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US ISM services rose to 63.7, corresponds to 5.1% annualized GDP growth

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    ActionForex.com
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    US ISM Services jumped to 63.7 in March, up from 55.3, above expectation of 58.5. Looking at some details, business activity/production rose 13.9 pts to 69.4. New orders rose 15.3 pts to 67.2. Employment rose 4.5 pts to 57.2. Prices rose 2.2 pts to 74.0.

    ISM said: “The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for March (63.7 percent) corresponds to a 5.1-percent increase in real gross domestic product (GDP) on an annualized basis.”

    Full release here.

    CAD/JPY and EUR/CAD lost some momentum after last week’s moves

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      ActionForex.com
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      CAD/JPY lost momentum after after hitting 88.28 last week. But overall, outlook remains bullish as long as 86.05 support holds. Current up trend from 73.80 is likely reversing the down trend from 106.48. 91.62 long term resistance is the next upside target. Sustained break there will confirm long term bullishness.

      EUR/CAD also lost downside momentum after hitting 1.4737 last week. But overall, outlook stays bearishness with 1.4972 resistance intact. Focus is now on 161.8% projection of 1.5978 to 1.5313 from 1.5783 at 1.4707. Sustained break there will pave the way towards 1.4263 key support level. However, as current decline from 1.5991 could be just a leg inside the long term sideway pattern from 1.6103. We’d look for more signs of bottoming as it approaches 1.4623.

      GBP rises against EUR and CHF in quiet trading

        By
        ActionForex.com
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        Sterling surges broadly in quiet holiday trading today, in particular against other European majors. GBP/CHF resumes recent up trend by breaking through last week’s high of 1.3059. Rise from 1.1683 is seen as the third leg of the whole up trend from 1.1102. Next target is 1.3310 medium term resistance, and then 161.8% projection of 1.1102 to 1.2259 from 1.1683 at 1.3555. Break of 1.2998 minor support will bring some consolidations first. But outlook will stay bullish as long as 1.2769 support holds.

        EUR/GBP also accelerates downward to as low as 0.8470 so far. Current fall from 0.9291 is seen as the third leg of the pattern from 0.9499. Deeper decline would be seen to 0.8276 support next. We’d look for bottoming signal as it approaches this support. However, firm break there will carry larger bearish implications, and could pave the way to 100% projection of 0.9499 to 0.8670 from 0.9291 at 0.7950 in the medium term. Above 0.8532 will bring some consolidations. But outlook will stay bearish as long as 0.8644 resistance holds.

         

        US NFP rose 916 in Mar, unemployment rate dropped to 6.0%

          By
          ActionForex.com
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          US non-farm payroll employment rose 916k in March, well above expectation of 633k. Unemployment rate dropped to 6.0%, below expectation of 6.1%. Labor force participation rate was little changed at 61.5%. Average hourly earnings, however, dropped -0.1% mom, below expectation of 0.2% mom.

          Full release here.

          US ISM manufacturing rose to 64.7, highest since 1983

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            ActionForex.com
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            US ISM Manufacturing PMI jumped to 64.7 in March, up from 60.8, above expectation of 61.0. That’s also the highest level since December 1983. Looking at some details, new orders rose 3.2 to 68.0. Production rose 4.9 to 68.1. Employment rose 5.2 to 59.6. Prices dropped -0.4 to 85.6.

            ISM: “The past relationship between the Manufacturing PMI® and the overall economy indicates that the Manufacturing PMI® for March (64.7 percent) corresponds to a 6.2-percent increase in real gross domestic product (GDP) on an annualized basis.”

            Full release here.

            US initial jobless claims rose to 719k, continuing claims at 3.8m

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              ActionForex.com
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              US initial jobless claims rose 61k to 719k in the week ending March 27, above expectation of 678k. Four-week moving average of initial claims dropped -10.5k to 719k.

              Continuing claims dropped -46k to 3794k in the week ending March 20. Four-week moving average of continuing claims dropped -147k to 3979k.

              Full release here.

              ECB Lane: 2021 rise in inflation just the unwinding of 2020 disinflationary forces

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                ActionForex.com
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                ECB chief economist Philip Lane said in a blog post that “the volatility of inflation during 2020-2021 can be largely attributed to the nature of the pandemic shock”. Increase in inflation in 2021 can be “best interpreted as the unwinding of disinflationary forces that took hold in 2020” only.

                Medium term inflation outlook “remains subdued, amid “weak demand and substantial slack in labour and product market”. Against this background, Lane said, “ensuring favourable financing conditions is fundamental to restoring inflation momentum and guiding the formation of inflation expectations”

                “Offsetting the negative pandemic shock to the inflation outlook is only the first stage of the monetary policy challenge,” he added. Even after the disinflationary pressures are offset, ” we will have to ensure that the monetary policy stance delivers the timely and robust convergence to our inflation aim.”.

                Full blog post here.

                UK PMI manufacturing finalized at 58.9 in Mar, signs of spring appeared

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                  ActionForex.com
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                  UK PMI Manufacturing was finalized at 58.9 in March, up from February’s 55.1. That’s the highest level in 121 months since February 2011. Business optimism rose to seven-year high. But supply-chain disruption and inflationary pressures built.

                  Rob Dobson, Director at IHS Markit: “Signs of Spring have appeared in the UK manufacturing sector, with the PMI hitting its highest level in a decade… Weak export sales and supply-chain issues are likely to remain constraints on growth moving forward, however… Demand outstripping supply to such a wide extent is meanwhile driving up prices… The longer these inflationary and supply-chain worries persist, the greater the potential to curb the strength of the upturn as the economy unlocks in the coming weeks and months.”

                  Full release here.

                  Eurozone PMI manufacturing finalized at 62.5 in Mar, improvement broad based across the region

                    By
                    ActionForex.com
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                    Eurozone PMI Manufacturing was finalized at 62.5 in March, up from February’s 57.9. Manufacturing economy “performed extremely strongly”, with “operating conditions improving to the greatest degree in nearly 24 years of data collection.”

                    Looking at some member states, Germany PMI manufacturing rose to 66.6, a record high. The Netherlands rose to 64.7, record high. Australia rose to 63.4, 39-month high. Italy rose to 59.8, 252-month high. France rose to 59.3, 246-month high. Ireland rose to 57.1, 8-month high. Spain rose to 56.9, 171-month high. Even Greece rose to 51.8, 13-month high.

                    Chris Williamson, Chief Business Economist at IHS Markit said: “Although centred on Germany… the improving trend is broad based across the region as factories benefit from rising domestic demand and resurgent export growth…. Driving the upturn has been a marked improvement in business confidence in recent months, with expectations of growth in the year ahead running at record highs in February and March.”

                    Full release here.

                    Australia exports dropped -1% mom in Feb, imports rose 5%

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                      ActionForex.com
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                      Australia goods and services exports dropped -1% mom to AUD 38.93B in February. Goods and services imports rose 5% mom to AUD 31.40B. Trade surplus came in at AUD 7.53B, down form January’s AUD 9.62B, below expectation of AUD 9.40B.

                      Retail sales dropped -0.8% mom in February, revised up from preliminary reading of -1.1% mom.

                      Australia AiG manufacturing rose to 59.9 in Mar, highest since 2018

                        By
                        ActionForex.com
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                        Australia AiG Performance of Manufacturing Index rose to 59.9 in March, up from 58.8. That’s the highest level since March 2018, and indicates a sixth consecutive month of strong recovery. Looking at some details, production dropped -8.6 to 57.2. Employment rose 8.2 to 66.0. New orders rose 3.6 to 63.5. Exports dropped -2.8 to 51.3. Input prices dropped -2.8 to 71.3. Selling prices rose 8.5 to 59.7.

                        Ai Group Chief Executive Innes Willox said: “The strong recovery in Australian manufacturing gathered further pace in March with growth across the full range of sectors. Production and sales continued to expand despite pulling back from very rapid rates of growth in February. Employment growth surged with manufacturers’ confidence boosted by buoyant levels of new orders. The machinery & equipment sector benefitted from higher demand from across the industrial, mining and agricultural sectors while the metal products and building equipment sectors supplied into healthy levels of residential construction and infrastructure activity.

                        “Some growing pains are evident with deliveries of inputs not keeping up with sales of finished products and with reports of skill shortages becoming more widespread. The challenge over the next couple of months will be to maintain momentum as fiscal support is wound back further and while COVID-19 remains a threat.”

                        Full release here.

                        China Caixin PMI manufacturing dropped to 50.6, growing inflationary pressure

                          By
                          ActionForex.com
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                          China Caixin Manufacturing PMI dropped to 50.6 in March, down from 50.9, missed expectation of 51.0. Markit noted that production increased again amid further uptick in sales. Export orders rose for the first time in three months. Inflationary pressures also picked up.

                          Wang Zhe, Senior Economist at Caixin Insight Group said: “Overall, the manufacturing sector continued to recover in March, but the momentum of both supply and demand weakened. Overseas demand largely improved. The sector remained under employment pressure. Manufacturing enterprises were still confident that the economy will continue to recover and that the pandemic will be brought under control, with the gauge for future output expectations exceeding the long-term average.

                          “We should pay attention to inflation in future as the gauges for input and output prices have been rising for several months. The growing inflationary pressure limits the room for future policies and is not a good thing for sustaining an economic recovery in the postepidemic period.”

                          Full release here.

                          Japan Tankan large manufacturing index rose to 5 in Q1, highest since Q3 2019

                            By
                            ActionForex.com
                            -

                            Japan Tankan Large Manufacturing Index rose to 5 in Q1, up from -10, above expectation of 0. That’s also the highest level since Q3 2019. Non-Manufacturing Index rose to -1, up from -5, above expectation of -5. Large Manufacturing Outlook rose to 4, up from -8, matched expectations. Non-Manufacturing Outlook rose to -1, up from -6, above expectation of -2. All industry Capex rose 3.0%, above expectation of 1.4%.

                            Also released, PMI Manufacturing was finalized at 52.7 in March, up from February’s 51.4. Usamah Bhatti, Economist at IHS Markit, said: “The Japanese manufacturing sector continued to gather some positive momentum at the end of the first quarter of 2021… Beyond the immediate future, Japanese manufacturers were confident that output would continue to rise over the coming 12 months… Currently, IHS Markit estimates that industrial production in Japan will grow 7.7% in 2021, yet this does not fully recover the output lost in 2020.”

                            US oil inventory dropped -0.9m barrels, WTI struggles to extend rebound

                              By
                              ActionForex.com
                              -

                              US commercial crude oil inventories dropped -0.9m barrels in the week ending March 26, versus expectation of -1.3m. At 501.8m barrels, oil inventories are about 6% above the five year average for this time of year. Gasoline inventories dropped -1.7m barrels. Distillate rose 2.5m barrels. Propane/propylene dropped -2.0m barrels. Commercial petroleum inventories dropped -1.3m barrels.

                              WTI crude oil is still struggling in established range above 57.31. While it’s drawing some support from 55 day EMA, it’s struggling to extend the rebound form 57.31. Focus is now on 62.22 resistance. Firm break there will indicate completion of the correction from 67.83, and bring retest of this high.

                              Nevertheless, sustained break of the 55 day EMA will indicate that WTI is in a medium term correction. Deeper fall should be seen to 38.2% retracement of 33.50 to 67.83 at 54.71 at least, before the correction completes..

                              Canada GDP grew 0.7% mom in Jan, expecting 0.5% mom growth in Feb

                                By
                                ActionForex.com
                                -

                                Canada GDP grew 0.7% mom in January, above expectation of 0.5% mom. That’s the ninth consecutive monthly increase. Yet, total economic activity remained about -3% below February 2020 level, before the pandemic. Good-producing industries were up 1.5% mom while services-producing industries were up 0.4% mom. 20 industrial sectors were nearly evenly split between expansions and contractions.

                                Preliminary information suggests an approximate 0.5% increase in real GDP for February. Retail trade, construction, and real estate and rental and leasing all contributed to the growth, while manufacturing offset some of the increase.

                                Full release here.

                                US ADP jobs grew 517k, strongest since last Sep

                                  By
                                  ActionForex.com
                                  -

                                  US ADP employment grew 517k in March, below expectation of 550k. By company size, small businesses added 174k jobs, medium businesses added 188k, large businesses added 155k. By sector, goods-producing jobs grew 80k, service-providing grew 437k.

                                  “We saw marked improvement in March’s labor market data, reporting the strongest gain since September 2020,” said Nela Richardson, chief economist, ADP. “Job growth in the service sector significantly outpaced its recent monthly average, led with notable increase by the leisure and hospitality industry. This sector has the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available. We are continuing to keep a close watch on the hardest hit sectors but the groundwork is being laid for a further boost in the monthly pace of hiring in the months ahead.”

                                  Full release here.

                                  ECB Lagarde: We have exceptional circumstances to deal with at the moment

                                    By
                                    ActionForex.com
                                    -

                                    ECB President Christine Lagarde said in a Bloomberg TV interview, “we have exceptional circumstances to deal with at the moment and we have exceptional tools to use at the moment, and a battery of those. We will use them as and when needed in order to deliver on our mandate and deliver on our pledge to the economy.”

                                    “Given the exceptional situation that we are facing we are using maximum flexibility” with the EUR 1.85T PEPP purchases program, she added. The March 2022 deadline of the program was not “set in stone”, and policy makers will give “sufficient early notice to avoid the anxiety, the tantrum, or any of those movements” that have happened in the past.

                                    Overall, Lagarde said, “we have an economic situation overall which in this part of the world, Europe, is really marked by uncertainty. What monetary policy has to do and what the ECB has to do is to provide as much certainty as possible.”

                                    Eurozone CPI jumped to 1.3% yoy in Mar, but core CPI slowed to 0.9% yoy

                                      By
                                      ActionForex.com
                                      -

                                      Eurozone CPI jumped to 1.3% yoy in March, up from 0.9% yoy, above expectation of 0.9% yoy. However, CPI core dropped to 0.9% yoy, down from 1.1% yoy, missed expectation of 1.1% yoy.

                                      Energy is expected to have the highest annual rate in March (4.3%, compared with -1.7% in February), followed by services (1.3%, compared with 1.2% in February), food, alcohol & tobacco (1.1%, compared with 1.3% in February) and non-energy industrial goods (0.3%, compared with 1.0% in February).

                                      Full release here.

                                      UK Q4 GDP finalized at 1.3% qoq, contracted -9.8% in a 2020 as a whole

                                        By
                                        ActionForex.com
                                        -

                                        UK GDP growth was finalized 1.3% qoq in Q4, revised up from 1.0% qoq. The level of GDP was still -7.3% below it’s Q4, 2019 level, prior to the impact of the coronavirus pandemic. Over the year as a whole, GDP contracted -9.8% in 2020, slightly revised from first estimate of -9.9% decline. That is the largest annual fall in UK GDP on record.

                                        Full release here.

                                        France CPI jumped to 1.1% yoy in Mar, consumer spending flat in Feb

                                          By
                                          ActionForex.com
                                          -

                                          France CPI accelerated to 1.1% yoy in March, up from February’s 0.6% yoy. This increase in inflation should result from the acceleration in the service prices and from a marked rebound of those of the energy.

                                          Consumer spending was flat in February, below expectation of 1.3% mom rise. The increase in manufactured goods purchases (+3.4%) was offset by a drop in energy expenditure (-3.1%) and food consumption (-2.2%).

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