- NY Fed empire manufacturing survey for March -20.90 vs -7.00 estimate
- UMich March prelim consumer sentiment 76.5 vs 76.9 expected
- Canada January wholesale trade +0.1% vs -0.6% expected
- US February industrial production +0.1% vs 0.0% expected
- ECB's Makhlouf: Picture should be sufficiently clear in June
- ECB's Lane: Labor market is softening in many ways
- ECB's Vujcic says prefers 25 bps pace of cuts but weaker economy could speed the pace
- Goldman Sachs raises average gold price forecast for 2024 to $2180 from $2090.
- US February import prices +0.3% vs +0.3% expected
- Canada February housing starts 253K vs 230K expected
Markets:
- Gold down $4 to $2156
- US 10-year yields up 2.3 bps to 4.33%
- WTI crude oil down 28-cents to $80.98
- S&P 500 down 0.6%
- EUR leads, NZD lags
The Ides of March passed without much drama this year as the dollar made gains in Asia and Europe then largely hung onto them in North American trade. The empire survey was soft and UMich was generally in line but neither one left ripples.
The market appears to have been driven by fixed income flows and angst about the BOJ and Fed next week. Those two central banks are headed in opposite directions but you wouldn't know if from USD/JPY, which rose again. That pair appears to be more worried about bond market structural changes from the BOJ than rate differentials. That pushed US 10s to a retest of the highs of the year (but not above). USD/JPY climbed to a high of 149.17 in a 30 pip rally in US trade and is slated to finish near the highs.
Another BOJ leak suggests that a hike is priced in, though I imagine there are still fears about mechanical breaks on the first hike in 17 years.
There was some moderate USD buying elsewhere on higher yields and risk aversion. US equities were hit for the second day with many pointing to quad witching as a driver. Adobe was also beaten up in a sign that AI hype might be flagging.
We look forward to the BOJ and Fed meetings next week. Until then, have a great weekend.
