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Daily News Update


22 April 2024​

Monday​

On Monday, China is set to announce its 1-year and 5-year Loan Prime Rates. This update is anticipated to have a moderate impact on currency values. Investors and market watchers are closely monitoring these rates as they are key indicators of China’s monetary policy stance and can influence financial markets both domestically and globally.​



CNY - 1-y Loan Prime Rate​

The 1-year Loan Prime Rate is the benchmark interest rate at which commercial banks lend to households and businesses, set by the People's Bank of China to guide short-term interest rates as part of its monetary policy. Typically, a rate higher than forecasted is beneficial for the currency. This rate is crucial for traders since short-term interest rates are a primary factor in currency valuation. The rate is determined based on a weighted average of lending rates from 18 commercial banks, and traders often use this indicator to predict future rate changes.

In China, the one-year Loan Prime Rate (LPR), which serves as a market-based benchmark for lending rates, has remained stable at 3.45% according to the latest announcement from the National Interbank Funding Center. This decision to maintain the rate follows a period of significant monetary policy adjustments where the over-five-year rate was reduced last month by 25 basis points to 3.95%, its largest recent drop, aimed at supporting the property and credit markets. Despite these changes in longer-term rates, the one-year LPR has been kept constant to possibly assess the impact of previous adjustments on the economy. Stability in the one-year rate is crucial as it influences the day-to-day financial cost for businesses and individuals, thereby playing a key role in shaping the economic recovery trajectory. This approach reflects the People’s Bank of China's strategy to cautiously modulate short-term lending rates while considering broader economic recovery signals, as evidenced by recent positive data on retail sales, investment, and industrial output from the National Bureau of Statistics, suggesting a solid foundation for potential growth. The central bank's governor, Pan Gongsheng, also hinted at possible future reductions in the reserve requirement ratio, which might further influence short-term rates depending on evolving economic conditions.

TL;DR

  • China's one-year Loan Prime Rate (LPR) remains stable at 3.45%.
  • Over-five-year LPR was reduced by 25 basis points to 3.95% last month.
  • Stability in the one-year rate helps assess the impact of monetary policy adjustments.
  • Stable one-year LPR influences daily financial costs for businesses and individuals.
  • The People’s Bank of China maintains short-term rates while monitoring economic recovery.
  • Positive economic data reported: retail sales, investment, and industrial output.
  • Possible future cuts in the reserve requirement ratio hinted by central bank governor Pan Gongsheng.

The forecast for the 1-year Loan Prime Rate remains unchanged at 3.45%, consistent with the previous outcome.


CNY - 5-y Loan Prime Rate​

The 5-year Loan Prime Rate is a benchmark interest rate used by commercial banks primarily for mortgage loans, and it is set by the People's Bank of China as part of its monetary policy to influence short-term interest rates. Typically, an actual rate that is higher than the forecast is considered positive for the currency. This rate is crucial for traders as short-term interest rates are a fundamental factor in currency valuation, and they generally use this and other indicators to anticipate future rate adjustments. The rate is calculated based on a weighted average of lending rates from 18 commercial banks.

In China, the over-five-year Loan Prime Rate (LPR), crucial for setting mortgage rates, remained steady at 3.95 percent as reported by the National Interbank Funding Center, mirroring its previous level. This stability follows a significant reduction last month when the rate was cut by 25 basis points, marking the largest decrease in recent years aimed at boosting the property market and broader economic recovery. Such adjustments in the five-year LPR are part of China's strategic efforts to manage economic growth through monetary policy, as indicated by the recent steady figures which align with overall attempts to lessen financial burdens on businesses and individuals and encourage a sustainable recovery path.

TL;DR

  • Over-five-year Loan Prime Rate (LPR) in China steady at 3.95%.
  • Rate was reduced by 25 basis points last month, the largest recent cut.
  • Cut aimed to boost the property market and economic recovery.
  • Adjustments in LPR reflect efforts to manage growth via monetary policy.
  • Stability in rates helps reduce financial burdens and supports sustainable recovery.

The forecast remains consistent with the previous outcome, indicating a 5-year Loan Prime Rate of 3.95%.

The next updates for the 1-year and 5-year Loan Prime Rates are scheduled to be announced on Monday at 1:15 AM GMT.







Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.
 
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Daily News Update


23 April 2024​

Tuesday​

Tuesday is poised to be a vital "moving day" for financial markets, marked by several crucial data releases. The day starts with Japan's JFlash Manufacturing and Services PMI, expected to have a medium impact. This will be followed by high-impact PMI announcements from France and Germany, potentially influencing market dynamics significantly. The Euro Zone will also release its Flash Manufacturing and Services PMI, with a predicted medium impact. In addition, Great Britain and the United States are set to announce their respective Flash PMIs, anticipated to strongly affect the markets. The U.S. will further update on New Home Sales and the Richmond Manufacturing Index, both expected to have a moderate impact. These releases are likely to incite notable market volatility and could dictate market trends in the subsequent days.​



JPY - Flash Manufacturing PMI​

The Flash Manufacturing Purchasing Managers' Index (PMI) is a key economic indicator derived from a diffusion index based on surveys of approximately 400 purchasing managers in the manufacturing sector. It serves as a leading indicator of economic health because purchasing managers offer timely and relevant insights into the business conditions at their companies. Generally, a PMI score above 50.0 indicates industry expansion, whereas a score below 50.0 signifies contraction. The PMI is particularly noteworthy because a reading that exceeds forecasts usually benefits the currency value. This index is released monthly, around three weeks into the current month, and comes in two versions: Flash and Final. The Flash version, which was first introduced in May 2014, is released first and tends to have a greater impact due to its timeliness. Respondents in the survey evaluate various aspects of business activity including employment, production, new orders, prices, supplier deliveries, and inventories. This index is also referred to as the Jibun Bank Manufacturing PMI.

In March 2024, the au Jibun Bank Japan Manufacturing PMI indicated a slight improvement in factory conditions despite marking the tenth consecutive month of contraction with a score of 48.2, holding steady from preliminary estimates and up from February's low of 47.2, the weakest since August 2020. The decline in factory activity was the most modest since November, buoyed by less severe reductions in production and new orders, the latter of which decreased at the slowest pace in five months. Additionally, manufacturing employment grew for the first time in three months, achieving the strongest expansion since July, although work backlogs dropped nearly at a record pace in the ongoing 18-month period. Purchasing activity also declined less sharply than in previous months, and delivery times lengthened further due to disruptions in the Red Sea and Panama Canal. On the financial side, input costs rose at the slowest rate since February 2021, but selling prices climbed to a three-month peak. Despite the challenges, business sentiment remained optimistic, fueled by expectations of renewed domestic and global demand.

TL;DR
MetricDetail
PMI Score48.2 (tenth consecutive month of contraction, up from February's 47.2)
Factory ActivityLeast decline since November; less severe reductions in production and orders
New OrdersDecreased at slowest pace in five months
Manufacturing EmploymentGrew for first time in three months, strongest expansion since July
Work BacklogsDropped nearly at a record pace over last 18 months
Purchasing ActivityDeclined less sharply than previous months
Delivery TimesLengthened due to disruptions in Red Sea and Panama Canal
Input CostsRose at slowest rate since February 2021
Selling PricesReached a three-month high
Business SentimentRemained optimistic, driven by expectations of renewed domestic and global demand
The forecast for the Flash Manufacturing PMI suggests an improvement, with a projected reading of 48.9 compared to the previous outcome of 48.2.


JPY - Flash Services PMI​

The survey encompasses various sectors including transport and communication, financial intermediation, business services, personal services, computing and IT, as well as hotels and restaurants. To ensure accurate representation, each response is weighted based on the size of the company and the sector's contribution to the overall service sector output. This weighting method prioritizes feedback from larger companies, allowing them to have a more significant influence on the final index numbers than smaller companies. The results are displayed by each question asked, indicating the percentage of respondents who reported an improvement, deterioration, or no change compared to the previous month. An index is then calculated from these percentages where a score of 50.0 indicates no change from the previous month. Scores above 50.0 denote an improvement, while scores below 50.0 indicate a deterioration. The further the score deviates from 50.0, the stronger the indicated rate of change.

In March 2024, the au Jibun Bank Japan Services PMI was adjusted downward to a seven-month peak of 54.1 from a preliminary estimate of 54.9, which had been the highest in ten months. This adjustment still represents an improvement over February's index of 52.9, marking the 19th consecutive month of expansion within the service sector. This growth has been supported by increasing demand and a rise in customer numbers. Although the pace of employment growth moderated slightly from February, it continued to exceed the long-term average for the series. On the pricing side, input costs rose to a five-month high, driven primarily by increases in fuel, labor, and utilities prices, leading to a slight rise in selling prices. However, the rate of price inflation remained relatively stable compared to February. Business sentiment continued to be strong, fueled by optimism for a widespread economic recovery that could enhance customer demand.

TL;DR
MetricDetail
PMI ScoreAdjusted to 54.1 from preliminary 54.9, highest in seven months, up from February's 52.9
Consecutive Expansion19th consecutive month of expansion in the service sector
Demand and CustomersIncreased demand and rising customer numbers support growth
Employment GrowthModerated slightly from February but continued to exceed long-term average
Input CostsRose to a five-month high, driven by increases in fuel, labor, and utilities prices
Selling PricesSlight rise, with rate of price inflation remaining stable compared to February
Business SentimentStrong, fueled by optimism for a widespread economic recovery enhancing customer demand
The forecast for the Flash Services PMI is set at 54, slightly below the previous reading of 54.1.

According to the scoring system, any score above 50.0 signifies an improvement in conditions, while a score below 50.0 indicates a deterioration. Thus, despite the slight decrease, the forecasted index of 54 still reflects an overall improvement in the service sector.



The upcoming release of the Flash Manufacturing & Services PMI is scheduled for Tuesday at 12:30 AM GMT.


EUR – French Flash Manufacturing PMI​

The Purchasing Managers’ Index (PMI) is a monthly indicator of economic health for the manufacturing sector, calculated from surveys conducted with purchasing managers. This gauge reflects industry conditions, where a PMI above 50 suggests growth, and a value below 50 indicates decline. It features both “Flash” and “Final” versions; the “Flash” PMI often impacts markets more significantly as it is released earlier. As a critical leading indicator, the PMI offers insights into business conditions and sentiment, drawing on the perspectives of approximately 750 participants concerning employment, production, and other business activities.

In March 2024, the S&P Global France Manufacturing Purchasing Managers’ Index (PMI) initially recorded a downturn with a ‘Flash’ estimate of 45.8, indicating a continued contraction, but was later revised upward slightly to 46.2. This adjustment still reflects the 14th consecutive month of decline in the French manufacturing sector, down from February’s reading of 47.1. Despite the persistent downturn, the sector experienced the slowest decrease in output since the escalation of geopolitical tensions with Russia two years ago, aided by some firms managing backlogs and initiating restocking efforts. However, the contraction in new orders intensified, leading to job reductions by not renewing temporary contracts. While input costs rose, the increase in selling prices was the smallest in over three years. Looking forward, the sector remains optimistic, anticipating better economic conditions and a boost in both domestic and international demand in the next 12 months.

TL;DR
MetricDetail
PMI ScoreRevised to 46.2 from 'Flash' estimate of 45.8, indicating the 14th month of sector decline
ComparisonDown from February’s index of 47.1
Sector OutputSlowest decrease since geopolitical tensions escalated with Russia two years ago
Management ActionsSome firms managed backlogs and initiated restocking efforts
New OrdersContraction intensified, leading to job reductions by not renewing temporary contracts
PricingInput costs rose, but increase in selling prices was smallest in over three years
Business SentimentRemains optimistic, anticipating improved economic conditions and increased demand next year
The forecast for the French Flash Manufacturing PMI is reading 47, an increase from the previous actual of 46.2

The last time, the French Flash Manufacturing PMI was announced on the 21st of March, 2024. You may find the market reaction chart (EURUSD M5) below:

21-03-24-French-Flash-Manufacturing-PMI-EUR.jpg

EUR – French Flash Services PMI​

The Services Purchasing Managers’ Index (PMI) is a monthly diffusion index based on surveys from purchasing managers in the services sector, used to gauge the health of the industry. A PMI score above 50 indicates that the services sector is expanding, while a score below 50 suggests contraction. Introduced in March 2008, the “Flash” version of the PMI generally carries more impact than the “Final” release. As an important leading economic indicator, the Services PMI offers insights into business sentiment and market conditions through responses from approximately 750 managers, who provide data on employment, orders, and pricing.

In March 2024, the HCOB Flash France Services PMI initially reported a downturn, dropping to 47.8, signifying a continued contraction in the French services sector for the tenth consecutive month, below the expected forecast of 48.8. However, this figure was later revised upwards to 48.3, indicating a slightly less severe contraction than initially thought. The primary factors contributing to this persistent decline included reductions in activity and sales, driven by economic challenges and sustained inflationary pressures. Despite the downturn, there was a significant increase in employment, suggesting that companies are investing in their workforce to prepare for future demands. Additionally, input prices cooled to a 31-month low but remained high due to ongoing salary increases, while output prices decelerated. Norman Liebke from Hamburg Commercial Bank highlighted a delayed economic recovery, expected to continue into at least the second quarter. Nonetheless, there was a notable improvement in business confidence, supported by an optimistic outlook for the economy, which might indicate a gradual shift toward recovery despite the ongoing challenges.

TL;DR
MetricDetail
PMI ScoreRevised to 48.3 from initial 47.8, indicating a less severe contraction than expected
Consecutive Contraction10th consecutive month of contraction in the services sector
Primary FactorsReductions in activity and sales due to economic challenges and sustained inflation
EmploymentSignificant increase, indicating investment in workforce for future demands
Input PricesCooled to a 31-month low but remained high due to ongoing salary increases
Output PricesDecelerated
Economic OutlookNorman Liebke noted a delayed economic recovery expected to continue into at least the next quarter
Business ConfidenceImproved, supported by an optimistic outlook for the economy
The forecast for the French Flash Services PMI is reading 49.1, an increase from the previous actual of 48.3.

The next release of the French Flash Manufacturing and Services PMI is scheduled for Tuesday at 7:15 AM GMT.

The last time, the French Flash Services PMI was announced on the 21st of March, 2024. You may find the market reaction chart (EURUSD M5) below:
21-03-24-French-Flash-Services-PMI-EUR.jpg


EUR – German Flash Manufacturing PMI​

The Manufacturing Purchasing Managers’ Index (PMI) is a critical monthly indicator calculated from surveys conducted with 800 purchasing managers, designed to reflect the state of the manufacturing sector. Scores above 50 on this index suggest the sector is expanding, while scores below 50 indicate contraction. The PMI is published in two iterations, the “Flash” and the “Final,” which are released about a week apart. The “Flash” version, first introduced in March 2008, generally carries more weight. As a primary economic indicator, the PMI provides valuable insights into the manufacturing landscape by evaluating aspects such as employment, production, and new orders, based on input from professionals at the forefront of industry procurement.

In March 2024, the HCOB Flash Germany Manufacturing PMI initially reported a significant contraction in the manufacturing sector with a reading of 41.6, marking a five-month low and a decrease from February’s 42.5. This initial figure was later revised upwards slightly to 41.9, although it still indicated a strong deterioration in manufacturing conditions and the most considerable contraction in the past five months. The sector continued to struggle with faster declines in employment and stocks of purchases and a notable improvement in supplier delivery times, which suggested a diminishing impact from previous disruptions such as the Red Sea shipping issues. Despite the tough conditions, there were slower reductions in new orders and output, and a softening in the rate of decline for average purchasing costs, which was the weakest since the previous March. Conversely, average factory gate charges fell more sharply due to intense competition for new work. Amid these challenges, the updated data also reflected a slight improvement in sector sentiment, with manufacturers showing renewed optimism about growth prospects over the next 12 months.

TL;DR
MetricDetail
PMI ScoreRevised to 41.9 from initial 41.6, marking the most considerable contraction in the past five months
ComparisonDecrease from February's 42.5
EmploymentFaster declines noted in employment and stocks of purchases
Supplier Delivery TimesImprovement, suggesting reduced impact from previous disruptions like Red Sea shipping issues
Order and Output ReductionsSlower reductions in new orders and output
Purchasing CostsSoftening in the rate of decline, weakest since the previous March
Factory Gate ChargesFell more sharply due to intense competition for new work
Sector SentimentSlight improvement, with renewed optimism about growth prospects over the next 12 months
The forecast for the German Flash Manufacturing PMI is reading 42.9, an increase from the previous actual of 41.9.

The last time, the German Flash Manufacturing PMI was announced on the 21st of March, 2024. You may find the market reaction chart (DE30 M5) below:
21-03-24-German-Flash-Manufacturing-PMI-EUR.jpg


EUR – German Flash Services PMI​

The Services Purchasing Managers’ Index (PMI) is an essential monthly diffusion index based on surveys of 800 purchasing managers, which assesses the performance of the services sector. A PMI score above 50 denotes expansion, whereas a score below 50 indicates contraction. Released in both “Flash” and “Final” versions about a week apart, the “Flash” release, first introduced in March 2008, is generally considered more impactful. As a prominent economic indicator, the PMI provides insights into the sector’s health by capturing purchasing managers’ evaluations of key business variables such as employment, orders, and prices.

In March 2024, the HCOB Flash Germany Services PMI initially indicated near-stagnation in the services sector with a preliminary reading of 49.8, up from February’s 48.3 and the highest in six months, suggesting the sector was nearing stabilization despite some ongoing challenges. This figure was subsequently revised upward to 50.1, marking the first actual stabilization in the sector after six months of contraction. The revised PMI reflects slight improvements in client interest and efforts in working through existing backlogs, coupled with strategic hiring that contributed to sustained job growth. While wage pressures continued to elevate input costs, there was a notable slowdown in the rates of inflation for both input prices and output charges compared to previous months. The inflow of new business saw its smallest decline since July, with a particularly moderate reduction in new business from abroad, signaling improving conditions. Moreover, business optimism reached its highest level since February 2022, driven by increasing confidence in a potential uplift in market conditions over the coming year.

TL;DR
MetricDetail
PMI ScoreRevised to 50.1 from initial 49.8, marking the first actual stabilization after six months of contraction
Previous ComparisonUp from February’s 48.3, highest in six months
Client Interest & BacklogsSlight improvements in client interest and efforts in working through backlogs
EmploymentStrategic hiring contributed to sustained job growth
Wage PressuresContinued to elevate input costs, though inflation rates for input prices and output charges slowed
New Business InflowSmallest decline since July, with moderate reduction in new business from abroad
Business OptimismHighest since February 2022, driven by confidence in market conditions improvement over the coming year
The forecast for the German Flash Services PMI is reading 50.7, an increase from the previous actual of 50.1.

The upcoming German Flash Manufacturing & Services PMI is set to be released on Tuesday at 7:30 AM GMT.

The last time, the German Flash Manufacturing Services PMI was announced on the 21st of March, 2024. You may find the market reaction chart (DE30 M5) below:
21-03-24-German-Flash-Services-PMI-EUR.jpg

EUR – Flash Manufacturing PMI​

The HCOB Eurozone Manufacturing PMI is a critical diffusion index derived from a survey of approximately 5,000 purchasing managers across the manufacturing sector. It is released monthly, usually three weeks into the current month. A PMI above 50 signifies expansion within the industry, whereas below 50 indicates contraction. This index is published in two forms: the “Flash” and the “Final.” The Flash version, first introduced in June 2007, is released about a week before the Final and typically has a greater impact due to its timeliness. The PMI is valued by traders because it’s a leading indicator of economic health—purchasing managers offer up-to-date and relevant insights on business conditions like employment, production, new orders, prices, supplier deliveries, and inventories. Generally, a PMI reading that exceeds the forecast suggests a positive outlook for the currency, reflecting stronger economic activity.

In March 2024, the HCOB Flash Eurozone Manufacturing PMI initially indicated a significant contraction in the manufacturing sector with a preliminary reading of 45.7, marking a noticeable decline from the previous month’s figure and reflecting ongoing challenges such as supplier delivery delays and changes in stocks of purchases related to earlier disruptions in the Suez Canal. However, this figure was later revised upward to 46.1. Despite this slight increase in the revised PMI, the reading still represented a three-month low for the sector. This revision suggests a marginal improvement in conditions compared to the initial estimate, including a slower contraction in manufacturing output, which has been declining for twelve consecutive months but at a reducing pace, reaching its slowest rate of decrease since April 2023. New orders and export sales also showed less severe declines than initially feared, with export sales recording their smallest drop in nearly two years, hinting at a potential easing of international market weaknesses. Business confidence in the manufacturing sector improved, reaching a high not seen in nearly a year, although growth expectations remained subdued, continuing to impact employment negatively within the sector.

TL;DR
MetricDetail
PMI ScoreRevised to 46.1 from initial 45.7, marking a three-month low despite slight improvement
Previous ComparisonNoticeable decline from the previous month's figure
Manufacturing OutputSlower contraction, slowest rate of decrease since April 2023
New Orders & Export SalesLess severe declines than initially feared, with export sales having smallest drop in nearly two years
Business ConfidenceImproved to a high not seen in nearly a year, but growth expectations remained subdued
Employment ImpactContinued negative impact on employment due to subdued growth expectations
The projected forecast for the European Economic Area Flash Manufacturing PMI is set at 46.5, showing a slight increase from the previous figure of 46.1.


EUR – Flash Services PMI​

The HCOB Eurozone Services PMI is a crucial diffusion index derived from a survey of approximately 5,000 purchasing managers in the services industry, released monthly around the third week. Scoring above 50 indicates sector expansion, while below 50 signals contraction. The index is published in two editions, “Flash” and “Final,” with the “Flash” version—first reported in June 2007—being the earliest and most impactful release. This index serves as a leading economic indicator as it reflects real-time business reactions to market conditions, providing insights into employment, production, new orders, prices, supplier deliveries, and inventory levels. The PMI’s significance to traders lies in its ability to provide the most current and relevant evaluation of economic health, where an ‘Actual’ score exceeding the ‘Forecast’ is typically seen as positive for the currency.

In March 2024, the HCOB Flash Eurozone Services PMI showed a notable improvement, initially reported at 51.1 and later revised upward to 51.5, marking a significant rebound from February’s reading of 50.2. This increase indicates a stronger recovery in the services sector, with March’s figure representing the first expansion in service sales for the first time in nine months, primarily driven by a boost in domestic market orders. The sector also saw a continuation of job growth for the eighth month in a row, albeit at a slightly slower rate than in February, yet still above the long-term average. Additionally, the cost pressures that have been a concern in recent months showed signs of easing, with input costs rising at the slowest pace in eight months and output charges increasing at the most modest rate since November. Looking forward, the service providers’ outlook on business activity improved for the fourth consecutive month, reflecting growing optimism about future economic conditions.

TL;DR
MetricDetail
PMI ScoreRevised to 51.5 from initial 51.1, marking a significant rebound from February’s 50.2
Service SalesFirst expansion in nine months, primarily driven by boost in domestic market orders
EmploymentContinued growth for the eighth month, albeit at a slightly slower rate than February
Cost PressuresEasing signs with input costs rising at slowest pace in eight months; modest rise in output charges
Business OutlookImproved for fourth consecutive month, reflecting growing optimism about future economic conditions
The forecast for the European Economic Area Flash Services PMI is reading 51.8, a slight increase from the previous actual of 51.5.

The upcoming Flash Manufacturing and Services PMI is set to be released on Tuesday at 8:00 AM GMT.


GBP – Flash Manufacturing PMI​

The Manufacturing Purchasing Managers’ Index (PMI) is a vital diffusion index derived from surveys of approximately 650 purchasing managers, providing a monthly assessment of the manufacturing sector’s performance. A PMI score above 50 indicates the sector is expanding, while a score below 50 indicates contraction. The index is published in two versions: “Flash” and “Final.” The “Flash” version, which was first introduced in November 2019, typically has a greater impact because it is released earlier. As an important leading economic indicator, the PMI offers prompt insights into market conditions by analyzing purchasing managers’ perspectives on key business variables such as employment, production, and new orders.

In March 2024, the UK manufacturing sector exhibited signs of recovery, with the S&P Global Flash UK Manufacturing PMI initially reported at 49.9, up from February’s 47.5, and later revised upward to 50.3, marking the first expansion in the sector since July 2022. This turnaround is supported by the fastest rise in new orders since May 2022 and the first increase in production levels in a year, suggesting the end of a prolonged slump. The improvement was particularly notable in the consumer goods sector, which helped offset declines in other areas. Despite challenges such as high borrowing costs and supply chain disruptions, particularly from shipping issues in the Red Sea, optimism among manufacturers soared to an 11-month high, fueled by hopes for better supplier conditions and a global manufacturing revival. Although input costs remained high, reflecting ongoing inflationary pressures, the increase in output charges was modest, indicating that manufacturers are maintaining cautious pricing strategies in a competitive environment. This budding recovery in manufacturing, alongside continuous growth in the services sector, points to the potential for a broader economic rebound as the UK ends its strongest economic quarter since mid-2023.

TL;DR
MetricDetail
PMI ScoreRevised to 50.3 from initial 49.9, marking the first expansion since July 2022
New OrdersFastest rise since May 2022, indicating recovery
Production LevelsFirst increase in a year, ending a prolonged slump
Sector PerformanceNotable improvement in consumer goods sector offsetting declines elsewhere
ChallengesHigh borrowing costs, supply chain disruptions from Red Sea shipping issues
Business OptimismSoared to an 11-month high due to better supplier conditions and global manufacturing revival hopes
Pricing StrategiesHigh input costs persist; modest increase in output charges reflecting cautious pricing strategies
Economic OutlookSigns of broader economic rebound, supported by continuous growth in services sector
The forecast for the British Flash Manufacturing PMI is reading 50.5, a slight increase from the previous actual of 50.3.

The last time, the British Flash Manufacturing PMI was announced on the 21st of March, 2024. You may find the market reaction chart (EURGBP M5) below:
21-03-24-Flash-Manufacturing-PMI-GBP.jpg


GBP – Flash Services PMI​

The Services Purchasing Managers’ Index (PMI) is a crucial monthly diffusion index based on surveys from around 650 purchasing managers that assesses the health of the services sector. A score above 50 on this index indicates expansion, while a score below 50 signifies contraction. The PMI is released in two formats: “Flash” and “Final,” with the “Flash” version, which was first introduced in November 2019, generally having a greater impact because of its earlier release date. As a primary economic indicator, the Services PMI offers early insights into the economic environment by reflecting the views of purchasing managers on essential business aspects such as employment, order volumes, and pricing.

In March 2024, the UK services sector saw a moderate slowdown in growth, with the S&P Global Flash UK Services PMI initially recorded at 53.4, down from February’s 53.8, and later revised downward to 53.1. This revision marked the slowest expansion in four months, reflecting the ongoing financial pressures on households which have impacted their disposable income and, consequently, demand within the service sector. Despite these challenges, the sector managed to sustain a relatively high growth rate, supported by resilient business and consumer spending and continued job intake, especially in firms optimistic about potential rate cuts by the Bank of England. The rise in new work during the month contributed positively, even as companies grappled with high input costs driven by rising salaries and increased transportation expenses. Service firms responded to these cost pressures by raising their output charges at the fastest rate in eight months, although overall confidence in the sector was tempered by concerns over political uncertainty and the broader UK economic outlook as the country recovers from a technical recession in the latter half of 2023.

TL;DR
MetricDetail
PMI ScoreRevised to 53.1 from initial 53.4, marking the slowest expansion in four months
Previous ComparisonDown from February’s 53.8
Sector ImpactFinancial pressures on households affected disposable income and demand
Growth SupportSustained by resilient business and consumer spending, continued job intake
Rate Cut OptimismSome firms optimistic about potential Bank of England rate cuts
New Work IncreasePositive contribution from rise in new work despite high input costs
Cost DriversRising salaries and increased transportation expenses
Output ChargesRaised at the fastest rate in eight months to respond to cost pressures
Sector ConfidenceTempered by political uncertainty and concerns over the broader economic outlook
The forecast for the British Flash Services PMI is reading 53.3, a slight increase from the previous actual of 53.1.

The upcoming Flash Manufacturing and services PMI is set to be released on Tuesday at 8:30 AM GMT.

The last time, the British Flash Services PMI was announced on the 21st of March, 2024. You may find the market reaction chart (GBPUSD M5) below:
21-03-24-Flash-Services-PMI-GBP.jpg


USD – Flash Manufacturing PMI​

This index is calculated from a monthly survey of approximately 800 purchasing managers in the manufacturing sector and serves as a key barometer for industry health and economic direction. Typically conducted in the third week of each month, the survey results in two releases: the Flash and the Final report, with the Flash version, launched in May 2012, generally more influential due to its timeliness. A PMI above 50 indicates expansion within the industry, whereas a reading below 50 denotes contraction. As a vital leading economic indicator, this index provides immediate insights into current business conditions such as employment, production, new orders, prices, supplier deliveries, and inventory levels, showcasing the quick responsiveness of purchasing managers to changing market dynamics.

In March 2024, the S&P Global Flash US Manufacturing PMI initially indicated a robust improvement in the sector, recording a 21-month high of 52.5, up from February’s 52.2, signaling strong gains in output and employment. However, this figure was later revised down to 51.9. Despite the downward revision, the manufacturing sector continued to drive US economic expansion, with production hitting a 22-month high and job creation rates accelerating. The original surge was partly due to strategic adjustments in inventory and purchasing activities, with firms reducing stocks more sharply than at any point since the previous November to manage costs and improve cash flow. This scaling back of inventories coincided with the fastest rise in input costs in six months, leading to significant increases in selling prices—the most substantial in nearly a year. While challenges such as inflationary pressures persist, the sector remains a cornerstone of the broader economy’s strength, with ongoing optimism supported by expectations of continued economic improvement, strategic marketing, and enhanced capacity.

TL;DR
MetricDetail
PMI ScoreRevised to 51.9 from initial 52.5, still a robust indicator of sector improvement
Previous ScoresUp from February's 52.2, reaching a 21-month high
Production & EmploymentProduction at a 22-month high, with accelerated job creation rates
Inventory & PurchasingStrategic reductions in stock to manage costs, sharpest since previous November
Input Costs & PricesFastest rise in input costs in six months, leading to significant increases in selling prices
Economic RoleSector remains key to US economic expansion, despite challenges like inflation
Optimism & StrategySupported by expectations of continued economic improvement, strategic marketing, and capacity
The forecast for Flash Manufacturing PMI indicates a value of 52, slightly higher than the previous outcome of 51.9.

The last time, the US Flash Manufacturing PMI was announced on the 21st of March, 2024. You may find the market reaction chart (US500 M5) below:

21-03-24-Flash-Manufacturing-PMI-USD.jpg

USD – Flash Services PMI​

This index, derived from a monthly survey of around 400 purchasing managers, assesses the economic health of the service sector through a diffusion index. Conducted typically in the third week of each month, a score above 50 on this index indicates expansion, whereas below 50 suggests contraction. The index is published in two editions, “Flash” and “Final,” with the “Flash” version, launched in November 2013, often having a greater impact due to its earlier release. As a critical economic indicator, this index quickly captures business responses to changing market conditions, providing essential insights from purchasing managers on various business aspects such as employment, production, new orders, prices, deliveries, and inventories.

In March 2024, the U.S. Services Sector saw a slowdown in growth, with the Flash U.S. Services Business Activity Index falling to a three-month low of 51.7 from February’s 52.3, according to S&P Global. Despite this, the manufacturing sector experienced significant growth, with the Flash U.S. Manufacturing Output Index reaching a 22-month high of 54.9, helping to keep the overall U.S. business activity robust with a Composite Output Index of 52.2. Employment rates and business confidence soared, hitting the highest levels of 2024, driven by positive economic forecasts and expansion plans. However, the economy faced challenges from rising inflationary pressures, with input costs increasing at the fastest rate in six months and selling prices seeing the sharpest inflation in nearly a year. Chris Williamson of S&P Global highlighted the resilience of the U.S. economy, supported by ongoing growth in both manufacturing and services, though the service sector’s growth has moderated amidst aggressive Federal Reserve rate hikes.

TL;DR
Sector/IndexDetail
Services Business Activity IndexFell to 51.7, a three-month low, from February's 52.3
Manufacturing Output IndexSignificant growth to a 22-month high at 54.9
Composite Output IndexRemained robust at 52.2 despite service slowdown
Employment & ConfidenceEmployment rates and business confidence at 2024 highs, driven by positive economic forecasts
Inflation ChallengesInput costs and selling prices increased sharply, fastest rate in six months and nearly a year, respectively
Economic OverviewChris Williamson highlighted the U.S. economy's resilience with growth in manufacturing and services despite service moderation
The forecast for Flash Services PMI suggests a reading of 51.8, a marginal increase from the previous outcome of 51.7.

The upcoming Flash Manufacturing and Services PMI is set to be released on Tuesday at 1:45 PM GMT.

The last time, the US Flash Services PMI was announced on the 21st of March, 2024. You may find the market reaction chart (GBPUSD M5) below:
21-03-24-Flash-Services-PMI-USD.jpg


USD – New Home Sales​

The Annualized New Home Sales metric reports the monthly sales of new single-family homes, projected on an annual basis and released on the 17th business day after the month ends. This indicator is crucial for traders as it acts as a leading measure of economic health. The sale of a new home triggers a wide-ranging economic activity, including the purchase of home furnishings and appliances, mortgage issuance by financial institutions, and payments to brokers who facilitate these transactions. As such, this metric plays a key role in evaluating the overall economic condition.

In their latest report, the U.S. Census Bureau and the Department of Housing and Urban Development revealed that February 2024 witnessed a slight dip in new single-family home sales to a seasonally adjusted annual rate of 662,000, just below January’s revised figure of 664,000. Despite this minor decrease, sales have surged by 5.9% compared to February of the previous year, closely mirroring pre-pandemic sales levels. The inventory of unsold new homes has slightly increased to 463,000, indicating an 8.4-month supply at the current sales pace, a figure that significantly exceeds the typical market equilibrium range of 4 to 6 months. This data suggests a larger-than-normal stockpile of homes available for sale, categorically broken down into homes not yet started, those under construction, and completed units—a classification method adopted by the Census Bureau since 1973.

TL;DR
MetricDetails
Sales RateFebruary sales at a seasonally adjusted annual rate of 662,000; slight decrease from January’s 664,000
Yearly ComparisonSales increased by 5.9% compared to February of the previous year
Inventory LevelsInventory of unsold homes rose to 463,000, indicating an 8.4-month supply at current sales pace
Supply ContextCurrent supply significantly exceeds the normal market equilibrium of 4 to 6 months
Inventory BreakdownHomes categorized as not yet started, under construction, and completed units
Historical ContextClassification method has been used by the Census Bureau since 1973
The forecast for New Home Sales indicates 68,000 units, compared to the previous figure of 662,000 units.

The next New Home Sales is scheduled for release on Tuesday at 2:00 PM GMT.


USD – Richmond Manufacturing Index​

The Richmond Manufacturing Index is a composite measure generated from a survey of around 55 manufacturers in the Richmond area. It is released monthly on the fourth Tuesday of each month. This index assesses various business conditions such as shipments, new orders, and employment. Values above 0 signify improving conditions, while those below 0 suggest deterioration. Although the index provides valuable insights, its impact is typically limited because of the existence of earlier regional manufacturing indicators.

In March, the Federal Reserve Bank of Richmond reported a slowdown in Fifth District manufacturing activity, with the composite manufacturing index dropping from -5 in February to -11. This decline was led by significant drops in shipments, new orders, and a stagnation in employment levels. Despite mixed feelings about current local business conditions, firms showed increased optimism for future prospects. However, challenges persisted with declining backlogs, negative vendor lead times, and a sharp fall in capacity utilization. Additionally, both the growth rates of prices paid and received by firms decreased, with expectations for these rates to further moderate in the coming year.

TL;DR
MetricDetails
Composite IndexDropped to -11 from February’s -5
Key ComponentsSignificant drops in shipments, new orders; stagnation in employment levels
Local Business ConditionsMixed current feelings but increased optimism for future prospects
Operational ChallengesDeclining backlogs, negative vendor lead times, sharp fall in capacity utilization
PricesDecreased growth rates of prices paid and received; expectations for further moderation
The forecast for the Richmond Manufacturing Index indicates a value of -8, an improvement from the previous outcome of -11.

The next Richmond Manufacturing Index is set to be released on Tuesday at 2:00 PM GMT.








Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.
 

Daily News Update


24 April 2024​

Wednesday​

On Wednesday, significant economic data from around the world is set to be released, likely influencing global market dynamics. Starting with Australia, the highly anticipated Consumer Price Index (CPI) will be released, followed by Germany's Ifo Business Climate Index, which gauges business sentiment in Europe's largest economy and is expected to have a moderate market impact. Later, North America will come into focus as Canada publishes its month-to-month Core Retail Sales and Retail Sales data, while the United States reports on Core Durable Goods Orders and Durable Goods Orders. Additionally, Crude Oil Inventories will be updated, expected to moderately affect the markets, completing a day filled with crucial economic updates.​



AUD – CPI q/q​

The Consumer Price Index (CPI), measuring changes in prices of consumer goods and services, is a critical economic indicator released quarterly, about 25 days after each quarter ends. An ‘Actual’ CPI that surpasses the ‘Forecast’ generally benefits the relevant currency. Although released later than similar data from other countries, the CPI is the primary measure of consumer inflation and frequently influences market dynamics. It is pivotal for traders as it reflects the bulk of overall inflation, crucial for currency valuation. Central banks may raise interest rates in response to rising inflation, as indicated by the CPI, which is derived by comparing the average prices of sampled goods and services with previous figures.

In December 2023, Australia’s Consumer Price Index (CPI) rose by 0.6% from the previous month, signaling a subtle shift in the nation’s inflation trends. Historical data from 1950 to 2023 shows that Australia’s monthly inflation rate has averaged 1.2%. The inflation rate reached its highest at 7.55% in the fourth quarter of 1951, indicating a period of significant economic volatility. On the other hand, the lowest point was recorded in the second quarter of 2020, with the CPI dropping by -1.9%, reflecting the considerable economic impacts during that time.

TL;DR
DescriptionData Point
Recent CPI Change+0.6%
Average Monthly Inflation Rate1.2%
Highest Recorded Inflation Rate7.55%
Lowest Recorded Inflation Rate-1.9%
The forecast for the CPI q/q suggests a modest increase from 0.6% to 0.7% compared to the previous figure.

The last time, the Australian CPI q/q was announced on the 31st of January, 2024. You may find the market reaction chart (AUDUSD M5) below:
31-01-2024-CPI-qq-AUD.jpg


AUD – CPI y/y​

The Monthly Consumer Price Index (CPI) Indicator, which measures the change in the price of goods and services purchased by consumers, is released monthly, typically about 25 days after the month ends. An ‘Actual’ value exceeding the ‘Forecast’ positively impacts the currency. Unique for being one of the few non-seasonally adjusted figures, this indicator has been reported since October 2022. The CPI is crucial for traders as it represents a significant portion of overall inflation, which is vital for currency valuation because rising prices may compel central banks to increase interest rates to meet their inflation containment goals. The index is calculated by sampling the average prices of various goods and services and comparing them to previous samplings.

The monthly Consumer Price Index (CPI) rose by 3.4% in the year to February, mirroring the increase seen in January, with notable spikes in the cost of housing (4.6%), food and non-alcoholic beverages (3.6%), alcohol and tobacco (6.1%), and a significant surge in insurance and financial services (8.4%). Excluding volatile items like fruit, vegetables, and automotive fuel, the CPI saw a more modest increase of 3.9%. The housing sector felt the pressure, with new dwelling prices climbing by 4.9% due to rising labor and material costs, and rents soaring by 7.6%, driven by tight rental markets. While electricity prices saw a marginal increase of 0.3% thanks to rebates, gas prices dipped by 2.4%, marking a second month of deflation. The report also highlighted a 16.5% jump in insurance costs, marking the highest annual increase since the CPI’s inception, largely due to rising reinsurance and claim costs. Automotive fuel prices rose by 4.1%, driven by higher wholesale prices, while education fees continued their upward trend with a 5.1% increase, attributed to hikes in primary, secondary, and tertiary education fees.

TL;DR
CategoryYearly Change (to February)Notes
Overall CPI+3.4%Same increase as January
Housing+4.6%Due to rising labor and material costs
Food and Non-Alcoholic Beverages+3.6%-
Alcohol and Tobacco+6.1%-
Insurance and Financial Services+8.4%Highest annual increase since CPI inception
Core CPI (Excluding Volatiles)+3.9%Excludes fruit, vegetables, and automotive fuel
New Dwelling Prices+4.9%-
Rents+7.6%Driven by tight rental markets
Electricity Prices+0.3%Benefited from rebates
Gas Prices-2.4%Marked a second month of deflation
Insurance Costs+16.5%Due to rising reinsurance and claim costs
Automotive Fuel Prices+4.1%Influenced by higher wholesale prices
Education Fees+5.1%Increases in primary, secondary, and tertiary education fees
The forecast for the CPI y/y indicates a rate of 3.4%, a decrease from the previous year’s figure of 4.1%.

The last time, the Australian CPI y/y was announced on the 31st of January, 2024. You may find the market reaction chart (AUDUSD M5) below:
31-01-2024-CPI-yy-AUD.jpg


AUD – Trimmed Mean CPI q/q​

The Australian Bureau of Statistics releases the Consumer Price Index (CPI) quarterly, measuring the price changes of a standard basket of goods and services purchased by households. The quarter-over-quarter (QoQ) CPI assesses changes against the previous quarter. A key component of this index is the trimmed mean CPI, which calculates underlying inflation by averaging the middle 70% of the CPI component price changes, thereby excluding the most volatile 30%. This method helps provide a clearer view of inflation trends. Generally, a higher trimmed mean CPI suggests bullish prospects for the Australian Dollar (AUD), while a lower figure indicates bearish conditions.

In a notable shift, Australia’s Trimmed Mean Consumer Price Index (CPI) for the quarter-on-quarter measurement saw a decrease to 0.8% in the final quarter of 2023, down from 1.2% in the preceding third quarter. Over the span from 2002 to 2023, the Trimmed Mean CPI in Australia has maintained an average increase of 0.67% per quarter. The index reached its peak at 1.8% during the third quarter of 2022, marking the highest inflation rate in this period. Conversely, the lowest point was recorded in the second quarter of 2020, when the Trimmed Mean CPI showed no change, reflecting the economic impacts during that time frame.

TL;DR
DescriptionData PointPeriod
Recent Trimmed Mean CPI Change0.8%Q4 2023
Previous Quarter Trimmed Mean CPI Change1.2%Q3 2023
Average Quarterly Trimmed Mean CPI0.67%2002-2023
Highest Recorded Trimmed Mean CPI1.8%Q3 2022
Lowest Recorded Trimmed Mean CPI0%Q2 2020
The forecast for the Trimmed Mean CPI q/q indicates that it will remain steady at 0.8%, unchanged from the previous figure.

The upcoming CPI announcements for Australia is scheduled for release on Wednesday at 1:30 AM GMT.

The last time, the Australian Trimmed Mean CPI q/q was announced on the 31st of January, 2024. You may find the market reaction chart (AUDUSD M5) below:
31-01-2024-Trimmed-Mean-CPI-qq-AUD.jpg


EUR – German Ifo Business Climate​

The German Ifo Business Climate Index is a composite measure derived from a survey of approximately 9,000 businesses in sectors such as manufacturing, construction, wholesale, services, and retail. Released monthly, about three weeks into the current month, the index gauges economic health through business sentiment, reflecting how businesses perceive their current situation and the outlook for the next six months. A reading that exceeds forecasts typically benefits the currency as it indicates positive business sentiment, which can be a precursor to increased economic activity, including spending, hiring, and investment. This leading indicator is essential for traders as it provides early insights into the economic direction.

In March, German business sentiment, as measured by the Ifo business climate index, showed unexpected improvement, rising to 87.8 and offering a glimmer of hope for Europe’s largest economy. Despite this positive shift, driven by less pessimistic expectations and improved assessments of current business situations, experts caution that this is unlikely to avert a looming recession. Germany, which experienced a 0.3% GDP contraction in the last quarter of the previous year, is anticipated to face another technical recession in the early part of this year. While some indicators, like the HCOB German Flash Composite PMI, suggest a slight easing in economic downturn with the service sector nearing stabilization, analysts like ING’s Carsten Brzeski remain guarded, noting that the current improvement is still significantly lower than previous highs and that any recovery this year is expected to be tepid amidst challenges like weak global demand and high inflation.

TL;DR
IndicatorValueComments
Ifo Business Climate Index (March)87.8Shows improvement, yet below past highs
Recent GDP Growth (Q4 Previous Year)-0.3%Indicates contraction
Expected Economic ConditionTechnical Recession ExpectedEarly this year predicted to face recession
HCOB German Flash Composite PMINear StabilizationSlight easing in downturn, service sector improving
Analyst Insight (Carsten Brzeski, ING)CautiousRecovery expected to be tepid amid various challenges
Current Business SituationImprovedLess pessimistic view leading to a better index score
Economic ChallengesHighWeak global demand, high inflation
The forecast for the German Ifo Business Climate Index suggests a rise to 88.9, up from the previous reading of 87.8.

The next German Ifo Business Climate is set to be announced on Wednesday at 8:00 AM GMT.


CAD – Retail Sales Ex Autos m/m​

Core Retail Sales are calculated each month and typically announced around 50 days after the month ends. This metric tracks the variation in total value of sales from retail sectors, excluding automobile sales. Automobile sales, which make up roughly 20% of all retail sales, are known for their considerable variability and can mask the actual trends in consumer spending. Therefore, by excluding these sales, Core Retail Sales offer a clearer view of the fundamental spending behaviors, offering key insights into the consumer market and the overall economic condition without being skewed by the unpredictable automobile industry.

In January 2024, Canadian retail sales excluding automobiles experienced a 0.5% month-over-month increase, slightly down from a 0.6% gain the previous month but well above the expected 0.4% decline, according to Statistics Canada. This performance indicates a robust start to the year for the retail sector, driven by strong sales in specialized areas such as sporting goods, hobby retailers, and building materials. The data suggests a rebound from December’s weaknesses and points to sustained consumer confidence and spending resilience across non-automotive retail sectors despite ongoing economic uncertainties.

TL;DR
DescriptionData PointComments
Retail Sales Excluding Automobiles (Jan 2024)+0.5% Month-over-MonthIncrease, despite expectations of a -0.4% decline
Comparison to Previous MonthDown from +0.6%Slight decrease but still strong
Strong Performing SectorsSporting goods, hobbies, building materialsKey drivers of retail strength
Overall Consumer ConfidenceHighIndicates resilience in spending amidst uncertainties
The forecast for the Canadian Retail Sales Excluding Autos m/m is reading 0.2%, a slight decline from the previous actual of 0.5%


CAD – Retail Sales m/m​

Retail Sales figures are released about 50 days following the end of each month and measure the total value of sales at the retail level. This key metric is crucial for traders because it acts as the main indicator of consumer spending, which makes up the bulk of economic activity.

In January, Canada’s retail sales experienced a slight decrease of 0.3% to $67.0 billion, with reductions occurring in three of nine subsectors, predominantly led by a 2.4% decline in the motor vehicle and parts dealers sector. Despite this overall drop, core retail sales, which exclude sales from gasoline stations, fuel vendors, and motor vehicle and parts dealers, saw a modest increase of 0.4%. This was the second consecutive month of growth in core retail sales, driven mainly by significant gains in the sporting goods, hobby, musical instrument, book, and miscellaneous retailers sector (+3.0%), as well as in the building material and garden equipment and supplies dealers sector (+2.2%). In contrast, food and beverage retailers witnessed a notable decrease of 0.9%. Regionally, sales decreased in four provinces, with British Columbia and Quebec experiencing the most significant declines, while Ontario saw a modest increase of 0.5%. Additionally, retail e-commerce sales rose by 3.5% to $3.8 billion, making up 5.7% of total retail trade.

TL;DR
CategoryChangeSpecifics and Highlights
Total Retail Sales-0.3%Decreased to $67.0 billion
Motor Vehicle & Parts Dealers-2.4%Main contributor to the decline
Core Retail Sales+0.4%Excludes gasoline stations, fuel vendors, and motor vehicle and parts dealers
Sporting Goods & Hobbies+3.0%Significant gains in this sector
Building Material & Garden Equip.+2.2%Notable increase
Food & Beverage Retailers-0.9%Notable decrease
Provincial ImpactMixedDecreases in BC and Quebec, increase in Ontario (+0.5%)
Retail E-commerce Sales+3.5%Rose to $3.8 billion, 5.7% of total retail trade
The forecast predicts a 0.1% increase in Retail Sales m/m compared to the previous result, which saw a decrease of 0.3%.

The next release of the Canadian Retail Sales data is scheduled for announcement on Wednesday at 12:30 PM GMT.


USD – Durable Goods Orders Ex Transportation m/m​

Core Durable Goods Orders month-over-month (m/m) measure the change in the total value of new orders for durable goods placed with manufacturers, excluding transportation items. This data is released monthly, roughly 26 days after the month concludes. It is a crucial indicator for traders as it serves as a leading signal of production levels; an ‘Actual’ figure exceeding the ‘Forecast’ generally indicates good prospects for the currency due to expected increases in manufacturing activity to fulfill these orders. The core figures are considered more reliable for gauging underlying trends as they exclude the highly volatile aircraft orders, which can distort perceptions. Additionally, these data are typically revised in the subsequent Factory Orders report, released about a week later, providing further insights into the economic conditions.

In a recent update on the US manufacturing sector, February 2024’s Core Durable Goods Orders—items excluding the volatile transportation category—showed an interesting development. Initially, these orders were reported to have increased by 0.5% from the previous month, a figure that was subsequently revised down to a 0.3% rise. Despite the downward revision, the revised figure of $277.9 billion still represents a recovery from January’s 0.3% drop and exceeds economists’ predictions of a 0.4% increase, reflecting a strengthened demand for durable goods beyond the transportation industry and signaling robust economic activity in broader manufacturing domains.

TL;DR
DescriptionDataInsights & Trends
Core Durable Goods Orders Growth (Feb 2024)Initially 0.5%, revised to 0.3%Despite the revision, growth is positive from the previous month
Amount$277.9 billionExceeds expectations and shows recovery from January's drop
January Performance-0.3%Indicates a previous decline
Economists' Prediction for February0.4% increaseActual growth exceeded predictions
SectorBeyond transportationReflects robust economic activity in broader manufacturing areas
The forecast for the US Durable Goods Orders Excluding Transportation m/m is reading 0.3%, a decrease from the previous actual of 0.5%.


USD – Durable Goods Orders m/m​

The Durable Goods Orders report, issued monthly approximately 26 days after the close of each month, tracks the variation in the total value of new orders for durable goods placed with manufacturers. Durable goods are categorized as hard products expected to last more than three years, including automobiles, computers, appliances, and airplanes. This initial data is typically revised in the subsequent Factory Orders report, released roughly a week later. Traders pay close attention to this report as it serves as a leading production indicator, where an increase in orders suggests a forthcoming rise in manufacturing activity to fulfill these orders.

In February 2024, the US Census Bureau reported that Durable Goods Orders in the United States initially showed a 1.4% month-over-month increase, later revised to 1.3%. This performance was a robust recovery from January’s significant 6.9% decline. The total orders amounted to $277.9 billion, boosted notably by a 3.3% increase in transportation equipment. Excluding transportation, the orders rose by 0.5%. The broader sector saw gains across various industries including motor vehicles, machinery, and metal products, with non-defense capital goods excluding aircraft also rising by 0.7%, reflecting a positive trend in business investment.

TL;DR
DescriptionData PointNotes/Comments
Overall Durable Goods Orders Growth+1.3% (Revised)Initially reported as +1.4%, showing recovery from last month
January Durable Goods Orders Growth-6.9%Significant decline from the previous month
Total Order Value$277.9 billionIndicative of the scale of transactions
Transportation Equipment Growth+3.3%Major contributor to the overall increase
Durable Goods Orders Excluding Transportation+0.5%Suggests growth even without the volatile transportation sector
Non-Defense Capital Goods Excl. Aircraft+0.7%Indicates positive business investment trends
Key Sectors Showing GainsMotor vehicles, machinery, metal productsDiverse industrial growth
The forecast for the Durable Goods Orders m/m is currently set at a decrease of -1.2%, contrasting sharply with the previous month’s increase of 1.3%.

The Durable Goods Orders Excluding Transportation m/m and the overall Durable Goods Orders m/m are scheduled to be announced on Wednesday at 12:30 PM GMT.


USD - Crude Oil Inventories​

The Crude Oil Inventories report, which measures the weekly change in the number of barrels of crude oil held by commercial firms, serves as a crucial indicator for market analysts and traders. Commonly referred to as Crude Stocks or Crude Levels, this report is particularly significant for the Canadian dollar—often called the "loonie"—due to Canada's large energy sector. A key barometer of supply and demand imbalances, the report influences production adjustments and can lead to notable price volatility. Typically, when the actual inventory decrease is greater than forecasted, it is viewed as positive for the currency, reflecting a potential uptick in demand or a decrease in supply.

The latest report from the U.S. Energy Information Administration for the week ending April 12, 2024, shows an unexpected rise in crude oil inventories by 2.7 million barrels, significantly above the expected increase of 1.43 million barrels. This brings the total to 460 million barrels, just slightly below the average of the past five years. Despite this, both gasoline and distillate fuel inventories fell more than expected. Overall refinery operations have increased slightly, though production of gasoline and distillate fuels has decreased, indicating reduced output. Meanwhile, crude oil imports have modestly increased, contributing to a 5% annual increase over the past month. However, total product supply including gasoline and distillates is slightly down from last year, showing a dip in demand. Additionally, propane and propylene stocks have seen a significant rise, suggesting changes in storage practices amidst fluctuating market conditions.

TL;DR
ItemChangeAdditional Information
Crude Oil Inventories+2.7 million barrelsAbove the expected +1.43 million barrels
Total Crude Inventory460 million barrelsSlightly below the five-year average
Gasoline InventoriesDecrease (more than expected)-
Distillate Fuel InventoriesDecrease (more than expected)-
Overall Refinery OperationsSlight increaseDespite reduced output in gasoline and distillate fuels
Crude Oil ImportsIncreaseContributed to a 5% annual increase over the past month
Total Product SupplyDecrease from last yearIncludes gasoline and distillates, indicating a dip in demand
Propane and Propylene StocksSignificant riseSuggests changes in storage practices amid market conditions
The next Crude Oil Inventories is set to be released on Wednesday at 2:30 PM GMT.







Disclaimer: The market news provided herein is for informational purposes only and should not be considered trading advice.
 
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