The US dollar looks set to snap its longest-losing streak in 6 years against the yen and Treasury yields rose on bets that House Republican leaders will muster enough votes later today to pass their health-care bill. Most Asian equities gained, recovering some of this week’s slide amid renewed risk-on sentiment among investors.
- Initial jobless claims for the week ending Mar. 18 rose to 258,000, from 243,000 the week prior, exceeding the 240,000 median estimate. The 4-week moving average edged higher by 1,000 to 240,000.
- New home sales in February accelerated, gaining 6.1% from a month earlier and surpassing the 1.6% increase predicted.
- According to a Bloomberg report, House Republican leaders are expected to vote Friday on their embattled health-care bill, moving on the legislation under pressure by Trump administration officials who voiced urgency during a closed-door meeting on the Capitol. The chamber plans to vote on a revised version of the health-care bill that includes a provision that conservatives negotiated with senior White House officials to remove Obamacare’s requirements that certain essential benefits be covered by insurance, according to some lawmakers and aides.
- The S&P 500 Index fell to a session-low last night after Republican House leadership said there would be no vote Thursday, raising speculation the Trump administration’s pro-growth policies will continue to face hurdles in Congress. The benchmark index declined 0.1%, led by health care and energy stocks, and despite a rally in real estate equities.
- The US dollar was little changed overnight, as the Bloomberg Dollar Spot Index ended its session in New York virtually unchanged. It was a different story this morning in Asia though, as the dollar rallied, driving the Bloomberg Dollar Spot Index 0.2% higher and erasing declines over the past 2 days.
- The benchmark 10yr Treasury yield rose 1bp to 2.42% in New York, and added another earlier this morning to reach a session-high of 2.43%.
- San Francisco Fed President John Williams said that 3 or “maybe even more” interest-rate increases this year make sense, depending on how the Fed is doing on its employment and inflation objectives.
- Minneapolis Fed chief Neel Kashkari said he wants the Fed to make public its plan to shrink the balance sheet as soon as officials reach a consensus on how to proceed, adding that he wants a pause in rate hikes while they wait for market reaction to balance sheet normalization plan.
- Canada’s federal government will issue a record C$142 billion of bonds next fiscal year to finance its growing budget deficit, eclipsing the previous year’s record of C$125 billion.
- The government is picking 6 industrial sectors, led by clean technology, to foster innovation and jobs in an economy that’s been relying on commodities to drive growth. Support will be focused on clean tech, agri-food, digital, advanced manufacturing, bio-sciences and clean resources, according to Prime Minister Justin Trudeau’s second budget released in Ottawa yesterday.
- Retail sales figures in February exceeded expectations; excluding the effects of fuel, retail sales gained 1.3% month-on-month and 4.1% year-on-year, better than the median expectations of 0.3% and 3.2% respectively.
- Gertjan Vlieghe, a member of the BoE’s monetary policy committee, said he would need to see evidence of strong wage growth before he would consider voting for a rate rise, The Times reported, citing an interview.
- Economists surveyed by Bloomberg have upgraded their forecasts for China’s economic growth in each quarter of this year and expect inflation to remain well under the government’s ceiling. They are also projecting the PBOC to keep banks’ reserve requirement ratio unchanged throughout the year, versus a previous forecast for a reduction in the fourth quarter.
- This month’s PMI manufacturing index slipped to 52.6 from 53.3.
- Headline inflation in February rose 0.7% from a year earlier, in line with expectations and quickening from the prior month’s pace of 0.6%. Core inflation, which excludes the cost of accommodation and private road transport, eased to 1.2% year-on-year, from 1.5% prior and slower than the 1.3% pace predicted.
- The slightly higher reading for headline inflation reflects the larger increase in private road transport cost, which rose by 7.1%, higher than the 4.1% rise the previous month. The fall in core inflation mainly reflected lower services and food inflation.
- Analysts from Maybank Kim Eng and UOB are predicting the MAS to tighten monetary policy by seeking appreciation in the Singapore dollar against its trade-weighted basket in October this year.
- Spot gold continues to struggle to stay above the $1,250/Oz handle, retreating back below it for the second straight day, after earlier touching a high of $1,253.28/Oz. The precious metal reversed course, falling 0.4% to $1,242.88/Oz earlier today, but still remains on course for its second straight weekly gain.
- To the upside, the next resistance region to be tested lies around the 200-day moving average of $1,261/Oz. Lower below, the support at $1,220/Oz should hold for the near-term.
- Silver for immediate delivery reversed course as well after reaching a 2-week high of $17.6925/Oz last night, and was 0.4% lower at $17.5470/Oz earlier today.
- Crude oil futures expiring in May look set for a third weekly drop after falling 0.7% to $47.70/bbl in New York last night. Some declines were pared earlier today although futures still remain below the $48/bbl handle.
- US crude output continued to rise along with inventories last week, according to Energy Information Administration data released Wednesday. While OPEC won’t formally decide until May whether to prolong production cuts, officials will meet this weekend in Kuwait to discuss the deal’s progress.
- Spot 1.4017
- USDSGD rose 0.1% to 1.4019 earlier, amid US dollar strength in Asia this morning.
- Following yesterday’s inflation report, Bloomberg Intelligence wrote that inflation and growth in Singapore still remain well below trend while the risks to demand remains significant, suggesting the MAS may leave policy settings unchanged when it meets in April.
- Spot 0.7617
- AUDUSD declined for the third day in a row, sliding 0.3% to 0.7613 earlier today.
- The currency pair has declined more than 1% for the week, largely driven by weakening iron ore prices, which fell more than 7% over the same period.
- The pair may find some near-term support at the 0.7600 level.
- Spot 1.3374
- Overnight crude oil weakness resulted in a weaker Canadian dollar, which fell 0.4% against the greenback to 1.3377.
- The currency pair continues to be bound by its 1.3300 and 1.3400 handles.
- Spot 6.8730
- The PBOC strengthened its daily reference rate slightly to 6.8845 to the dollar, the highest level since Mar. 6, from 6.8856 yesterday.
- Spot 111.29
- USDJPY erased most of its previous session’s decline, rising 0.4% to 111.44 earlier today, rebounding from a 4-month low of 110.63 last night.
- The risk for USDJPY continues to remain to the downside, after the pair closed below the key 111.60 support earlier this week. The currency pair had spent most of the past months within the 111.60 – 115.60 range, and following a breakout of its lower boundary, could fall further to its 200-day moving average of around 108 over the medium term.
- Spot 1.2495
- GBPUSD retreated back below the 1.2500 handle following hawkish comments from the BoE’s Vlieghe, declining 0.3% to 1.2478 earlier today.
- A surge in inflation report by the UK ONS earlier this week saw the pair jump from 1.2340 to 1.2506, however subsequent shift in the market sentiment – from risk-on to risk-off restricted further gains.
- With the 100-day moving average at 1.2400 broken earlier this week, the momentum remains to the upside.