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Monthly data for May started with a positive Chicago PMI, and April data included positive durable goods. House prices continued to rise. Pending home sales rose slightly. Conference Board and Michigan sentiment were both neutral. Personal income rose, but personal spending declined, meaning that the personal savings rate rose. Read more
The news this week was actually pretty morose. Neither the UK for Australia printed any meaningful numbers. Both Canada and the US reported weak 1Q GDP, indicating that the continent wide adverse winter weather was probably the primary culprit. Read more
Month-end and a Friday combined to keep FX trade very light on Friday. Profit taking helped lift EUR-USD from near 1.3600 through buy stops over 1.3640. The pairing eventually peaked at 1.3650. USD-JPY was steady between 101.65 and 101.85, while USD-CAD perked up on Canada's GDP miss. Read more
Yesterday's -1% reading for 1Q US GDP growth has created concern that the economy may be entering a perod of slower growth. There are several reasons this concern is unfounded. Read more
The dollar traded mostly softer during the Asian and European AM sessions with yesterday's U.S. GDP miss and lower Treasury yields having taken the shine out of the greenback. The euro also exhibited signs of being less sensitive to bearish leads. EUR-USD established a foothold above 1.3600 after briefly dipping just below here in Asia and again in early London trade, even though the market had excuse to take the euro lower on an unexpected drop in German retail sales, and sub-forecast Spanish HICP and Italian PPI numbers. Read more
The yen firmed moderately following Japanese data, which was headlined by April inflation figures that produced the expected jump in CPI to 3.4% y/y from 1.6% in March. The spike was caused by the three percentage point rise in the sales tax in April, which will have a base effect on y/y data through to March next year. Read more
The dollar was mostly easier in N.Y. trade on Thursday, as Treasury yields fell further into month-end, and as U.S. Q1 GDP was revised sharply into negative territory. On the positive side, jobless claims were lower than expected. EUR-USD found some resistance over 1.3620 following its brief foray under 1.3600, as USD-JPY saw buyers return into 101.40. Read more
Along with the downward revision to Q1 GDP, which confirms for the upteenth time that most of the US had an unusually severe winter, the preliminary estimate for Q1 corporate profits was released. Corporate profits, particularly as adjusted by unit labor costs, are a long leading indicator for the economy, They typically decline by at least one year before the overall economy does, and sometimes make their high near mid-cycle. Unsurprisingly, given the rest of the GDP report, Q1 corporate profits, both unadjusted and as adjusted by unit labor costs, declined. Read more
The dollar was generally softer following the 7 bp drop in the 10-year T-note yield yesterday, which declined by a further 1 bp in overnight trade. EUR-USD briefly interrupted this theme by dropping to a fresh three-month low of 1.3586 during the early London AM, but the pair subsequently rebounded by nearly 40 pips to levels around 1.3620. Read more
The dollar softened moderately since the London close yesterday. The drop in the U.S. yields to near year-to-date lows weighed on the greenback generally. An AUD-USD rally led the way as the pair rose to a nine-day peak of 0.9301, up just over 100 pips from the lows. Read more
