Macro Events & News

FX News Today

European Outlook: The global stock market recovery run out of steam in Asia, with bourses mixed. Chinese equities retreated and Japan managed only slight gains as oil prices retreated. The front end WTI future fell towards USD 40 per barrel, after Kuwait workers said they would end the strike that has disrupted output. A stronger Yen weighed on Japanese markets and US and UK stock futures are also down, indicating that bond futures could recover some of their recent losses in Europe. The calendar has UK labour market and earnings data and a German Bund sale. Markets will be looking ahead to tomorrow’s ECB meeting, with Draghi seen on hold for an extended period, but hopes of further action down the line remain, even if helicopter money may be too much of a leap. And like ECB officials BoJ Governor Kuroda also played down the idea, citing legal issues.

BoJ Governor Kuroda rejects idea of helicopter money, saying that he isn’t thinking about helicopter money and that the version that tries to inject cash into the economy by permanently monetising fiscal deficits would be blurring the line of fiscal and monetary policy and contradicts the current legal framework. Kuroda told lawmakers that “unless the existing legal framework changes, helicopter money isn’t possible, and we at the Bank of Japan aren’t thinking about it at all”.

German PPI -3.1% In March 2016 the index of producer prices for industrial products fell by 3.1% compared with the corresponding month of the preceding year. In February 2016 the annual rate of change all over had been –3.0%. In March 2016 energy prices decreased by 9.2% compared with March 2015, prices of intermediate goods by 2.3% and prices of non-durable consumer goods by 0.3%. In contrast prices of capital goods rose by 0.6% and prices of durable consumer goods by 1.4%. The overall index disregarding energy decreased by 0.9% compared with March 2015.

BoC Governor Poloz: His opening statement provides a summary of the MPR, as is typically the case in these appearances before the House and Senate. He listed the three negative developments for the growth outlook that have emerged since January, which were more than offset by the fiscal measures put forth in the Federal budget in March. The growth outlook is 1.7% in 2016, 2.3% in 2017 and 2% in 2018, as seen in the MPR. Cautious optimism remains in place: economic data have been “encouraging on balance”, but also “quite variable.” There has not been “concrete evidence of higher investment or strong firm creation.
 
Main Macro Events Today

US Existing Home Sales: March existing home sales data is out later today and should reveal a 4.3% rebound to a 5.300 mln (median 5.236 mln) pace from 5.080 mln in February and 5.470 mln in January. The month’s housing starts release revealed a drop to a 1.089 mln pace from 1.194 mln in February. Secondary measures of housing data were stronger in March with the MBA purchase index up by 4.2% and the NAHB composite holding steady.
Draghi & Poloz: Speeches are scheduled today by the ECB’s Mario Draghi at the ECB Generation Euro competition, in Frankfurt; and the BOC’s Poloz who will continue his testimony to the Finance Committee at the Canadian parliament.