- Markets are trading cautiously prior to the first round of the French presidential elections and concerns over North Korea.
- The Fed's Beige Book reported modest-to-moderate growth across its 12 districts. Wages are rising but not necessarily increasing inflation.
- Fed Vice Chair Stanley Fischer said yesterday that foreign economies are in better shape to absorb tighter US monetary policy now.
- Dallas Fed President Robert Kaplan said that three interest rate increases remain possible this year depending on the economy’s development.
- The Philadelphia Fed manufacturing index fell for a second month and by more than expected to 22.0 in April.
- Consumer price inflation in Brazil slowed more than expected last month, rising only 4.41% versus a year ago, giving room for the central bank to continue cutting interest rates.
Japan's March trade data showed an impressive 12% annual growth in exports - the biggest gain in over two years and adding to evidence that global demand is increasing. As a result, the trade surplus narrowed less than expected to 614 billion Yen. Sentiment at manufacturers rose for an eighth month in April to its highest since 2007.
The US Dollar index is down 0.2% today as the latest data from the US does little to change recent views that the economy is growing only modestly, despite optimism over Trump's pro-growth agenda. Without fresh and upbeat economic data to reignite June rate hike expectations, the Dollar looks set to drift a bit lower for now.
The Pound appears to have stabilized around the 1.28 area against the Dollar. This follows Tuesday's almost 4% gain on expectations that a general election will boost the UK's Brexit negotiating hand. The latest YouGov poll for The Times gave the Conservatives 48% of the vote compared with 24% for the opposition Labour party, supporting expectations that May's Conservative would return with an increased majority.
The Euro is higher on the day against a broadly weaker Dollar despite the fast approaching French election. ECB officials have once again been stressing that it is too early to consider even a gradual tightening of monetary policy as the growth and inflation outlook remain soft.
The Canadian Dollar is effectively flat on the day, but is close to the lower end of its six-month range versus the US Dollar, with low oil prices continuing to dominate.
The Aussie Dollar is down over 0.5% on the day after the RBA minutes noted the need for "careful monitoring" of the labor and housing markets. The most recent employment data showed an impressive 60,000 jobs added last month while unemployment remained at its highest level in a year. At the same time, low interest rates have helped fuel a housing boom where prices in Sydney are rising almost 20% annually.
The New Zealand Dollar rose over 0.5% today after inflation accelerated more than expected in the first quarter, rising 2.2% versus a year previous - the fastest pace in five years. That was almost double the pace in the fourth quarter of 2016 and may prompt the RBNZ to assess its forward guidance of rates remaining at their record low well into next year.