The NY session witnessed rather lackluster price action as the holiday-shortened weak continues to see lower than usual volume. Economic data was mostly second-tier and mostly ignored. Canada housing starts printed a better than expected 154.7K jump in March after a 136.1K increase the prior month. Meanwhile, US wholesale inventories contracted a sharper than forecast -1.5% in February after slipping -0.9% previously. The market shrugged it off and after a rollercoaster day equities managed to close up +1.2%. The S&P tested daily trendline support which lurks by 815/816 but managed to close well above there. Look for a break below this level in the near future to open up potential for a sharp correction lower.

EUR/USD added just over 50 pips and was sitting near 1.3270 ahead of the NY close. The 1.3290 level is shaping up to be important in the short term here as this is where the top of the hourly channel and the 55hr SMA come in. There are likely stops lurking just above 1.33 as well so expect this area to be a likely trigger for any move higher. The yen crosses were mixed with USD/JPY shedding a modest -15 pips to 99.70/80 while EUR/JPY rose 35 points into the 132.30/40 area. Oil whipped around from $48 to $51 and back down and this had AUD and CAD trapped in a range. AUD/USD closed up about 40 pips near 0.7100 while USD/CAD dropped a modest -20 pips into the 1.2360 zone. Look for Australian employment to get AUD moving now in the upcoming Asia session.

The Fed minutes were also out and elicited some minor movement as they noted weak demand for TALF funding. This lack of private sector participation is also likely playing out in the PPIP plan as well and looks to be behind the move to extend the application deadline to later this month – just ahead of the banks' stress test completion. The lack of interest from the private sector to borrow from the Fed or to purchase banks' toxic assets at a discount could be a catalyst for lower equities and in-turn lower yen crosses in the days ahead. If bank earnings disappoint next week, it will only exacerbate the move.

Upcoming Economic Data Releases (Asia Session) prior  expected

  • 4/8 23:50 GMT JN  Machine Orders (MoM)  FEB  -3.20%  -7.00%
  • 4/8 23:50 GMT JN  Machine Orders YOY%  FEB  -39.50%  -36.70%
  • 4/9 1:00 GMT AU  Consumer Inflation Expectation  APR  2.20%  - -
  • 4/9 1:30 GMT AU  Employment Change  MAR  1.8K  -25.0K
  • 4/9 1:30 GMT AU  Full Time Employment Change  MAR  -53.8  -10
  • 4/9 1:30 GMT AU  Part Time Employment Change  MAR  55.6  -20
  • 4/9 1:30 GMT AU  Unemployment Rate  MAR  5.20%  5.40%
  • 4/9 1:30 GMT AU  Participation Rate  MAR  65.50%  65.40%