Market News | Amana Capital
Japan's tertiary index was unchanged in February m/m, after a 0.4% fall in January. Even with a rebound in March, these data point to no growth for the tertiary sector in Q1, with the index likely to be flat q/q, after a 0.5% jump in Q4.
The services PMI has outperformed the tertiary index in Q1 so far, but the hard data generally point to service sector weakness. And the PMI dropped to 50.9 in March, from 51.7 in February, so we don't hold out much hope for a revival of the tertiary index in the final month of the quarter. The services sector should rebound again in Q2, however.
The rise in non-core consumer prices has slowed, freeing up household purchasing power. Business conditions in the sector remain buoyant, judging by the Tankan survey.
The United States NAR existing home sales report for the month of March revealed an overall increase of 1.1 percent m/m (to a SAAR of 5.60 million), versus the unrevised SAAR of 5.54 million reading seen in February. This comes in above expectations for a 5.55 million result.
Meanwhile, inventories pushed higher around 3.6 months supply (from 3.4), while the median price increased to around USD250.4k (5.8 percent y/y), marking the 73rd consecutive month of y/y price gains. Overall, 4 percent of March activity was from distressed sales, unchanged from February.
Technical Analysis Overview: The EUR/USD currency pair is trading 0.52% lower at 1.2222 at the time of writing, closely eyeing the 1.22139 immediate support level, while S2 is seen at 1.21523. Meanwhile, R1 and R2 are seen at 1.22984 and 1.23500 respectively.
Canada February Wholesale Sales Fall -0.8 Pct, Misses Market Expectations as Well
The Canada wholesale sales report revealed an overall -0.8 percent m/m reading for February, versus the revised 0.3 percent m/m reading seen in January (previous was 0.1 percent m/m), well below market expectations for a 0.8 percent m/m result.
According to StatsCan, sales were down in 4 of 7 subsectors, as decreases in the miscellaneous and the motor vehicle and parts subsectors contributed the most to the decline. Meanwhile, USD/CAD traded 0.54% higher at 1.2833 at the time of writing.
Technical Analysis Overview: The USD/CAD currency pair is trading above the trend-defining level of 1.28203; the next resistance is seen at 1.29455. 1.25230 is seen as the immediate support level, while S2 is seen at 1.24446.
The United States’ Chicago Federal Reserve’s National Activity Index weakened to 0.10 in March, versus the revised +0.98 reading seen for February (previous 0.88). According to the release, the 3-month moving average came in at +0.27 for March, versus the revised +0.31 result seen for February (previous 0.37).
This significance of the 3-month moving average in the series is its attempt to gauge the probability of a recession (below -0.70 after a period of expansion would suggest recession). Overall, recent performance is suggesting subdued inflationary pressure from economic activity over the coming year.
Technical Analysis Overview: The EUR/USD currency pair is trading 0.50% lower at 1.2227 at the time of writing, closely eyeing the 1.22139 immediate support level, while S2 is seen at 1.21523. Meanwhile, R1 and R2 are seen at 1.22984 and 1.23500 respectively.
Japan has various levels of "core" inflation. Economists tend to focus on the actual core, excluding all food and energy. On this basis, inflation declined modestly, to 0.3% from 0.4% in February, thanks to slower inflation of recreational costs. Even in this measure, oil effects are present, through the transportation component.
Transport service consumers tend to be shielded from the full whack of energy price rises, but transport inflation tends to hold up for a few months after CPI energy inflation begins to subside. Energy inflation peaked in November, though, with transport inflation also beginning to fall in March.
We reckon, transport inflation likely will continue to fall, therefore, in coming months, though it should pick up again in Q3. Communication inflation leapt to 2.5% in March, after dragging for most of the last two years. But the jump was due to a drop in the base, which then reversed the following month. Communication prices could fall again, year-over-year in April. Overall, headline inflation will edge lower until Q3, when energy inflation will force the headline up again. Food deflation, however, will drag the headline back down by the year-end.
Core inflation likely will continue to trend up, over the year, though we see downside risks in the near term. The uptrend is in part thanks to transportation costs, but higher services inflation will also be a driver. Wage growth has continued to sustain an uptrend, and with capacity remaining tight, this will be passed on to the high street.
These data imply that the BoJ remains a long way from satisfying any criteria with regard to stable inflation at 2%. Though we think the BoJ will "adjust" policy in the near future, we reckon an "exit" is still beyond 2019. In short, the BoJ will have to address the shape of the yield curve and cannot afford to keep rates this low, as the Fed hikes. But we see no end to the accommodative stance in the next two years, unless financial disturbances take hold.
Cryptocurrency Daily Update: Bitcoin, Ethereum, Ripple, Bitcoin Cash and Litecoin
- Cryptocurrencies continue to remain in green across all bourses, except for Ripple
- Ripple falls nearly 1.50% by end of European session Monday
- Bitcoin, Ethereum, Bitcoin Cash and Litecoin gained 1-18%
BTC/USD (Bitcoin): The price of bitcoin started to approach the key psychological $9,000 level after days of dryness after the end of the tax season in the United States, which will now see the buy-back of this crypto asset, thus shooting prices to previous highs. At 10:40GMT, it was trading mild 0.15% higher at $8,917.00 on the Bitstamp exchange.
Technical Analysis Overview: Bitcoin prices have already breached the immediate resistance level seen at 8,423.67, and is closely eyeing the next resistance at 9,104.46 and R3 at 9,848.25. Meanwhile, the immediate support level is seen at 7,808.15 (trend-defining level) and S2 is eyed at 7,164.30.
ETH/USD (Ethereum): The world’s second-largest cryptocurrency in terms of market cap, Ethereum, also, followed the footsteps of its wider peer, jumping by a larger margin as compared to Bitcoin’s movement, following some relaxation as the U.S. Tax Day is over. At 10:45GMT, it was trading nearly 3% up at $636.55.
Technical Analysis Overview: The immediate resistance is seen at 703.83 and R2 at 743.67. Meanwhile, S1 shall be eyed at 572.32, S2 at 483.61 (trend-defining level) and S3 at 453.54.
XRP/USD (Ripple): The third most popular cryptocurrency, Ripple, however, showed up differently to its former peers, falling, even as sentiments improved in the digital currency market. At 10:50GMT, it was trading 1.40% lower at $0.87000.
Technical Analysis Overview: The immediate support level is seen at 0.80015, S2 at 0.72377 and S3 at 0.63456 (trend-defining level). Meanwhile, R1 is targeted at 0.93936, R2 at 0.98190 and R3 at 1.08472.
BCH/USD (Bitcoin Cash): The bitcoin cash remained indifferent to its Ripple counterpart and in line with other major peers, embracing the tinge of optimism after days of disappointment. It is now nearing the $1,500 psychological mark. At 10:55GMT, it was trading 18.30% higher at $1,393.70.
Technical Analysis Overview: Bitcoin Cash is eyeing its immediate resistance level at 1,563.60 and R2 is seen at 1,750.6. The immediate support is seen at 1,298.7, S2 at 1,020.4 and S3 at 788.3 on the Kraken exchange.
LTC/USD (Litecoin): Litecoin, also managed to beat the bears and is trading above the psychological level of 150.00, proportionately higher than bitcoin prices. At 11:00GMT, it was trading nearly 1% higher at $151.15.
Technical Analysis Overview: Litecoin is trading very close to its first resistance level seen at 156.72; R2 is seen at 175.93 and R3 at 191.80. Meanwhile, the immediate support shall be provided at 140.28, S2 at 131.56 (trend-defining level) and thereafter, 124.37 will act as the third support level.