The US dollar has firmed a bit from new lows versus the Euro today, which was partially buoyed by fresh ECB comments on hiking rates next Thursday, although the JPY has rallied the most today in Europe as discussed above. After several weeks of mostly very quiet price action, USDCNH has rallied sharply today – more than one day of that kind of move is a story that will need updating.
Yesterday saw another very weak regional manufacturing survey, this time the Dallas Fed’s manufacturing survey number, which put in almost dire reading of -23.4, the weakest reading since the financial crisis if we ignore the few pandemic break-out months of 2020. This echoed a similarly weak -31.3 reading in the Philly Fed survey. As we discussed in this morning’s Saxo Market Call podcast, these data points are confusing and don’t jibe at all with the improving trend in the S&P Global PMI numbers. We’ll get a couple of regional Fed services sector surveys today – also from the Philly and Dallas Feds – but confidence in this survey data is entirely lacking when the results are conflicting and as long as the labor market data remains tight. Part of the problem is likely in the wild swings in economy from the “pig through a python” pattern that wildly impacted the demand side of the economy and inflation, particularly on the manufacturing side from late 2020 and through much of 2021, only to be followed by a hangover on the readjustment to the trend. Corporate earnings reports in the coming couple of weeks might prove a helpful measure. One data point yesterday was US consumer staple giant Procter and Gamble reporting 3.5% YoY growth in revenue and only guiding for 0-4% revenue growth for the coming year with core inflation still running 4.5-5.5%, depending on the measure.
The last data points of note from the US before next Wednesday’s FOMC meeting include today’ April Consumer Confidence survey, Thursday’s weekly initial jobless claims, the Friday Mar. PCE Inflation report and the ISM’s – again, more surveys – next Monday for Manufacturing and Wednesday for Services. The March JOLTS job openings survey is up next Tuesday as well after raising eyebrows in dropping sharply in February.
Table: FX Board of G10 and CNH trend evolution and strength.
The Swiss franc continues to ride high, even outpacing the strong Euro, as the FX Board makes it clear that the USD is neither here nor there, broadly speaking, while the commodity dollars, NOK and CNH are the weakest links.