US fourth-quarter GDP was unrevised at 1.9% compared with expectations of an upward revision to 2.1% as a higher estimate for consumer spending was offset by a downward revision to government spending and investment.
The Chicago PMI index was notably stronger than expected with an increase to 57.4 for February from 50.3 with robust gains in employment and prices on the month. The latest consumer confidence reading was also stronger than expected with an increase to 15-year highs of 114.8 from 111.6 in January which underpinned confidence in the spending outlook.
The dollar was still unable to gain any support as the Euro broke above 1.0600 with choppy trading into the London fix. San Francisco Fed President Williams stated that a March rate increase was up for serious consideration given full employment and accelerating inflation which provided fresh dollar support. New York Fed President Dudley stated soon after, that the case for interest rate increase is now more compelling and that there had been a very large rise in household confidence together with very buoyant financial markets.
Dudley’s comments had a more substantial impact in boosting the US currency as futures markets indicated that the chances of a March rate increase were now well above 50%. The Euro retreated to test support near 1.0550 as the dollar gained strong support against all majors.
Japanese Yen With JPY at a new 34 year low versus EUR, the market is set for an ambush by the Bank of Japan if it acts today at the end of their Policy Meeting to support the Yen. The reason that the market is susceptible is because it has convinced itself that the BoJ […]
Too soon to call USD lower Those following the US Dollar’s performance in the markets would have noted a recent downturn accelerating as this week has progressed. There have been two factors driving this sell-off but it is far from certain that either may endure long enough to push the Dollar index back to its […]
Milan, Italy The City of Milan has a late night noise problem and so it has acted unilaterally to resolve it-Italian style. A ban on the sale of take away food including ice cream and pizza after midnight is being imposed to protect the “peace and health of residents.” Here in the UK late night […]