A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.
Same Old Same Old
Share this story:
Alan Rose Foreign Exchange Senior Trader
Foreign exchange markets remain hopeful for something to ignite some passion and energy to break out of the multi-month pattern of general consolidation and congestion zones. Today was a potential opportunity with both the ECB monetary policy meeting and U.S. CPI taking place (details below) to move the needle by virtue of any surprises that were not already baked into market expectations.
Up until just a few minutes ago, both the U.S. CPI data and the ECB announcement to leave interest rates unchanged at 0.0% hardly moved the needle. However, over the last 30 minutes or so, ECB President Mario Draghi, in his post-meeting press conference, continued to paint a picture of ongoing geopolitical concerns and EZ weakness and stated that the ECB was prepared to act; this has finally caused the euro and other European major and emerging market currencies to weaken. European equities are slightly higher while G7 interest rates are lower.
U.S. CPI for March saw the headline number come in stronger than expected at 0.4% bringing the YoY rate up from 1.5% to 1.9%. But core prices (ex-food and energy) came in weaker than expected at 0.1% bringing the YoY rate down from 2.1% to 2.0%. U.S. interest rates were largely unchanged at the release of the report but have been dragged lower on the back of the dovish comments from ECB President Draghi. Most of the foreign exchange price action has probably already occurred for today and the foreign exchange markets will remain in narrow and quiet ranges.
HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT:
The British pound is outperforming other European currencies this morning on the back of better-than-expected economic data. While the U.K. trade deficit was slightly larger than forecast, industrial production jumped by 0.6% against expectations of a gain of only 0.1%. Construction output rose by 0.4% versus expectations of a drop of 0.4%. U.K. interest rates are nearly unchanged while other G7 interest rates are all lower.
Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!
Follow City National Bank on social media:
Non-deposit investment products:
Are not FDIC insured,
Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and
Are subject to investment risks, including possible loss of the principal invested.
This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.
Tune in for a guide to ETFs and investing strategies for potential long-term success. View in a browser Fidelity Fidelity Log in Creating a portfolio with ETFs: Why and how Creating a portfolio with ETFs: Why and how