- US February retail sales +0.6% vs +0.8% expected
- US February PPI +1.6% y/y vs +1.1% expected
- US initial jobless claims 209K vs 218K estimate
- Canada manufacturing sales for January 0.2% versus 0.4% estimate
- BOJ arranging to end negative interest rate policy next week - report
- ECB's De Guindos: In June we will have sufficient info to take decision on rates
- Atlanta Fed Q1 GDPNow +2.3% vs +2.5% prior
- Earthquake reported in Japan, government shares warning for Fukushima
- US January business inventories 0.0% vs +0.2% expected
- ECB's Knot: Expects ECB cuts in June, then most likely in Sept and Dec
Markets:
- Gold down $11 to $2162
- WTI crude oil up $1.40 to $81.11 -- highs of the year
- S&P 500 down 0.3%
- US 10-year yields up 9.8 bps to 4.29%
- USD leads, AUD lags
The market decided to look past economic data today and look towards next week's Fed meeting. Bonds took the lead as they sold off, likely on speculation that the Fed will move the median dots to 50 bps this year from 75 bps. In addition, there is growing evidence that the Bank of Japan will end negative rates and other portions of its extraordinary programs.
The result was that the dollar rallied despite a softer retail sales report. Some pointed to hotter PPI and a decent jobless claims report as catalysts as well, and that's fair.
The dollar bid was choppy immediately after the data but ultimately the buyers made a big dent, with gains around 50 pips in a relatively uniform move.
Tomorrow we get another look at the US consumer with the UMich consumer sentiment report but after the market ignored retail sales, it's tough to imagine it will matter.
