EURUSD, 240 mins
The 0.6% US March industrial production drop was weaker than expected, following small net-downward revisions that left a 0.6% (was 0.5%) February decline after a 0.5% (was 0.6%) January pop. We now have declines in 13 of the last 16 months that leave a 3.1% drop from the expansion-high in November of 2014. We saw a 2.2% contraction rate for industrial production in Q1 after a 3.3% (was 3.2%) rate of decline in Q4 that leaves declines in four of the last five quarters. Factory output has underperformed GDP since the November 2014 peak for factory output, given a 1.7% average contraction rate for industrial production over the five quarters ending in Q1, versus an average GDP growth rate of 1.7%. We expect a 1.0% contraction rate for industrial production in 2016 alongside a 1.8% growth rate for GDP.
US consumer sentiment slid to 89.7 in the preliminary April print from the University of Michigan survey, worse than expected. It had dipped 0.7 points to 91.0 in March and has faded from the 98.1 cycle high set back in January 2015 (which was also the strongest since January 2004). It’s the first sub-90 headline reading since September. Most of the weakness was in the expectations component, which dropped to 79.6 from 81.5. The current conditions index dipped to 105.4 from 105.6. The 12-month inflation gauge was steady at 2.7%, while the 5-year index slowed to 2.5% from 2.7%
The EURUSD broke out of the tight range it had been trading in for the last 24 hours, trading back over 1.1300 following the data releases.
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