US data drought coming to an end

US data drought coming to an end

Macro 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  A relative lack of top-tier US data since last week's FOMC outing may be bolstering the status quo, but this week holds a slew of new stateside releases that have the potential to rock the boat.


There has been a shortage of top-tier, actionable US economic data since last week’s Federal Open Market Committee meeting. That changes this week, but it may not be the catalyst to jump-start FX volatility. February Housing Starts (actual -8.7%) and Building Permits (-8.7%) were not very impressive, and they were not expected to be due to nasty weather during the month. FX markets did not react to the news.

On Wednesday, US Trade Balance and Current Account data are due. The January trade deficit is expected to narrow to $57.0 billion from a nine-year peak of $59.8 billion in December. China’s contribution to the deficit could be a flash-point for FX, especially after China thumbed its nose at the US and bought 300 jets worth around $35 billion from Airbus.

Thursday, Q4 GDP (forecast 2.4%) is vulnerable to a below-estimates result on the back of the weak Retail Sales report and from the impact of the government shutdown, which may trigger renewed US dollar selling pressure. The only consolidation is that Q4 is history, and traders know it was a weak quarter.

Friday, Personal Spending and Income may have little lasting FX impact because the data may have been impacted by poor weather, as well.

Wall Street appears to have gotten over its yield curve inversion scare. The three major indices are up close to 1.0% in early trading, with a 1.45% jump in Apple shares (AAPL: Nasdaq) helping to improve the mood. Nevertheless, the DJIA still needs to recover another 266 points just to get back to Friday’s peak level.

The US dollar has traded with a mixed tone since New York opened. It has squeezed out gains against EUR, GBP, and JPY while drifting lower against CHF and the Antipodean currencies. The US dollar Index (USDX) underscores the dollar’s malaise as it has been rangebound since March 15.
US dollar index
US dollar index (hourly, source: Saxo Bank)

Quarterly Outlook

01 /

  • Equity outlook: The high cost of global fragmentation for US portfolios

    Quarterly Outlook

    Equity outlook: The high cost of global fragmentation for US portfolios

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: Commodities rally despite global uncertainty

    Quarterly Outlook

    Commodity Outlook: Commodities rally despite global uncertainty

    Ole Hansen

    Head of Commodity Strategy

  • Upending the global order at blinding speed

    Quarterly Outlook

    Upending the global order at blinding speed

    John J. Hardy

    Global Head of Macro Strategy

    We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ...
  • Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Quarterly Outlook

    Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever

    Jacob Falkencrone

    Global Head of Investment Strategy

  • Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    Quarterly Outlook

    Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?

    John J. Hardy

    Global Head of Macro Strategy

  • Equity Outlook: The ride just got rougher

    Quarterly Outlook

    Equity Outlook: The ride just got rougher

    Charu Chanana

    Chief Investment Strategist

  • China Outlook: The choice between retaliation or de-escalation

    Quarterly Outlook

    China Outlook: The choice between retaliation or de-escalation

    Charu Chanana

    Chief Investment Strategist

  • Commodity Outlook: A bumpy road ahead calls for diversification

    Quarterly Outlook

    Commodity Outlook: A bumpy road ahead calls for diversification

    Ole Hansen

    Head of Commodity Strategy

  • FX outlook: Tariffs drive USD strength, until...?

    Quarterly Outlook

    FX outlook: Tariffs drive USD strength, until...?

    John J. Hardy

    Global Head of Macro Strategy

  • Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Quarterly Outlook

    Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges

    Althea Spinozzi

    Head of Fixed Income Strategy


Business Hills Park – Building 4,
4th Floor, office 401, Dubai Hills Estate, P.O. Box 33641, Dubai, UAE

Contact Saxo

Select region

UAE
UAE

All trading and investing comes with risk, including but not limited to the potential to lose your entire invested amount.

Information on our international website (as selected from the globe drop-down) can be accessed worldwide and relates to Saxo Bank A/S as the parent company of the Saxo Bank Group. Any mention of the Saxo Bank Group refers to the overall organisation, including subsidiaries and branches under Saxo Bank A/S. Client agreements are made with the relevant Saxo entity based on your country of residence and are governed by the applicable laws of that entity's jurisdiction.

Apple and the Apple logo are trademarks of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.