Leading Economic Index Signals Optimism

Tim Quinlan Wells Fargo

The Leading Economic Index (LEI) continued its upward trend in March, increasing 0.4 percent on the month. Strength in ISM new orders and the interest rate spread components continue to help boost the index.

Another Record High Notched

The LEI increased 0.4 percent in March, its seventh consecutive month recording a gain. Six of the components added to the topline figure, while two subtracted from it.
The labor market, which has recently been viewed in a positive light, contributed negatively to the index. Manufacturing hours worked and initial jobless claims subtracted 0.13 percentage points and 0.09 percentage points from the topline figure.

Animal Spirits Unleashed

Optimistic consumer expectations added 0.12 percentage points to the topline figure, its largest contribution since Dec. 2004.
The interest rate spread component was the largest contributor to the index in March, adding 0.19 percentage points. ISM new orders and the housing permits components also added 0.19 and 0.11 percentage points, respectively. The LEI’s upward trend continues to signal moderate economic growth in 2017.

Download the full report

Author

Tim Quinlan

Wells Fargo

Tim Quinlan is an economist for Wells Fargo. Based in Charlotte, N.C., he provides analysis and commentary on U.S. business spending as well as macroeconomic developments in foreign economies.

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.