It was a slightly busier week on the economic calendar, in the week ending 19th March.
A total of 53 stats were monitored, following 45 stats from the week prior.
Of the 53 stats, 23 came in ahead forecasts, with 23 economic indicators coming up short of forecasts. There were 7 stats that were in line with forecasts in the week.
Looking at the numbers, 23 of the stats reflected an upward trend from previous figures. Of the remaining 30 stats, 25 reflected a deterioration from previous.
For the Greenback, it was back into the green to mark a 3rd weekly gain in 4-weeks. In the week ending 19th March, the Dollar Spot Index rose by 0.26% to 91.919. In the previous week, the Dollar had fallen by 0.33% to 91.679.
Out of the U.S
It was a busier week on the economic data front.
Key stats included retail sales and industrial production figures in the first half of the week.
The stats were skewed to the negative with retail sales taking a hit in February and industrial production hitting reverse.
On Thursday, jobless claims figures also disappointed, while Philly FED Manufacturing numbers for March impressed.
Initial jobless claims rose from 725k to 770k in the week ending 12th March.
Impressive numbers from Philly softened the blow, with the index surging to a 50-year high 51.8 in March.
While the stats drew plenty of attention, the FED monetary policy decision, press conference, and FOMC projections were the main event.
FED Chair Powell continued to stand by his promise of low for longer, with projections pointing to no likely rate hike until at least 2023.
This was in spite of a forecasted surge in economic growth and a bounce back in inflation.
In the equity markets, the Dow fell by 0.46, with the S&P500 and the NASDAQ declining by 0.77% and by 0.79% respectively.
Out of the UK
It was a particularly quiet week on the economic data front.
There were no material stats to provide the Pound with direction in the week.
On the monetary policy front, however, the BoE delivered a hawkish economic outlook.
While there were no dissents amongst MPC members, an optimistic economic outlook could mean that the BoE may well avoid negative rates. At least for now…
In the week, the Pound fell by 0.37% to end the week at $1.3872. In the week prior, the Pound had risen by 0.60% to $1.3924.
The FTSE100 ended the week down by 0.78%, partially reversing a 1.97% gain from the previous week.
Out of the Eurozone
It was a relatively busy week on the economic data front, with the German and Eurozone economies back in focus.
Early in the week, ZEW Economic Sentiment figures for Germany and the Eurozone drew attention.
Germany’s Economic Sentiment Index rose from 71.2 to 76.6, with the Eurozone’s climbing from 69.6 to 74.0.
Wage growth figures for the Eurozone were also positive for the EUR, while trade data disappointed.
In January, the Eurozone’s trade surplus narrowed from €29.2bn to just €6.3bn.
At the end of the week, German wholesale inflation figures delivered some support.
Other stats in the week included finalized inflation figures for France, Italy, and the Eurozone. These had a muted impact on the EUR and the European majors, however.
For the week, the EUR fell by 0.41% to $1.1904. In the week prior, the EUR had risen by 0.32% to $1.1953.
For the European major indexes, it was mixed week.
The CAC40 fell by 0.80%, while the DAX30 and EuroStoxx600 ended the week gains of 0.82% and 0.06% respectively.
For the Loonie
It was a relatively quiet week.
Key stats included February inflation and January retail sales figures.
The stats were skewed to the negative, with inflationary pressures softening and retail sales falling once more.
Other stats in the week included housing starts and manufacturing sales figures. These had a muted impact on the Loonie, however.
In the week ending 19th March, the Loonie fell by 0.20% to C$1.2500. In the week prior, the Loonie had rallied by 1.45% to C$1.2465.
In the week ending 19th March, the Aussie Dollar fell by 0.28% to $0.7742, with the Kiwi Dollar ending the week down by 0.15% to $0.7165.
For the Aussie Dollar
It was another quiet week.
February employment and prelim retail sales figures were in focus through the second half of the week.
It was a mixed bag for the Aussie Dollar. While employment figures impressed, retail sales figures disappointed.
Full employment rose by 89.1k, leading to a fall in the unemployment rate to 5.8%.
While labor market conditions improved, retail sales fell by 1.1% in February, according to prelim figures.
With consumption key to the economic recovery, the weak numbers pinned the Aussie Dollar back on Friday.
On the monetary policy front, the RBA meeting minutes were also in focus. While members were more optimistic about the economic recovery, there was no talk of a shift in policy.
Based on member outlooks, the minutes pointed to a hold on policy until 2024.
For the Kiwi Dollar
It was a particularly quiet week.
4th quarter GDP numbers were in focus in the 2nd half of the week.
The New Zealand economy contracted by 1% in the 4th quarter. After having rebounded by 13.9% in the 3rd quarter, a lack of international tourists weighed on the economy in the final quarter of 2020.
In spite of the disappointing numbers, impressive stats from China delivered support in the week.
For the Japanese Yen
It was a busier week.
February trade data drew interest on Wednesday ahead of February inflation figures on Friday.
The stats were positive for the Japan economy.
Deflationary pressures eased in February, with Japan’s trade balance rising from a ¥325.4bn deficit to a ¥217.4bn surplus.
On the monetary policy front, the BoJ was also in action on Friday. After having avoided the need to drop rates deeper into negative territory, the Bank of Japan removed language relating to its ¥6tn average equity purchases from the policy statement.
The Bank also said that it would permit more shifts in 10-year yields
While a number of central banks are looking to avoid taper tantrums, there was no major reaction to the BoJ shift. On the day, the Japanese Yen rose by just 0.01%.
The Japanese Yen rose by 0.14% to ¥108.88 against the U.S Dollar. In the week prior, the Yen had fallen by 0.66% to ¥109.03.
Out of China
It was a busier week on the data front.
Industrial production, fixed asset investment, retail sales, and unemployment figures for February were in focus.
The stats were impressive, delivering support to riskier assets in the week.
Industrial production jumped by 35.1%, with fixed asset investments surging by 35.0% year-on-year.
Retail sales figures were as impressive, rising by 33.8% year-on-year.
The only blemish was the unemployment rate, which ticked up from 5.2% to 5.5%.
In the week ending 19th March, the Chinese Yuan fell by 0.01% to CNY6.5090. In the week prior, the Yuan had fallen by 0.18% to CNY6.5084.
The CSI300 fell by 2.71%, while the Hang Seng ending the week up by 0.87%.