Daily Market Review: US Unemployment Claims Down

PPI (MoM) (CH, 09:15 GMT)

CPI (YoY) (EU, 11:00 GMT)

CPI (MoM) + NY Empire State Manufacturing Index (U.S, 13:30 GMT)

TIC Net Long-Term Transactions (U.S, 14:00 GMT)

Industrial Production (MoM) (U.S, 14:15 GMT)

FOMC Member Fisher Speaks (U.S, 14:30 GMT)

Michigan Consumer Sentiment (U.S, 14:55 GMT)

In the latest positive sign for the U.S. labor market, the Labor Department released a report on Thursday showing that first-time claims for unemployment benefits unexpectedly decreased in the week ended March 9th. The report showed that initial jobless claims fell to 332,000, a decrease of 10,000 from the previous week's revised figure of 342,000. Another report showed that the U.S. producer prices rose by slightly more than anticipated during the month. The Labor Department said its producer price index rose by 0.7 percent in February after edging up by 0.2 percent in January. Economists had expected producer prices to increase by 0.6 percent.

Japanese Prime Minister Shinzo Abe’s initiative to end two decades of economic stagnation took its biggest step yet as Parliament confirmed his picks for a new Bank of Japan (8301) leadership team. Haruhiko Kuroda, who advocated an inflation target more than a decade before the central bank set one, won a majority of votes in the upper house a day after his nomination as governor was endorsed by the lower body. Abe’s picks for two deputies were also approved, with BOJ critic Kikuo Iwata prevailing after being opposed as too radical by some lawmakers.

European leaders are loosening the shackles on national budgets as the euro-area recession deepens and unemployment climbs, with pro-growth calls coming even from German Chancellor Angela Merkel, the leader most closely associated with austerity. Merkel went into a European Union summit yesterday urging a stepped-up fight against youth unemployment, now over 50 percent in Greece and Spain, and skipped the appeal to fiscal discipline that has been her standard message throughout the debt crisis. Other news is that European Central Bank council member Klaas Knot said the euro’s exchange rate won’t affect the ECB’s economic forecasts and he expects the bank to maintain its accommodative monetary policy. While Former Italian Prime Minister Romano Prodi said fiscal austerity measures in Europe have been excessive and called the euro too high.

EUR/USD: The EUR/USD was trading higher at 1.30152 at the time of writing as European leaders’ debate loosening the shackles on national budgets to address economic weakness amid the region’s debt crisis. Sentiments and speculations are driving the market despite positive economic data in the U.S. Trading was a bit sticky on the Asian session as investors jumped on the sidelines ahead of the CPI (YoY) in the Eurozone, which is expected to come unchanged at 1.8%. In addition, investors are waiting for news regarding the austerity measures and the debt crisis in the Eurozone to get visibility. Later in the day, the U.S will release the CPI (MoM) (Forecast: 0.5% - Previous: 0.0%), the NY Empire State Manufacturing Index (Forecast: 8.4 – Previous: 10.0), the TIC Net Long-Term Transactions (Forecast: 55.3B – Previous: 64.2B), the Industrial Production (MoM) (Forecast: 0.4% - Previous: -0.1%), the FOMC Member Fisher Speaks and the Michigan Consumer Sentiment (Forecast: 78.0 – Previous: 77.6). Positive data from the U.S will be bullish for the USD and may bring some corrections on the market. Investors should stay cautious and wait for data and news to come on market to get visibility. The resistance level is at 1.30633 and the support level is at 1.29545.
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GBP/USD: The GBP/USD was trading in the narrow range of 35pips since the beginning of the Asian trading session after rising the most in seven months on speculation Qatar will invest in infrastructure projects, boosting demand for sterling amid calls for growth-based policies in the government’s annual budget. U.K. and Qatari officials and ministers have held talks on potential projects, the Financial Times reported today without saying where it got the information. Here again, sentiments and speculations are diving the market. Investors should remain very prudent and wait for data from the U.S to come on market to get visibility, as no major event is expected in the UK today, apart from the CB Leading Index (MoM). Later in the day, the U.S will release the CPI (MoM) (Forecast: 0.5% - Previous: 0.0%), the NY Empire State Manufacturing Index (Forecast: 8.4 – Previous: 10.0), the TIC Net Long-Term Transactions (Forecast: 55.3B – Previous: 64.2B), the Industrial Production (MoM) (Forecast: 0.4% - Previous: -0.1%), the FOMC Member Fisher Speak and the Michigan Consumer Sentiment (Forecast: 78.0 – Previous: 77.6). Positive data from the U.S will be bullish for the USD and may bring some corrections on the market. Investors should also monitor the latest development and news in the Eurozone to get better indications on the trend of the pair. The resistance level is at1.51528 and the support level is at 1.49957.
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WTI (Oil): Oil was trading slightly higher at 93.220 at the time of writing on strong economic data from the U.S. However, trading seems sticky after Morgan Stanley said in a report yesterday, that Oil output by the Organization of Petroleum Exporting Countries may rise by 850,000 barrels a day from April to June, signaling a gain in prices as spare production capacity is reduced. The group, which provides about 40 percent of global production, will pump more as refineries end maintenance and utilities in Saudi Arabia and Japan increase the use of crude and fuel oil for electricity generation, the bank said. Investors should wait for data from the U.S to get more visibility. Today, the U.S will release the CPI (MoM) (Forecast: 0.5% - Previous: 0.0%), the NY Empire State Manufacturing Index (Forecast: 8.4 – Previous: 10.0), the TIC Net Long-Term Transactions (Forecast: 55.3B – Previous: 64.2B), the Industrial Production (MoM) (Forecast: 0.4% - Previous: -0.1%), the FOMC Member Fisher Speak and the Michigan Consumer Sentiment (Forecast: 78.0 – Previous: 77.6). Investors should stay on their guard as a Bloomberg survey showed that WTI may fall next week after rising domestic production boosted U.S. crude inventories to the highest level in eight months. Thirteen of 29 analysts and traders, or 45 percent, forecast prices will drop through March 22. Ten respondents, or 34 percent, predicted a gain. Six said there would be little change. The resistance level is at 94.480 and the support level is at 91.957.