- Japan Service sector growth strengthens to 19-month
- Business Activity Index improved to a 19-month high of 9,from a level of 51.3 in February.
- U.S goods and services deficit was $43.6 billion in February, down $4.6 billion from $48.2 billion in January.
- U.S Factory orders increased 1 percent in February after a 1.5 percent gain in January
The latest U.S economic data suggested the economy continues to grow at a moderate pace
Latest Japan data showed that service sector new work rose for an eighth month in succession. Although growth was a little softer, it nonetheless remained close to the highs recorded around the turn of the year.
On U.S, ADP Non-Farm Employment data, FOMC Meeting Minutes (April 05) and Non-farm payroll on April 06 are the key risk events scheduled this week.
Barclays: US nonfarm payrolls are expected to increase by 20 million in March, with an average hourly wage increase of 0.3%, up 2.6% year on year and unemployment is expected to fall by 0.1 percentage point to 4.6%.
The FOMC minutes should provide clarity on the extent of the discussion of balance sheet reduction.
ING – Mar FOMC minutes (Wed) will give some insight into the likelihood of a June rate hike (around 50% priced in).
According to Richard Cochinos and Ran Ren at Citi FX, “We expect the FOMC minutes will sounds more hawkish than either the March statement or February minutes. We also believe this is a majority view headed in. Surprises may include discussion on balance sheet normalization – with ‘some’ FOMC members (we count at least four in recent speeches) advocating for balance sheet reduction this year. On balance, we expect mild USD strength. Broad USD follow through will be dependent on the strength of Friday’s data”.
USDJPY- The cross is trading at 110.75 on Asia session today support finds between 110.25 and 110.00. Since two weeks the price manages to hold the 200Wsma at 110.10 below this 109.60 its 50Msma exist.The daily 200Dsma finds at 108.50.
Ahead of the multiple key risk events, trading range remains between 112.30 and 109.60 levels.