Friday, March 27, 2015

Better-than-expected jobless claims support USD

•     Better-than-expected jobless claims support USD
–    Jobless claims beat estimates, show that US labor market continues to improve
–    US Fed funds expectations rise, bond yields rise
–    USD gains vs all other G10 currencies, most EM

•     Why I’m bearish oil
–    US production hasn’t slowed even though prices have fallen
–    Inventories are at a record level; Cushing storage tanks will be full by June
–    Oil output likely to rise in June because of regulations in the #2 oil producing state
–    Increase in production when there’s no place to put it = lower prices

•     Japan inflation back to zero after factoring in tax hike
–    Shows BoJ’s efforts to jumpstart inflation haven’t worked
–    They will probably have to redouble their efforts = weaker JPY

•     Today:
–    Eurozone: French consumer confidence
–    Sweden:  retail sales for Feb expected to decelerate slightly, SEK-negative
–    Norway:  official unemployment rate for March, retail sales for Feb = NOK-positive
–    US: 3rd estimate of Q4 GDP expected to be revised up; final U of M consumer sentiment for March

–    Speakers:  4 central bank governors (BoE’s Carney, Riksbank’s Ingves, Norges’ Bank’s Olsen & Fed Chair Yellen) plus one Vice Chair (Fed’s Fischer)

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