Forex news for North American trading on March 31, 2021:
- ADP employment change 517K vs 550K estimate
- Canada GDP for January 0.7% vs. 0.5% estimate
- US February pending home sales -10.6% vs -3.0% m/m expected
- France to start four-week national lockdown on Saturday
- McConnell says not likely to support infrastructure due to national debt
- US weekly oil inventories -876K vs -1500K expected
- ECB's Villeroy laments the slow rollout of EU recovery fund
- Canada industrial product prices for February 2.6% vs. 2.5% estimate
Markets:
- Gold up $23 to $1708
- US 10-year yields up 2.5 bps to 1.73%
- S&P 500 up 22 points to 3980
- WTI crude down $1.37 to $59.21
- CAD leads, JPY lags on the day
- CAD leads, JPY lags on the quarter
- CAD leads, NZD lags on the month
Today's trading was another example of why trading at quarter-end is a bad idea. The moves were sharp and without any real catalysts right across the FX market.
The dollar was sold heavily early in New York trading, in particular against the Canadian dollar and the pound. But by the time the fix rolled around, much of it had reversed. There were 30-40 pip round trips on a bunch of fronts and the correlation with other markets was minimal.
The ADP data didn't cause much of a ripple and the poor pending home sales number was shrugged off on inventory and weather concerns. The one headline that seemed to have an effect was from OPEC where the JMMC didn't make a recommendation for tomorrow's meeting. That led to some jitters and oil selling but CAD took it in stride.
USD/JPY hit 110.97 in Asia and made a few runs at it afterwards but wasn't able to break 111.00, likely owing to some barriers.
Cable briefly rose above 1.3800 but couldn't keep up the momentum and slipped back to 1.3785 to cap a good quarter. All eyes will be on 1.40 and the Q1 high of 1.4242 in the three months ahead.
