Strong US data overnight appears to have fed into an Asia session USD bid into the weekend. Some currencies have bucked the trend though including IDR and TWD. As a reminder, US retail sales and jobless claims beat by some margin, with the former aided by stimulus checks and the latter potentially boosted by resilient vaccination trends. Looking ahead, U. Michigan sentiment due today should echo resilience in data yesterday.
Elsewhere on the data front, China Q1 GDP came in mostly in line with expectations though retail sales posted a strong beat. CNH FX ignored data though, instead internalising the broader USD bid too, while also remaining capped by local idiosyncratic concerns. Looking ahead, it should be a fairly quiet session with no major data of note in G10 or EM, apart from central bank speak in USD and GBP.
RBC Capital Markets
Day ahead: The main data releases today include Eurozone trade balance, Eurozone final CPI, Canada housing starts, and US housing starts. CAD: March housing starts data is expected to show that starts remained elevated at 250K annualised in March (cons. 255K) versus 245.9K in February. Continued strength in the home re-sale market and very elevated permit issuance of late suggest that they will stay firm in the near term. February wholesale sales are expected to decline 0.4%m/m after increasing 4.0% in the previous month. USD/CAD features support at 1.2502, with 1.2576 serving as resistance.
US bond yields continue to slide, despite the positive surprises in US retail sales and jobless claims overnight. Some cite a combination of a short squeeze in and foreign demand for US Treasuries. Just as the US dollar rose with yields in the first quarter, it has fallen with them this month. Meanwhile, we are awaiting the US Treasury’s FX report, with news reports suggesting Thailand and/or Taiwan being added to the list alongside Vietnam and Switzerland.
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