Forex Analysis for Wednesday 22nd March 2017
Tuesday: UK CPI beat expectations and exceeded the BoE’s 2% mandate by printing at 2.3% vs 2.1%. CAD Core and Headline Retail Sales beat expectations (1.7% vs 1.3% and 2.2% vs 1.5% respectively). BoJ minutes from January 30th-31st meeting stated that Japan’s economy continues its moderate recovery trend and that most members agreed that price momentum is not firm yet. The minutes stated that exports picked up led by auto-related exports and that industrial production picked up reflecting moderate increase in demand at home and abroad, while 1 member suggested the BoJ should accommodate rising yields. (Newswires)
A mini correction takes place in global equities led my financials and commodity shares as there is concern that Trump will not or cannot follow through on his reflationary policies. Failure to vote through Trump’s healthcare reforms tomorrow will rob him of the cash needed to spend on the promised tax cuts and infrastructure spending. The S&P fell more than 1% for the first time in 5 months. The USD is down, the 10-year treasury yield drops, gold is up and oil is down, all as expected when we move risk off. The JPY strengthens on safe-haven flow; EUR and GBP consolidate and the commodity currencies, CAD, AUD and NZD, all drop.
Today we have NZD Rate Statement.
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