US Sentiment Survey Released below estimate

University of Michigan Sentiment index was released lower today, below the 74 estimate, at 72.5. Prior number for Feb 2010 was 73.6.

Canada’s jobless rate drops to 8.2%

Canada’s recovering economy continued to churn out new jobs last month, adding 60,000 full-time positions — mostly in the public sector. The February unemployment rate of 8.2 per cent was the lowest reported by Statistics Canada since April, 2009, which was before the country began to recover from a major recession.

Looking at the USD/CAD the pair has moved lower.

US Retail Sales Rise

Total US retail sales rose 0.3 percent, as released by the Commerce Department, as consumers bought an array of goods from necessities to luxury items. Sales for January were, however, revised down to only a gain of 0.1 percent from the previously reported 0.5 percent increase.

3-12 Economic Calendar

BOJ on the Wire Pushing Yen Lower

The following comments from the BOJ against the Yen have helped push the USD/JPY pair higher even as the USD remains under some pressure. In addition to comments from Morgan Stanley earlier that ‘Japan is increasingly likely to sell Yen and that Yen could weaken to 109 per dollar at year-end.’

• Hatoyama says markets should set exchange rates.
• Hayatoma says to take appropriate measures on the Yen if needed.
• Hayatoma says need to take proper action on stronger Yen.
• Shirakawa says BOJ’s accommodative policy is affecting the Yen.
• Shirakawa says liquidity injection has limited impact on prices.
• Shirakawa says shouldn’t be influenced by short-term prices.
• Kan says up to BOK to decide specific policy measures, expects BOJ to take appropriate policy measures.
• Kan says intervention always option if moves are abrupt.

EUR/USD Testing Resistance Again

The EUR/USD is again has tested the descending trendline resistance we examined yesterday on the 4-hr chart, with the 4-200hr moving average directly above that line and the 1.37 handle.  The trendline had held yesterday and the pair is continuing to test it early in the Asian session. The signals on this chart might suggest a break through as the moves lower from the last few hits have been less significant than the ones before.

However on the daily chart we this is the 10 daily attempt at the trendline with some bearish signals as the 100 day moving average is about to move below the 200 day mavg.

SNB at 8:00 AM. US and Canada Trade data due at 8:30

The SNB will announce their interest rate decision at 8:00 AM. The expectation is for unchanged rates. What will be of interest is if they change the wording on the value of the Swiss Franc.  Will they keep the wording the same at “it would prevent an ‘excessive’ rise in the franc” . The EURCHF is down at 1.4600 level - testing the SNB to address the currency in the comments.  The EURCHF had been using 1.4630 as the floor previously.  If they keep the language look for a further bias to the downside for EURCHF and possibly USDCHF.  The central bank is concerned about too strong a currency being deflationary but if global growth is rebounding,  it may be ok at this moment.  If they keep the language, look for 1.4630 to cap the topside for the EURCHF. The bottom will be explored to see how low it can go.

At 8:30 the US Trade Deficit will be released. The expectation is for a $41.0 billion gap versus $40.2B last month.  The Trade Deficit has been getting larger again. This is a drain on GDP growth (the inflation adjusted Trade Balance is the one that is used for GDP).   A larger deficit should lead to a weaker dollar.

Also at 8:30 will be the weekly Unemployment Claims. The expectations for Claims is for a slight fall to 460 K from 469 K.  Continuing Claims are expected to come in at 4500K unchanged from last week.   The employment picture has stabilized from an Initial Claims standpoint over the last month or so. Some suggest it may be weather related.  If so, we should start to see the thaw soon.

Canada will release their Trade Balance with a 0.2B surplus expected after a -0.2B deficit last month.  They also release Capacity Utilization which is expected to rise to 70.0% from 67.5%.  The New Housing Price index is expected to show a 0.4% rise, the same as last months rise.

3-11 Economic Calendar