Intraday Market Thoughts

US Jitters & Awaiting BoJ

by Adam Button
Apr 4, 2013 0:06

Signs of a softer US economy weighed on the dollar on Wednesday while the yen was the best performer on speculation the Bank of Japan lacks ammunition for today's decision. Australian retail sales are the other main event on the calendar. We added 2 new Premium trades on USDCAD, gold, silver and oil as the weekly Death Cross deepens in gold, oil loses over 200 points and CAD firms ahead of Canada jobs report. The existing Dual trades on EURUSD await Thursday's ECB decision. Tonight's oil trades were also dual in natures as the daily plunge remains insufficient to overturn monthlies. All the trades are in the latest Premium Insights.

The details of the ISM data were also soft as employment fell to the lowest since November. That component and the ADP numbers had economists shifting non-farm payrolls forecasts toward 160K from 200K.

The US dollar weakened across the board in US trading as the market loses confidence the Fed will taper purchases. Interesting comments, however, came from the Fed's Williams who said the Fed could begin to taper 'by summer' if the economy grows as forecast.

At 0030 GMT, Australia releases retail sales for and building approvals for February. Approvals are expected up 2.5% in the month while sales are forecast to rise 0.3%. Retail sales are easily the more important indicator and could push the RBA toward a more neutral stance but there is plenty of data before the next meeting.

The main event of the day is the BOJ decision, which generally comes around 0330 GMT. The BOJ is expected to add about 15 trillion yen in annual asset purchases (to 80T) but it's Kuroda's first meeting and me may wish to shake up the market with a more aggressive program.

Either way, look for big moves in the yen.

Act Exp Prev GMT
Retail Sales (FEB) (m/m)
0.3% 0.9% Apr 04 0:30
ADP Employment Change
158K 200K 237K Apr 03 12:15
Building Approvals (FEB) (m/m)
2.4% -2.4% Apr 04 0:30
Building Approvals (FEB) (y/y)
14.3% 9.9% Apr 04 0:30

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