The Weekly Wrap – FED Chair Powell and Economic Data Deliver USD Support

The Stats

It was a quieter week on the economic calendar for the week ending 25^th March.

A total of 43 stats were monitored, following 59 stats in the week prior.

Of the 43 stats, 23 came in ahead of forecasts, with 19 economic indicators coming up short of forecast. 1 stat was in line with the forecast in the week.

Looking at the numbers, 15 of the stats reflected an upward trend from previous figures. Of the remaining 28 stats, 27 reflected a deterioration from previous numbers.

Fed Chair Powell, disappointing stats, and Russia’s ongoing invasion of Ukraine delivered Dollar support in the week. Early in the week, the Fed Chair talked of the willingness to take an aggressive rate path if needed.

Out of the U.S

It was a mixed week on the economic data front. Core durable goods and consumer sentiment were disappointing, while private sector PMI and labor market numbers were upbeat.

According to prelim figures, the U.S Services PMI rose from 56.5 to 58.9, with the manufacturing PMI up from 57.3 to 58.5. In the week ending 18^th March, jobless claims fell back to sub-200k levels, also Dollar positive.

Core durable goods orders fell unexpectedly, however, with consumer sentiment waning in March.

In the week ending 25^th March, the Dollar Spot Index rose by 0.57% to end the week at 98.789. In the week prior, the Index fell by 0.90% to 98.229.

Out of the UK

Inflation, private sector PMIs, and retail sales were the key stats of the week.

It was a mixed bag for the Pound. While inflationary pressures picked up once more, consumer spending fell in February, with rising prices affecting spending.

On the positive, however, was a pickup in service sector activity. In March, the services PMI rose from 60.5 to 61.0.

In the week, the Pound increased by 0.03% to end the week at $1.3182. The Pound rose by 1.08% to $1.3178 in the week prior.

The FTSE100 ended the week up 1.06%, following a 3.48% gain from the previous week.

Out of the Eurozone

Prelim private sector PMI figures for France, Germany, and the Eurozone were in focus on Thursday.

While the PMIs came in ahead of forecasts, private sector activity grew at a slower pace in March. The Eurozone’s composite PMI fell from 55.5 to a 2-month low of 54.5. Weighing on private sector activity was the manufacturing sector. The Eurozone’s manufacturing PMI fell to a 14-month low of 57.0.

On Friday, German business sentiment figures also disappointed, with the manufacturing sector weighing on headline figures. The IFO Business Climate Index fell from 98.5 to 90.8. While current sentiment remained resilient, the expectations indicator tumbled from 98.4 to 85.1.

From the ECB, the Economic Bulletin added to the doom and gloom, with the ECB highlighting uncertainty ahead and risks to the economy tilted to the downside.

For the week, the EUR fell by 0.62% to $1.0983. In the previous week, the EUR rose by 1.27% to $1.1051.

The EuroStoxx600 slipped by 0.06%, with the CAC40 and the DAX ending the week down 1.01% and by 0.74%, respectively.

For the Loonie

It was a quiet week on the economic data front. Stats were limited to RMPI figures that had a muted impact on the Loonie.

The upward trend in crude oil prices provided support in the week.

In the week ending 25^th March, the Loonie rose by 1.00 to C$1.2477 against the Greenback. In the week prior, the Loonie increased by 1.11% to C$1.2603.

Elsewhere

It was a bullish week for the Aussie Dollar and the Kiwi Dollar.

The Aussie Dollar rallied by 1.35% to $0.7515, with the Kiwi Dollar gaining 0.93% to end the week at $0.6972.

Both found support, with the markets viewing distance from the Russian invasion of Ukraine as positive.

For the Aussie Dollar

There were no material stats to provide the Aussie Dollar with direction.

For the Kiwi Dollar

Trade and consumer sentiment were the key stats in the week. The numbers had a muted impact on the Kiwi Dollar, however, despite weaker consumer sentiment in the first quarter.

Trade data was mixed for February. While the trade deficit narrowed compared with January, the deficit widened year on year to NZ$8,370m.

Further disruption to supply chains is evidenced in surveys, suggesting plenty of uncertainty ahead.

For the Japanese Yen

Private sector PMIs and inflation were the main stats of the week. The numbers failed to impress. Tokyo’s annual core rate of inflation ticked up from 0.5% to 0.8%, with the services sector continuing to contract. In March, the services PMI rose from 44.2 to 48.7.

A pickup in manufacturing sector activity was of little consolation, with the BoJ seeing the Russian invasion of Ukraine as a significant risk to the economic outlook.

The Japanese Yen slid by 2.42% to end the week at ¥122.05 against the Dollar. In the week prior, the Yen ended the week down by 1.60% to ¥119.170.

Out of China

There were no major stats from China for the markets to consider in the week.

In the week ending 18^th March, the Chinese Yuan fell by 0.08% to CNY6.3662. Through the week prior, the Yuan ended the week down by 0.31% to CNY6.3393.

The Hang Seng Index ended the week down 0.04%, with the CSI300 falling 2.14%.