Data dependent, but are the data dodgy?
FX Trader, Loonieviews.net
Summary: Numbers make the world go around, at least the world of financial markets. But can we really trust the data we're given?
Reuters claims that ECB “sources” say a “significant minority of policymakers do not believe in a second-half recovery because of questionable accuracy within the bank’s models, as evidenced by its long history of downward revisions. EURUSD wobbled on the news but quickly recovered from its small losses.
A common theme running through the policy statements from many major G10 central banks is “downside risks to their outlook,” and if the data inputs are questionable, those downside risk will persist.
Nevertheless, data and surveys are what make the FX markets go around as evidenced by yesterday’s Bank of Canada quarterly Business Outlook Survey. (BOS) The BOS was a tad weaker than expected with a notable drop in capacity pressures which is expected to keep the Bank of Canada on hold for the rest of the year. USDCAD soared on the news and is consolidating those gains in a 1.3350-1.3400 range in New York trading. Today’s Manufacturing Shipments data for February (Actual -0.2% vs January 0.8%) was ignored.
It is a slow news and data day with FX action confined to narrow bands. GBPUSD dropped from 1.3090 to 1.3050 on headlines suggesting that Tory and Labour Brexit talks are not going well is a knee-jerk reaction in a “no-news, no-data” environment.
Wall Street markets are perky. A handful of better-than-expected earnings reports combined with equity market gains in Asia and Europe led to small gains in the three major indices in early trading. Yesterday’s dovish comments from Chicago Fed President Charles Evan’s that rates will remain unchanged into 2020 have helped put the S&P 500 within spitting distance of an all-time peak.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.
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