The NY session was a classic chopfest in FX as positioning ahead of the ECB rate decision saw overall sideways consolidation for most of the majors. Equities caught a nice bid on the back of better than expected US economic data. The S&P closed up +1.7% after dipping nearly -2.0% in early trading.
ISM manufacturing was the highlight and it came in a better than expected 36.3 in March from 35.8 the prior month. The jump in the new orders component to back above 40 was the big bright spot here. Pending home sales also printed a +2.1% jump in February and this was better than anticipated and up from the dismal -7.7% plunge prior. While it doesn't point to any major upside to sales, it does suggest that we could be trying to carve out a bottom here at the current lowly levels. Last but not least was the auto sales data, which also surprised higher. Sales are tracking a 9.8M unit annual rate for March after a horrid 9.1M result in February.
EUR/USD was relatively unchanged from the NY open near 1.3240/50 after trading in a 90 pip range. Positioning ahead of the ECB meeting looks to be behind this. The latest hourly consolidation in EUR/USD can be approached in a couple of ways – as a pennant consolidation or a symmetric triangle consolidation. The former would project EUR/USD down to 1.2700 eventually, while the latter points to a more modest correction to 1.3000/1.2970. The break level comes in by 1.3180 for both patterns.
The yen crosses also consolidated a touch lower despite the upbeat stock market performance. USD/JPY shed -20 pips to 98.50/60 while EUR/JPY lost -30 points into the 130.30/40 area. With US nonfarm payrolls due up on Friday, the yen crosses could consolidate further in the next few sessions. Weakness in the yen crosses on a weaker than expected NFP report could offer up some decent buying opportunities, however.
Upcoming Economic Data Releases (Asia Session) prior expected
4/1 23:50 GMT JN Monetary Base (YoY) MAR 6.40% - -
4/1 23:50 GMT JN Foreign Buying Japan Bonds 27-Mar ¥511.9B - -
4/1 23:50 GMT JN Foreign Buying Japan Stocks 27-Apr - - - -
4/1 23:50 GMT JN Japan Buying Foreign Stocks 27-Mar ¥6.1B - -
4/1 23:50 GMT JN Japan Buying Foreign Bonds 27-Mar ¥247.2B - -
4/2 0:30 GMT AU Trade Balance FEB 970M 700M
4/2 2:00 GMT NZ ANZ Commodity Price MAR -4.60% - -
4/2 2:00 GMT NZ Commodity Price Index for March 2-Apr
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