- It was a risk-on ending to last week's trade following an improvement in China’s data sending yields on the rise and equities up while the greenback climbed back towards the 97 handle in the DXY having lost its footing in the prior sessions.
FX traded within familiar ranges. The euro was trading to a two-week high through 1.1320, ending North America a touch below 1.13 the figure. The great British pound was lively throughout the sessions but ended New York on the back foot hitting a low of 1.3064 falling from the 1.3130s in early trade. USD/JPY was making a base on the 112 as risk appetite drove back the yen from the 111.70s. As for yields, the US 10-yr note was up 6.8bps to 2.565%. Stock markets were encouraged by the growth and policy backdrop with the S&P 500 up 0.7%.
U.S. data
- U.S. import prices climbed 0.6% m/m in March (from 1.0% m/m in the month prior), while export prices also rose by 0.7% m/m.
- The University of Michigan’s preliminary sentiment index fell to 96.9 for April (from 98.4 in the month prior).
- 5-10 year inflation expectations also fell in April, to 2.3% from 2.5% in March while 1-year expectations also dipped slightly, arriving at 2.4% - (Firming a neutral bias at the Fed).
Antipodes get a boost from China
Risk appetite was a key driver for the Aussie and kiwi at the end of the week following China’s monetary data which was better than expected in March as the stimulatory measure are flowing into lending and credit metrics, as noted by analysts at ANZ Bank:
"New Yuan Loans rose to Y1690bn (against an estimate of Y1250bn), while Aggregate Financing was up Y2860bn (beating expectations of Y1850bn). M2 money growth rose to 8.6% (from 8.0% in the month prior), while March exports were up 14.2% y/y after falling by 20.8% in the month prior. The improvements in credit data mitigated some of the anxiety around China’s 7.6% y/y drop in imports for March."
While we now await China’s retail sales and GDP this week, AUD/USD made a one-month high into the 0.7190s, ending the New York session a in the 0.7170s while the Kiwi moved up to the 0.6780s ending the sessions 20 pips lower as traders look ahead to this week's NZ CPI.
Key notes from Friday and the weekend
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.