Eurozone Industrial Production Falls to the Lowest Since October 2021

Eurostat today reported that eurozone industrial production fell by 4.1% in March, the most significant drop since July last year. Compared with the same month of the previous year, output fell by 1.4%, instead of the expected +0.9%, whereas, in February, it was up +2.0%.

UK Employment Might Be the Catalyst Needed for BOE

The UK is expected to get another bit of good economic news. But upbeat forecasts make it easier for a disappointment to appear and drag on the market. After a string of positive results that have failed to energize the pound over the last few trading days, investors might be hoping for some upside in cable from the jobs numbers to be released tomorrow.

Australian Dollar Stems Bleeding, RBA Minutes Eyed

AUD/USD has rebounded on Monday, after a steep slide of 2% over the previous two sessions. The Australian dollar is trading at 0.6689, up 0.71% on the day.

Sunset Market Commentary

In its spring forecasts, the European Commission raised its forecasts for EMU growth to 1.1% for 2023 and 1.6% for 2024 (was 0.9% and 1.5% in February winter forecast). The better performance is due to a ‘terms-of-trade countershock’ caused by declining energy prices, by abating supply constraints, improved business confidence and a strong labour market.

Canadian CPI Inflation to Cool Further

Investors will look for clues on whether the rate cut pricing in Canada is unseasonable after the BoC chief claimed that the rate hike cycle may resume if necessary to press inflation to the target. The figures are expected to weaken for the fifth consecutive month on Tuesday at 12:30 GMT, likely creating some extra downside pressure in the Canadian dollar.

Fed Speakers Show Growing Divergence on How to Proceed with Monetary Policy

Fed speakers show growing divergence on how to proceed with monetary policy. Atlanta Fed Bostic (non-voter) is inclined to pause at the June meeting, but he confirmed that the committee is still out on the issue. If he had a bias between going up or down as a next move, it would still be up. Resilient consumer spending and tight labour markets pose upside inflation risks even as the Fed’s earlier tightening measures will start having a bigger impact.

Oil Under Pressure, But Downside Limited

WTI crude oil rebounded on Monday after three sessions of declines in the second half of last week. Oil found support just before the start of active trading in Europe after falling to a 10-day low of $69.40.

Ether and Bitcoin Seek Local Support

Bitcoin’s advance on Monday stopped near $27.5K, and at the time of writing, the price has rolled back to $27K, the lower boundary of last Friday’s short-term uptrend channel. A break below $ 26.7K could put more pressure on the cryptocurrency.

Aussie Shrugs Off RBA Minutes, Weak Consumer Confidence

The RBA released the minutes of its meeting earlier this month. That meeting was a barn-burner, with the RBA stunning the markets with a 25 basis-point hike. The central bank had finally taken a pause in its rate-tightening cycle in April and given the lukewarm economy, a second-straight pause seemed a safe bet, but in the end, the RBA opted for a rate increase.

Some Positives for BoE from UK Jobs Data, Chinese Figures Less Good

UK jobs data was a mixed bag this morning as wages accelerated again to 6.7%, excluding bonuses, while unemployment also ticked higher as inactivity fell. The Bank of England will no doubt be concerned about the pace of wage growth, with it not being consistent with inflation returning to 2%, but there are signs of slack emerging which is encouraging.