Claims And Robust Growth

Jobless claims came below market expectations at 367,000; 5,000 below consensus and 1,000 below last reading. Meanwhile, the trade deficit continued to widen printing $51.8 billion in March from $46.0 billion February. Markets maintained the volatile stance, however with a slight upside bias today. The EUR/USD is pushing towards the key previous low and resistance level around 1.2975-1.3000 area, where the resistance is expected to show robustness in the near term, and further downside attempts towards the recent low at 1.2909 seem likely within the upcoming sessions, although a break above 1.3000 could extend the bullish correction towards 1.3075. The GBP/USD rallied after the BOE decision, officials decided not to give the economy another dose of cash injection despite the ailing ...

Weekly Economic and Financial Commentary U.S. Review First-Quarter GDP Growth Slows The U.S. economy grew at a 2.2 percent annual rate in the first quarter, somewhat slower than the consensus had expected. Consumption remained the primary driver of growth as business spending slowed and the government sector continued to scale back spending. In our U.S. review section this week, we discuss the GDP report in the context of the big miss in durables and consider what it means for business spending going forward. We also look at a very small change in the Fed statement this week that reflects an improving view on the troubled housing sector. Business Spending Poised for a Slowdown? Durable goods orders for March were ugly. The 4.2 percent drop was the largest decline since the U.S. ...

(Reuters) - Quarterly reports from some of Europe's top banks showed the scars of the euro zone crisis on Thursday, with big losses on Spanish property, and fragile markets casting a shadow over the rest of the year despite an early investment banking rebound. Spanish bank Santander said first quarter net profit dropped 24 percent after it took a 3.1 billion euro ($4.1 billion) provision to cover rising loan defaults, as the effects of Spain's property market crash were compounded by economic recession and joblessness afflicting nearly one in four workers. Although results from Barclays and Deutsche Bank showed investment banking income bounced back strongly after a torrid end to last year, the sickly euro zone economy continues to dog the industry. Barclays beat analysts' forecasts ...

FOMC Preview: No Further QE Wednesday will be the final day of the two-day-long FOMC meeting being held this week. The meeting will provide an FOMC statement and new economic projections followed by a press conference from Ben Bernanke. We expect the statement to repeat the tone from the March meeting with no change in guidance for the Fed funds rate (exceptionally low until late 2014). The only tweak in language compared with March could be in the reference to oil and gasoline prices which have moderated since early March. The economic projections and the press conference will be more interesting. We expect the projection on the unemployment rate to be lowered while inflation projections could be adjusted slightly higher. We do not expect any signs that the Fed is ...

The Week Ahead Highlights UK Q1 GDP to put the brakes on more QE French political risk comes to a head Italy and Spain turn attention to fiscal targets BOJ to back up rhetoric with action FOMC still in wait-and-see mode Market Moves UK Q1 GDP to put the brakes on more QE The major data release in the UK this week will be the preliminary Q1 GDP reading. There is considerable uncertainty around this figure due to some strong data in the services sector, especially retail sales, balanced by some disappointments in the manufacturing and construction sectors. Retail sales for March rose 1.5%, more than the 0.4% expected. This was mostly due to the effects of good weather boosting demand for clothes, footwear and gardening equipment. This helped to reverse some of the ...

HIGHLIGHTS OF THE WEEK United States Economic data out of the U.S. gave mixed signals of the state of the economy. While retail sales started the week with a strong 0.8% increase, industrial production stalled and housing starts and existing home sales both fell. A feeling of déjà vu has gripped economy watchers remembering back to last year's spring slowdown. While we expect growth to slow from relatively strong first quarter growth, we continue to expect real GDP growth of around 2.0%. The recent decline in gasoline prices contributes to our relative optimism. The U.S. economy is healing, but the shock from the financial crisis is still reverberating and will keep a lid on growth rates. The biggest risk to economic growth remains fiscal drag in 2013. Canada The Bank ...

The Weekly Bottom Line HIGHLIGHTS OF THE WEEK United States A narrowing trade deficit and larger than expected inventory accumulation in February suggests Q1 growth will be closer to 2.5-3.0% than our previous forecast for 1.7%. That being said, this does not change our underlying outlook. The higher print on GDP reflects an inventory swing and improved trade balance due to weak imports. In contrast, domestic demand still appears set to post a shallow 2% gain. In order for the U.S. economy to generate sustained growth at the 3% level, we will need to see a much healthier job market that is capable of generating widespread growth in real incomes. Canada In two survey releases, the Bank of Canada detailed that businesses are more upbeat about their sales' prospects and ...

Technical Analysis EUR/USD "Raising the size of the euro zone bailout fund will be supportive for the euro, although the market is already aware of it" - JP Morgan Private Bank (based on CNBC) Rally of EUR/USD is unlikely to appear on the chart on the occasion of the fact that a number of significant resistances are located in close proximity of the current price - 1.3379, 1.3435 and 1.3487. EUR/JPY "The worse-than-expected Tankan survey seems to be fueling talk that the BOJ will ease policy further" - Forecast Pte (based on Bloomberg) Despite a recent failure of EUR/JPY to overcome resistance at 111.57, the currency couple is anticipated to make another attempt to breach it. GBP/USD "The expectation from the OECD that the UK is about to fall into another recession makes quantitative ...

Weekly Economic and Financial Commentary : 30/03/2012 U.S. Review Mixed Signals Housing data released this week were a bit disappointing but also offered some signs of optimism. Pending home sales fell in February but remained near a one-year high. The decline in the S&P Case-Shiller Home Price Index in January was the smallest since July, although the index did reach a new cyclical low. Personal spending rose in February by the most since July, as consumers dipped into savings to spend more on services. However, consumer confidence slipped in March due to a decline in the expectations index amid rising gas prices, although purchase plans improved. Mixed Signals Housing data released this week were slightly disappointing but also provided some signs of optimism. Pending home ...