surprise in both the March employment report and March core CPI, presents FOMC officials with some challenge in terms of how to assess the overall health of the economy. Given the data-dependency of monetary policy, it is important for the FOMC to describe the economic status in a way that it can manage market expectations. Language in the minutes from the March FOMC meeting indicates some willingness among members to look through Q1 weakness, attributing it to “temporary factors” including residual seasonality. However, we find the effect of residual seasonality, where some components contribute overly-negative growth to Q1 GDP, to be largely absent from the most recent Q1 data with previously-affected GDP components contributing positively to growth. In addition, the weaker-than-expected March employment report and core CPI might demand further elaboration regarding the committee’s intentions to overlook weak Q1 data.Initial jobless claims (Thursday): As labor markets tighten further, initial claims remain stable at historically low levels after continued downtrend during the recovery. For the week ending 22 April, the four-week moving average of initial unemployment claims was steady at 242k compared to 243k a week earlier. This recent trend appears consistent with other labor market indicators, including low levels of layoffs and a healthy average pace of payroll gains.  Trade balance (Thursday): According to the advance report on goods trade balance for March, both goods exports and imports declined but goods exports fell more sharply. Barring any big surprise on service trade, which tends to be relatively stable, we expect slight widening of trade deficit to USD44.5bn in March from USD43.6bn in February. Factory orders (Thursday): March readings for manufacturing surveys indicated a continued improvement in optimism during the month. Headline durable goods orders increased 0.5% m-o-m but, excluding volatile transportation components, durable goods orders decreased by 0.2%. However, the softness in durable goods orders extransportation stands in contrast to relatively strong capital goods shipments, which increased by 0.4% m-o-m, suggesting healthy current activity in the manufacturing sector. Overall, consensus expects a steady 0.6% m-o-m increase in factory orders for March.  Productivity Q1, preliminary (Thursday): Nonfarm productivity increased by an annualized 1.3% in Q4 2016, a moderately slower pace than the annualized 3.3% in Q3 2016. Incoming data for Q1 GDP indicates substantial weakness relative to previous quarters, portending further slowdown in productivity. Recent data on average weekly hours and average hourly earnings for production and nonsupervisory employees indicate relatively unchanged total hours worked in Q1 compared to Q4 2016. Reflecting these developments, consensus expects a flat reading of nonfarm productivity in 2017 Q1. Unit labor costs Q1, preliminary (Thursday): According to the BLS, unit labor costs increased by an annualized rate of 1.7% in Q4 2016, rebounding somewhat from the 0.7% reading in Q3. Average hourly earnings have increased moderately over the first three months of the quarter. However, incoming data portends some weakness in first quarter output which, combined with moderate increases in average hourly earnings, points to some pick up in unit labor costs. Consensus expects the preliminary reading for Q1 2017 to show an increase of 2.5% in unit labor costs. Employment report (Friday): We expect nonfarm payrolls to have increased by 185k in April and private payrolls to have increased by 180k, implying a 5k gain in government jobs. Recent data on employment point to a return to trend in job creation following a downside surprise in March, which was likely due to temporary factors. Including March’s lower-than-expected reading, nonfarm payroll employment has an average increase of 178k over the first three months of 2017. Moreover, labor market indicators from the Philly Fed and Empire State surveys improved further in April, indicating steady hiring activity in the manufacturing sector. In this regard, we expect an increase of 15k for manufacturing employment. Additionally, initial jobless claims and continuing claims remain subdued and currently hover near the lowest levels in the past three decades. From the household survey, we expect the unemployment rate to remain unchanged at 4.5% as increases in household employment will likely revert to trend after two months of outsized gains. Favorable labor market conditions over the past three months may also motivate discouraged workers to re-enter the labor force in search of employment. Regarding average hourly earnings, we expect a healthy 0.3% m-o-m (2.69% y-o-y) increase, a slight uptick from March’s 0.2% m-o-m (2.67% y-o-y) increase. Consumer credit (Friday): According to the Federal Reserve report, consumer credit increased $15.2bn in February, which is slight acceleration from the USD10.9bn increase in January. Revolving credit, which primarily consists of credit card loans, rebounded by 3.5% in February after an unexpected 3.2% drop in January. Nonrevolving, such as education and auto loans, continued to increase at a steady pace of 5.3%. As consumer fundamentals remain firm, we expect consumer credit to have expanded at a steady pace in March.

Analysts at Nomura offered their outlook for the week ahead in Europe. Key Quotes: "UK April PMIs and euro-zone flash Q1 GDP are in focus this week.

Analysts at Nomura offered their outlook for the week ahead in Europe.Key Quotes:"UK April PMIs and euro-zone flash Q1 GDP are in focus this week.  UK PMI surveys (Tuesday, Wednesday and Thursday): Our forecasts for April’s PMIs are unchanged from March. On the upside, export orders in the latest CBI survey were strong thanks to the global and European growth recoveries and a weaker sterling. On the downside, we expect consumer spending and investment demand to wane as the year progresses thanks to Brexit uncertainty and the past falls in the currency taking their toll on consumer prices.  Euro area flash Q1 GDP (Wednesday): We expect the first reading of euro area Q1 GDP to climb 0.6% q-o-q from 0.5% q-o-q in Q4. In the details we expect domestic consumption to maintain its recent strong momentum and exports to recover. Overall, we see the risks to our forecasts as being broadly balanced. If regional growth data continue to improve, we may not have to wait too long before the ECB indicates a change in its policy stance. We expect the ECB to announce a tapering of the QE programme at the September meeting for enactment at the start of next year.  UK household borrowing (Thursday): The Bank of England remains concerned about the pace of consumer credit growth, which has been supported by past growth in consumer spending (which may not persist) and a loosening of credit conditions – including falling interest rates on personal loans. If we are right in our view of slowing consumption (see UK article in this publication) then consumer credit growth may well slow in the coming months. Other UK data: Aside from the PMI surveys this week’s data are heavily consumer/ household-centric, including the BRC’s measure of shop price inflation (which correlates particularly well with headline CPI inflation), new car registrations and the Halifax house price index.  Other eurozone data: This week is heavy with final PMI data for April for the eurozone economies. We are not expecting any revisions to the headline composite, manufacturing or service sector indices for the eurozone. Regional PPI and retail sales data for March will also be published."

Australia TD Securities Inflation (MoM) up to 0.5% in April from previous 0.1%

Australia TD Securities Inflation (YoY) climbed from previous 2.2% to 2.6% in April

USD/JPY is currently trading at 111.35 with a high of 111.59 and a low of 111.20 while Japanese Nikkei manufacturing PMI came in at 52.7 vs 52.8 prior

USD/JPY is currently trading at 111.35 with a high of 111.59 and a low of 111.20 while Japanese Nikkei manufacturing PMI came in at 52.7 vs 52.8 prior. USD/JPY has been confined to a narrow range on the 111 handle after a string performance for the latter part of April's business, recovering from 108.20. Despite periods where yields in the US 10-year had been struggling below the psychological 2.30% level, the greenback's strength is underpinned by expectations of a Fed hike in June while the BoJ still struggles with soft CPI and weak industrial output in March.  However, the US reported Q1 GDP preliminary data at the end of last week that missed expectations.  The median forecast in the Bloomberg survey was for a 1.0% annualised gain vrs the averaged 1.1% gains since 2010, but came in at 0.7%. Also, the Michigan consumer confidence index fell to 97 in April from 98 in March. However, analysts at Brown Brothers Harriman suggested that the Fed's statement this week is likely to look past the setback in Q1 and that the US jobs report may be of greater importance than the FOMC meeting.  USD/JPY levelsUSD/JPY: Use 111/112 as a guide - Jim LanglandsTechnically, Valeria Bednarik, chief analyst at FXStreet explained that the daily chart shows that the price has settled above is 200 DMA, but also that the 100 DMA heads modestly lower around 112.70 and is the level to surpass to confirm a more sustainable recovery.  "In the same chart," she explained, "the Momentum indicator heads sharply higher within positive territory, whilst the RSI indicator also advances around 59, all of which supports additional gains. In the 4 hours chart, the price is also above its moving averages that anyway maintain their bearish slopes, the RSI indicator hovers around 65, but the Momentum heads south around its 100 level, indicating diminishing buying interest around the pair."

Japan Nikkei Manufacturing PMI dipped from previous 52.8 to 52.7 in April

Analysts at ANZ explained that NZD remains under pressure against the USD and other crosses. Key Quotes: "For NZD/USD, the 0.6860 level (Dec-16 low)

Analysts at ANZ explained that NZD remains under pressure against the USD and other crosses.Key Quotes:"For NZD/USD, the 0.6860 level (Dec-16 low) looks pivotal; a sustained break below opens up a push to the mid-0.66s. This weakness is at odds with local data, but global nuances are dominating. The finger can partly be pointed at protectionist nuances and the NZD looks like it is being thrown in with the CAD. The oddball is the NZD/AUD, which has traded against relative inflation signals."

Analysts at Nomura noted that the official manufacturing PMI moderated to 51.2 in April from 51.8 in March (Consensus and Nomura: 51.7).

Analysts at Nomura noted that the official manufacturing PMI moderated to 51.2 in April from 51.8 in March (Consensus and Nomura: 51.7).AUD/USD trying to recover but struggles at 0.7480/00, bearish bias persistsKey Quotes:"The PMIs for large and medium-size enterprises fell, but remained above the expansion/contraction threshold of 50, while the PMI for small enterprises rose to the 50.0 mark for the first time in more than two years, possibly benefitting from rising investment demand. By component, most sub-indices moderated in April. The output sub-index fell by 0.4 percentage points (pp) to 53.8 and the new orders sub-index by 1.0pp to 52.3, but remains well inside expansive territory. Meanwhile, the purchasing price sub-index fell sharply by 7.5pp to 51.8, pointing to further easing of inflationary pressures on the producer side. The business expectations sub-index also continued to moderate. The still-high output and new orders sub-indices suggest growth momentum likely remained resilient in April, albeit slower than in a strong March. Looking ahead, we see downside pressures looming and maintain our call for a shallow slowdown through the course of this year. 

AUD/USD is currently trading at 0.7487 with a high of 0.7495 and a low of 0.7466. The Australian dollar extended its decline vs the greenback last we

AUD/USD is currently trading at 0.7487 with a high of 0.7495 and a low of 0.7466. The Australian dollar extended its decline vs the greenback last week but stablised int he last few sessions below the 075 handle having lost around 1.2% on the week and dropping to the lowest level since mid-January as analysts at Brown Brothers Harriman noted. The price has started to correct with potentially tough resistance at the top of the consolidative channel.Australian dollar continues to fall out of favour - BBHFundamentally, casting minds back to the most recent and more significant data from Australia, the modestly weaker than expected Australian CPI outcome has added yet another factor capping the AUD/USD, explained analysts at Westpac while also highlighting softer commodity prices; a more protectionist stance from US President Trump, and higher US yields if the Fed raises rates in June as additional bearish factors. "These leave the AUD/USD with strong resistance at 0.76. We expect to see it heading towards 0.74 by year end." With this in mind, the RBA will meet this week as will the Fed, both of whom are not expected to act on this occasion. AUD/USD levels AUDUSD: The price action leaves the recent 0.7440/0.7500 range intact - Jim LanglandsFrom a technical point of view, Valeria Bednarik, chief analysts at FXStreet explained that the pair is biased lower. "The daily chart, the pair is developing below a bearish 20 DMA, currently around 0.7520, whilst technical indicators lack directional strength, but hold within bearish territory." Zooming in on the 4 hours chart, Valeria Bednarik explained that the price is hovering around a strongly bearish 20 SMA, while technical indicators have recovered from oversold readings, with the Momentum now aiming higher within a neutral territory and the RSI indicator flat around 46.

Australia AiG Performance of Mfg Index up to 59.2 in April from previous 57.5

Analysts at Brown Brothers Harriman explained that the dollar rose in four of last week's five sessions against the yen.   Key Quotes: "It rose a li

Analysts at Brown Brothers Harriman explained that the dollar rose in four of last week's five sessions against the yen.  Key Quotes:"It rose a little more than 2% last week, its second consecutive weekly advance and the largest weekly advance here in 2017. The dollar has build a small shelf now in the JPY110.80-JPY111.00 area. The JPY112 area that has been approached corresponds to the 61.8% retracement of the sell-off since the start of the year.  The five-day moving average moved above the 20-day average for the first time since mid-March.   The technical indicators are constructive.   A move above JPY112.00 could encourage a test on the falling trend line drawn off the January and March highs and comes in near JPY113 by the end of the week ahead.  In terms of portfolio flows, we note that the last data through the April 21, showed Japanese investors sold what appears to be a record amount of foreign bonds over a three-week period (~JPY4.2 trillion or ~$37 bln)."

China Non-manufacturing PMI fell from previous 55.1 to 54 in April

China NBS Manufacturing PMI registered at 51.2, below expectations (51.6) in April

NZD/USD is currently trading at 0.6863 with a high of 0.6892 and a low of 0.6849.  Market wrap: data mixed but left a stronger picture for the US e

NZD/USD is currently trading at 0.6863 with a high of 0.6892 and a low of 0.6849. Market wrap: data mixed but left a stronger picture for the US economy - WestpacNZD/USD has seen better days, currently in a steep bearish continuation of the September 2016 peak at 0.7484. The US dollar, however, is a mixed bag at the moment on the back of the US data on Friday as well as direct performances of its counterparts.US Q1 GDP: Sluggish start of the year, rebound expected - Wells FargoQ1 GDP growth rose 0.7% annualised (vs 1.0% expected, but well above the Atlanta Fed’s model prediction of 0.2%). "Almost all the slowdown was attributed to the consumer, adding just 0.2ppts to growth in the quarter after two quarters in a row above trend (adding more than 2ppts in each quarter)," explained analysts at Westpac, adding, "the most notable area of consumer weakness was in autos, where there was a sharp slowing, but given healthy labour market trends that can be looked through." Meanwhile, analysts at Brown Brothers Harriman explained, that presently, the dollar appears better understood at the fulcrum. Last week it fell against European currencies and advanced against the dollar bloc and yen."While this may continue, we suspect robust US data (April auto sales and employment) could spur a return of the dollar as the primary mover.  If this scenario does materialize, the recent weakness of the Australian and Canadian dollars may be seen as leading the move."  In respect to the bird, within the bearish momentum, it is vulnerable to breaking lower and out of the recent range between 0.6850/00.NZD/USD 1-3 month:  The analysts at Westpac suggested that the Fed’s tightening cycle plus US fiscal expansion should maintain upside pressure on US interest rates and the US dollar, pushing NZD/USD down towards 0.6900. "The RBNZ’s persistent reminders it is on hold for a long time should also weigh. (19 Apr)."NZD/USD levelsNZD/USD has broken the critical support level 0.6885 and is testing the 0.6850 range low. Next key support below 0.6700 is down to 0.6675 as the 29th May 2016 high. On a break higher back towards the 0.70 handle, the previous bulls have the 17th April highs of 0.7035 is sight protecting 0.7060/70 and recent high today around the 200-d ema (0.7067). There is a double bottom at 0.7130 as the mid-Feb lows.

Analysts at ANZ noted that China’s PMI figures for manufacturing and services showed a pull-back in April, and softening growth momentum in Q2 relativ

Analysts at ANZ noted that China’s PMI figures for manufacturing and services showed a pull-back in April, and softening growth momentum in Q2 relative to Q1. Key Quotes:"However, the figures (manufacturing 51.2, services 54) were still above the key 50 threshold, and reaching the Government’s growth target of 6.5% looks on track. Monetary policy is tightening, city specific tightening measures with regard to property are in, greater emphasis is being placed on financial stability, and financial deleveraging needs to take place. So it’s inevitable that the Chinese growth cycle steps down a gear, and commodity price action has already been bearing that out."

Analysts at Brown Brothers Harriman explained that the Australian dollar continues to fall out of favour.  Key Quotes: "It lost about 1.2% last week

Analysts at Brown Brothers Harriman explained that the Australian dollar continues to fall out of favour. Key Quotes:"It lost about 1.2% last week and fell to its lowest level since mid-January.  It fell in three of the four weeks in April. The convincing break of $0.7470 warns of scope for another 1% fall toward $0.7400. However, over the longer term, the measuring objective of the potential double top (February and March) near $0.7740-$0.7750, projects toward $0.7250. The technical indicators are consistent with additional losses, though the lower Bollinger band is seen near $0.7450."
 

Analysts at Westpac offered a market wrap. Key Quotes: "Global market sentiment: US interest rates fell after a mixed bag of economic data, includin

Analysts at Westpac offered a market wrap.Key Quotes:"Global market sentiment: US interest rates fell after a mixed bag of economic data, including GDP, although the dollar and equities were little changed. The US Administration averted a government shutdown by extending the current spending initiatives for one week.   Interest rates: US 10yr treasury yields initially rose from 2.28% to 2.33% but completely retraced after the data releases, led by GDP. 2yr yields similarly roundtripped from 1.26% to 1.29% and back. Fed fund futures yields were little changed, pricing a June rate hike as a 75% chance. CFTC data shows 10yr note futures speculators flipped abruptly from a short position to the longest since 2008. Bets on Fed rate hikes haven’t been abandoned, though, with 3mth Eurodollar futures positioning remaining near record short. Currencies: The US dollar index fell pre-data but rebounded thereafter for little net change. EUR rose from 1.0860 to 1.0947, helped by a strong inflation report, but retraced to 1.0883 in NY. USD/JPY rose from 111.10 to 111.71 before pulling back to 111.35 post-US data. AUD was volatile, initially falling from 0.7485 to 0.7448 and then rebounding sharply to 0.7491. NZD was fairly stable in a 0.6850-0.6880 range. AUD/NZD rose from 1.0860 to 1.0916.US data wrap:US data was mixed but left a stronger overall picture for the economy. Q1 GDP growth rose 0.7% annualised (vs 1.0% expected, but well above the Atlanta Fed’s model prediction of 0.2%). Almost all the slowdown was attributed to the consumer, adding just 0.2ppts to growth in the quarter after two quarters in a row above trend (adding more than 2ppts in each quarter). The most notable area of consumer weakness was in autos, where there was a sharp slowing, but given healthy labour market trends that can be looked through.  The other area of weakness was inventories, which shaved 0.9ppts off growth in the quarter. It’s a relatively upbeat picture elsewhere: business investment added 1.1ppts to growth in the quarter, the strongest in several years and housing investment chipped in with a +0.5ppts contribution, also the fastest in several years. The price deflators were more eye-catching, the overall DP price index up 2.3% (2.0% expected) while the employment cost index was punchy too: +0.8% (0.6% expected). Lumpy benefits accounted for some of the upside surprise but wages and salaries jumped 0.8%, the strongest in several years. The ECI is a vastly superior measure of wages than average hourly earnings and is now finally beginning to stir with signs of wages pressure. The Chicago PMI rose from 57.7 to 58.3 (vs 56.2 expected). Consumer confidence (Michigan Univ.) was revised lower, from 98.0 to 97.0, although still above 96.9 in March. Eurozone CPI inflation rose 1.9% yoy (vs 1.8% expected) in April from 1.5% in March. Core inflation jumped from 0.7% yoy to 1.2%. Price boosting Easter holidays were in April this year, rather than March last year."