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With most of Europe on extended Easter break, and little in the way of U.S. data to move markets, FX trade was very light on Monday in N.Y. The dollar managed modest gains versus the European major currencies, though ranges were very narrow. EUR-USD managed a 1.3787 to 1.3822 band, while USD-JPY was stuck between 102.54 and 102.68. Read more
This week, I want to depart from my standard method of presenting the big country by country economic numbers and instead focus on one of the biggest problems facing the developed world right now: potential deflation. Because while a period of prolonged deflation might seem like a good thing, it's actually a very dangerous economic event as it can create a "deflationary spiral" where the following facts occur: consumers start to delay purchases believing that prices will at least remain stable for an extended period of time. Read more
Monthly data for March reported in the last week was mixed. Housing permits were positive, and starts were positive m/m but negative YoY. Industrial production increased strongly, as did retail sales. NY manufacturing decelerated, but Philly manufacturing accelerated. Read more
Lower than expected jobless claims and a firmer Philly Fed index supported the dollar in light Thursday N.Y. trade. Yields edged up as well, though Wall Street struggled to move higher. After opening near 1.3860, EUR-USD slipped to lows under 1.3820 before steadying. Read more
One of the things I frequently point out in my "Weekly Indicator" columns is that the high frequency weekly data will show a change in the trend well before it shows up in the monthly reports. Since about mid-March I've been noting is that there has been a "spring spring" in the weekly data. Read more
Yesterday, Fed Chair Yellen gave a speech in which she highlights three big questions for the Fed, the second of which is "Is Inflation Moving Back to the Fed's 2% Target?" That got me thinking about inflation in general. Read more
The dollar maintained a generally soft tone following Yellen's dovish speech yesterday. Trade was quiet in Europe with some countries already off for the long Easter weekend. EUR-USD rose to a new high for the week of 1.3864. Cable, already underpinned following yesterday's stellar labour market data, edged out a fresh five-year high of 1.6842. Read more
The USD was mostly lower in Asia following a dovish speech by Fed boss Yellen, though movements were pretty contained. EUR-USD rose to the 1.3840 area from the low 1.38s, but the market lacked the muster for a test of yesterday's peak of 1.3851. Cable punched above its Feb-17 major trend peak at 1.6822 and logged a fresh cycle high of 1.6837. Read more
With the exception of a few flurries of activity, FX trade was fairly quiet in N.Y. on Wednesday. The BoC left rates alone as expected, though was dovish sounding enough to get USD-CAD over 1.10 again. Stronger U.S. production data helped the dollar to a degree, but major pairings were largely mired inside of tight trading bands. Read more
Today we learned that EU inflation has dropped again. Eurostat announceed: Euro area1 annual inflation was 0.5% in March 20142, down from 0.7% in February. A year earlier the rate was 1.7%. Monthly inflation was 0.9% in March 2014. European Union3 annual inflation was 0.6% in March 2014, down from 0.8% in February. Read more
