A Slow Start to the Year

Wells Fargo Research Team Wells Fargo

U.S. Review

A Slow Start to the Year

Consumer spending was soft again in February, rising just 0.1 percent for the month while personal income growth remained robust, rising 0.4 percent.
Consumer confidence data for the month of March continued to indicate that consumers are feeling more optimistic with the current and future economic environment.
Real GDP growth for Q4 was revised up slightly to 2.1 percent from 1.9 percent.
Inflation, as measured by the PCE Deflator, edged up to 2.1 percent on a year-over-year basis in February.

Global Review

Mexico’s Central Bank Raises Rates Again

Economic activity in Mexico accelerated in January, up 2.96 percent year over year, besting market expectations of slower growth. Mexico’s central bank increased its overnight bank rate to 6.50 percent at its most recent meeting.
Inflation in Japan rose for the second consecutive month and retail sales are seeing meager gains as stagnant wage growth and higher energy prices weigh on personal consumption.
As largely expected, Prime Minister May pulled the trigger on Article 50, starting the two-year legal process between the U.K. and the EU to sever its 44-year relationship.

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Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.