Next 24 hours: Will today's batch of US data shake things up?
Today’s report: Investors keep downplaying US inflation data
The market is doing its very best to try and ignore this week’s hotter US inflation data. But as the week marches on inability for US equities to extend their run of record gains could be making investors a little more unsettled.
Wake-up call
- ECB Villeroy
- still struggling
- BOJ Ueda
- Positioning begins
- commodities rally
- visitor arrivals
- policy outlook
- Macro themes
Peformance chart: 30-Day Performance vs. US dollar (%)
Suggested reading
- How the Federal Government Spends $6.7 Trillion, C. Edwards, Cato Institute (March 12, 2024)
- Britain’s Windfall Tax Is a Light Breeze, Fisher Investments (March 7, 2024)
Chart talk: Technical & fundamental highlights
Choose pair:
EURUSD – technical overview
The Euro has been in a multi-month consolidation since bottoming out in 2022. Setbacks have since been exceptionally well supported on dips below 1.0500, with a higher platform sought out ahead of the next major upside extension. Look for a push through the 2023 high at 1.1276 to strengthen the constructive outlook and extend the recovery run towards 1.2000. Only back below 1.0400 negates.EURUSD – fundamental overview
ECB Villeroy is making headlines after falling into line with most of the ECB speak we've been hearing which is that a rate hike is most likely to be occur in June, rather than April. Key standouts on Thursday’s calendar come from Canada manufacturing sales, US producer prices, initial jobless claims, and retail sales.EURUSD - Technical charts in detail
GBPUSD – technical overview
Signs have emerged of the market wanting to put in a longer-term base after collapsing to a record low in September 2022. The latest push to a fresh 2024 high beyond 1.2830 confirms the outlook and opens the door for the next major upside extension towards the 2023 high at 1.3143. Any setbacks should now be well supported ahead of 1.2500.GBPUSD – fundamental overview
The Pound didn't do much at all with Wednesday's UK GDP data which came in mostly in line with expectation. The key focus was more about data from a day earlier which produced discouraging employment readings including higher unemployment and softer wages. Key standouts on Thursday’s calendar come from Canada manufacturing sales, US producer prices, initial jobless claims, and retail sales.USDJPY – technical overview
The market remains confined to a strong uptrend, with sights set on a retest and break of the multi-year high from 2022 at 151.95. A push through this level will open the next major upside extension towards 155.00. Key support comes in at 145.90, with only a weekly close below to delay the constructive outlook.USDJPY – fundamental overview
The round of healthy Yen demand appears to be fading, with the market getting back to the reality that ultimately, the BOJ may do nothing, despite calls for the central bank to be exiting negative interest rate policy. We have been seeing signs of wages on the rise, and yet, BOJ Ueda hasn't done anything to suggest a policy shift is on the horizon. Key standouts on Thursday’s calendar come from Canada manufacturing sales, US producer prices, initial jobless claims, and retail sales.AUDUSD – technical overview
There are signs of the potential formation of a longer-term base with the market trading down into a meaningful longer-term support zone. Only a monthly close below 0.6200 would give reason for rethink. Back above 0.6900 will take the big picture pressure off the downside and strengthen case for a bottom.AUDUSD – fundamental overview
We've been seeing more Aussie selling into rallies, with market participants worrying about a potential top in US equities while also worrying about a more dovish leaning RBA decision next week. Key standouts on Thursday’s calendar come from Canada manufacturing sales, US producer prices, initial jobless claims, and retail sales.USDCAD – technical overview
Above 1.3000 signals an end to a period of longer-term bearish consolidation and suggests the market is in the process of carving out a more significant longer-term base. Next key resistance now comes in up into the 1.4000 area. Setbacks should be very well supported down into the 1.3000 area.USDCAD – fundamental overview
Firmer commodities prices on Wednesday were behind most of the minor wave of demand we had seen in the Canadian Dollar. Key standouts on Thursday’s calendar come from Canada manufacturing sales, US producer prices, initial jobless claims, and retail sales.NZDUSD – technical overview
Overall pressure remains on the downside with the market continuing to stall out on runs up into the 0.6500 area. At the same time, there are some signs of the market wanting to put in a longer-term base. Ultimately, a break back above 0.6500 would be required to take the medium-term pressure off the downside and encourage this prospect. A monthly close below 0.5800 will intensify bearish price action.NZDUSD – fundamental overview
Earlier today, New Zealand visitor arrivals rose 21.7% year on year versus 14.8% previous. The data was well received but hasn't had much impact on price action. Key standouts on Thursday’s calendar come from Canada manufacturing sales, US producer prices, initial jobless claims, and retail sales.US SPX 500 – technical overview
Longer-term technical studies continue to look quite extended after pushing to fresh record highs, begging for a deeper correction ahead. Look for rallies to be well capped in favor of lower tops and lower lows. A monthly close above 5100 will be required to delay the outlook. Next key support comes in at 4842.US SPX 500 – fundamental overview
Though we have seen an adjustment of investor expectations towards the amount of rate cuts in 2024, the market still believes policy will end up erring more towards the investor friendly, accommodative side of things. This bet has kept stocks well bid and pushing record highs. Still, it's important to highlight the fact that the Fed has yet to declare a victory over inflation and could disappoint investors with less accommodative policy than desired going forward. If this happens, stocks could be in for a nasty bearish reversal.GOLD (SPOT) – technical overview
The 2019 breakout above the 2016 high at 1375 was a significant development, opening the door for fresh record highs. Setbacks should now be well supported above 1900 on a monthly close basis ahead of the next major upside extension towards 2500.GOLD (SPOT) – fundamental overview
The yellow metal continues to be well supported on dips with solid demand from medium and longer-term accounts. These players are more concerned about inflation risk and a less stable and upbeat global growth outlook. All of this should keep the commodity well supported, with many market participants also fleeing to the hard asset as the grand dichotomy of record high equities and record low yields comes to an end.