It was a volatile day for the entire market yesterday. After swinging in between gains and losses, the US dollar index settled at 101.532, with a minor gain 0.08%. U.S. dollar jumped to the day’s high as weaker-than-expected U.S. economic growth in the first quarter is not likely to deter the Federal Reserve from raising interest rates next week.
The advance estimate of first-quarter gross domestic product (GDP) showed a 1.1% annualized rate during the period. The economy grew at a 2.6% pace in the fourth quarter. Economists polled by Reuters had forecast GDP rising at a 2.0% rate.
Further, the Labor Department on Thursday showed initial claims for state unemployment benefits decreased 16,000 to a seasonally adjusted 230,000 for the week ending April 22. Economists had expected 248,000 claims in the latest week.
Gold and silver prices settled with minor gains of 0.1% and 0.21%, respectively. Base metals recovered slightly, except for the Aluminum prices settled down by 0.34%. Copper, Zinc, and Lead prices settled up by 0.41%, 0.08 and 0.08%, respectively.
Crude oil prices rebounded from the day’s low 6073 and settled at 614 levels, down 1.52%.
Economic data and events to watch
Japan
At 5.00pm – Tokyo Core CPI y/y will be released. Data foreseen at 3.2% unchanged from previous 3.2%.
Further, the Market will react strongly to the Bank of Japan Policy meeting time is tentative.
It will be the first policy meeting of new Bank of Japan Governor Kazuo Ueda chairs. Market is not expecting any changes to the central bank’s ultra-dovish monetary policy; they are on the alert for any potential surprises.
Ueda is under intense scrutiny over how he might steer the BOJ away from the massive stimulus program in place over the last decade without posing risks to market stability.
Japanese inflation is outstripping estimates but comments by Ueda in recent weeks indicate he believes stimulus settings remain appropriate for now.
At 10.30am – Housing Starts y/y, data is foreseen at -3.9% lower from previous 0.3%.
All above data and policy could have a volatile impact on the dollar and Yen.
EUROZONE
At 11.30am – Spanish Flash CPI y/y due to release. Data is foreseen at 4.4% from 3.3%.
At 1.30pm – the Euro zone is to release advance data on first quarter GDP and April inflation reports from the region’s largest economies Germany, France and Spain.
Europe GDP data expect to come at 0.2% slightly higher from 0.0. Spain, Germany, and Italy are expected to come favorable for Euro and bullions prices.
Above data could have a positive impact on the Euro and the bullions.
US
At 6.00pm – the core PCE price index and the employment cost index due to be released. Both data will have a significant impact on dollar and bullions prices.
Core PCE expects to come unchanged at 0.3%, while the Employment Cost Index q/q expects to stay slightly higher at 1.1% from previous 1.0%.
At 6.00 pm – Personal Income m/m and Personal Spending m/m due to be released. Both data are foreseen slightly lower at 0.2%, -0.1% compared to 0.3%, 0.2% respectively.
At 7.15pm – Chicago PMI due to release. Data foreseen at 43.6 from 43.8.0
At 7.30pm – Revised UoM Consumer Sentiment. Data is foreseen at 63.5 from 63.5.
All above data expect to have a volatile impact on the dollar.