3:10pm (NZT)
Market Overview:
The broad USD strength of the past couple of weeks has finally eased, and the last 36 hours has seen a small retracement with most currencies gaining back a little of the lost ground against the US currency. The overall economic picture hasn’t changed much with a brighter outlook for the US, UK and Japan, supported by recent data. Europe however is getting left behind, and it’s hard to see where sustained growth in the Euro-zone is going to come from. The focus for all markets at the moment is the issue of the tailing off of quantitative easing (QE) measures in the US. We should get more clarity on this from FED chairman Bernanke over the coming days. A firm signal from him that the FED will start scaling back measures over the coming months would see reaction across all asset classes. Until recently it seemed improbable that there would be any tapering QE measures ahead of the end of 2014. The willingness of chairman Bernanke to provide monetary stimulation has remained unwavering until this point. With little in the way of inflation to worry about, this leaves them plenty of room to keep stimulating the economy. This is the central issue that provides increased focus this week.


Australia
Today in Australia saw the release of the RBA minutes from their last meeting. They have given a clearer picture to the thinking behind the 25 point cut they made a couple of weeks ago. It seems with inflation remaining low it has given them room to react to support growth that is forecast to be a little below trend going forward. They say the AUD remains overvalued by historical standards, and effects of earlier cuts are still working their way through the economy. The minutes certainly don’t give the impression the RBA are poised to make another cut in the near term. Tomorrow sees consumer confidence figures released which will also be closely watched.


New Zealand
The New Zealand economy remains on a firm footing with little in the way of domestic data or news flow to change that outlook. Offshore factors have been driving the currency. The broad USD strength has been the overriding theme driving the currency down from 0.8550 early in the month, to a low of 0.8060 at the end of last week. We have seen a small bounce from those lows at the start of this week. Today saw the release of inflation expectations which remain subdued, and later in the week we get trade data.


United States
The strong USD sentiment of late was given a boost with the release of consumer confidence data at the end of last week. The USD surged to its highest levels in nearly six years as Americans said they feel better about their financial and economic prospects. Hot on the heels of consumer confidence came the release of US leading indicators. This is a gauge of future US economic activity, and printed at its highest levels since June 2008. There is growing debate about just when the Federal Reserve will look to scale back asset purchases (quantitative easing). With inflation running so low they will feel no need to hurry with that decision. This week has plenty for the market to digest with FED Chairman Bernanke speaking on Wednesday ahead of the release of minutes from the last FED monetary policy meeting. Thursday sees weekly jobless claims and housing data, then on Friday there is durable goods orders.


Europe
Europe must be feeling somewhat left out in the cold recently. Over the last few weeks we have seen an improved economic outlook for the US, UK and even Japan. There is still a long way to go in all those economies, but the initial signs of recovery are there. In Europe however, winter looks to be far from over. Even Germany, the powerhouse of the region, has seen very patchy economic data lately. There will be more to digest this week in the form of consumer confidence and producer prices, along with data on the manufacturing and service sectors.  Further stimulus from the ECB over the coming months is a very real possibility. However, the real work needed to turn Europe around has to come from Governments. It seems the divide between what the dominant leader of Germany, and the rest of Europe want, is as wide as ever.


United Kingdom
This week is a big one in terms of economic data for the UK. It kicks off tonight with the important inflation numbers. Then Wednesday sees release of the Bank of England (BOE) minutes from their last monetary policy meeting, as well as the latest retail sales. Thursday sees the second release of the important GDP numbers. The general theme of the last few weeks has been one of a better outlook for the UK, and as a result the GBP has strengthened on most crosses. However it is still well below levels it was trading late last year, and that means there is plenty of room for further appreciation. Some more good figures this week will certainly help its cause.


Japan
Japanese officials have been all over the news wires the last few days. News started with the economy minister who over the weekend said “the correction of the strong yen is largely completed”. It seems the government is comfortable with the level of the yen here, as he added “if the yen keeps weakening a lot more, it will have a negative impact on people’s lives”. Given that markets rarely like to trade at levels governments are comfortable with, and the massive amount of quantitative easing recently announced, more yen weakness is a very real possibility. Yesterday saw the release of the government’s monthly report where they upgraded their assessment of the economy. They see a gradual recovery underway and recent data supports that. The question is whether or not it can be sustained. The Bank of Japan’s (BOJ) rate decision and policy statement on Wednesday will be closely watched. Japanese bond yields have also moved recently, in what has been some volatile trade.


Canada
The Canadian dollar lost ground against most of its traded pairs at the end of last week following the release of inflation data. The inflation number came in at its lowest level in more than three years, and leaves little doubt that rock bottom interest rates are here to stay for the foreseeable future. However, there is plenty of uncertainty around what impact the new governor at the Bank of Canada will have when he takes over in the next few weeks. With only retail sales to focus on this week, the market will be closely watching all the US releases.

4:20(NZT)
Australia
This week saw only second tier data out in Australia.While not market moving in itself, these numbers have reinforced the softer outlook. This was backed up by the Australian budget that downgraded growth forecasts. The 19.4billion budget deficit forecast, the result of a mix of tax hikes and spending cuts over the coming four years, and these will also weigh on the economy. Next week sees the release the minutes of the RBA policy meeting, and the latest consumer confidence numbers. A continuing theme has been that the AUD has remained under pressure from a strong US dollar, with many commentators calling for further weakness over the long term. Softer commodities, and continued concerns over the outlook the Chinese economy have continued to weigh on sentiment.


New Zealand
There has been little this week to materially change the solid outlook for the NZ economy going forward. Retail sales numbers came in below expectation, but are still performing well overall. These was backed up by manufacturing data that showed solid gains. The IMF released a report during the week that said NZ house prices are 25% overvalued, and this presented a risk to the bank sector. They see the current accommodative stance in monetary policy is appropriate, but suggest the RBNZ might have to raise rates later this year if prices keep going up. That would be a tough decision to make with the currency also 10-15% overvalued by their estimates. Thursday’s budget was a no surprise affair, with the government on track to reach a surplus by 2014/2015. That certainly helps to underscore a robust outlook for the economy going forward. The NZD found a little bit of support from the budget, but the overriding theme of recent USD strength continues to dominate the market.


United States
The USD has reigned supreme lately on the back of improving data and a better economic outlook. However, the last few days have seen some patchy and disappointing data which does put a question mark on the strength of the recovery in the US. Retail sales data early in the week was better than forecast, but since then we have seen weaker than expected numbers for industrial production, inflation, housing and employment. This should have seen the USD give back some of the recent gains. It was heading that way until comments by a Fed official last night saw renewed demand for the USD. Those comments related to the quantitative easing (QE) programme. The suggestion was that the Fed could start tapering off its QE program in the next few months, and maybe stop all together by the end of the year. That seems somewhat optimistic in light of the data out late this week. But as talk of reduced quantitative easing gains traction in the market, it will continue to support a stronger USD.


Europe
Data out of Europe this week will have done nothing to change the view that they have a long hard road ahead. The recent cut by the ECB is a signal that even though they may be years into this crisis, they have a lot of work to do. With low inflation, disappointing GDP figures for Germany, France and the Euro-zone as a whole, the pressure will be coming on the ECB for more action. That may come in the form of ‘non standard measures’ such as negative deposit rates for banks (banks charged for not lending excess cash reserves). ECB president Draghi mentioned this at their last meeting. Previous experience tells that Draghi is prepared to think outside the box, and do whatever it takes to try and rescue Europe from it’s mess. The EUR will continue to struggle in this environment against the likes of the USD and GBP. Next week sees the release of consumer confidence, producer prices and manufacturing data which will all be closely watched.


United Kingdom
The slightly improved economic outlook for the UK was highlighted this week with the release of the Bank of England’s (BOE) quarterly inflation report. It was somewhat more upbeat on the economy, with the BOE saying they see growth a little stronger and inflation a little weaker than three months ago.  BOE Governor King called it “a welcome change to the economic outlook”. This is helping demand for the GBP that has spent the last few weeks regaining some composure after the battering it took in the early part of the year. Although it has lost ground recently against the stronger USD, it has performed well on other pairings. Next week will be a big week for the currency with plenty for the market to digest. GDP, retail sales, house price and inflation data are all set for release along with minutes from the BOE’s last monetary policy meeting. A good week next week in terms of data could really set the tone for a much bigger recovery in the GBP.


Japan
The highlight of the Japanese economic calendar this week was the release of GDP. Coming in at 3.5%, it was well above the 2.7% expected. The increase was driven by much improved domestic consumption. The Japanese consumer is feeling pretty good about life at the moment, aided in no small part by the surging stock market. The stock market gains are largely as a result of Bank of Japan’s (BOJ) money printing policies, which have also help to dramatically weaken the yen. After breaking above 100.00 last week, the USDJPY has continued to head higher currently consolidating gains about 102.00. That weaker yen will help business confidence improve, as exporters see improved profits. This is all good stuff, but the big question is whether this initial positive reaction to recent policies can morph into sustained economic growth. Next week's focus will be on the Bank of Japan’s rate decision, policy statement, and monthly economic report.


Canada
It’s been a quiet week for economic news in Canada. The only releases so far have been in the housing sector and they have come in weaker than forecast. The housing market has been a point of concern for the BOC, and they have been trying to avoid a potential market crash similar to the one in the US in 2008. Aside from lackluster global growth, this is probably the biggest risk facing the Canadian economy. This is mitigated somewhat by a better outlook for the US, which obviously plays a big part in how the Canadian economy performs. Tonight sees the release of more important inflation data, which should hold no surprises in the current environment.

3:15 (NZT)
Market Overview:
The overriding theme that is driving the FX markets at the moment is one of broad based US dollar resurgence. The big trigger that ignited the recent moves was the USDJPY breaking above 100.00 late last week. But the pressure had been slowly building, with a run of better than expected US data over the last few weeks. Increasing focus has been on how the FED will exit its QE stimulus program, and just when this exit may commence. As a result, longer end US interest rates have moved higher, in line with the more optimistic outlook. This has underpinned the increased demand for US dollars. While commodities are somewhat heavy, and stock markets continue to find positives in any news and are currently trading near all time highs on many indexes. The G7 meeting over the weekend failed to deliver any ground breaking headlines. They are happy with Japan’s efforts to stimulate growth (read weaken demand for YEN), and there was general agreement on an ‘improved outlook’ for the global economy.

Australia
Home loans data released yesterday in Australia came in quite strong at +5.2% vs an expectation of +4.0. It was countered somewhat by slightly weaker Chinese data, and has had little effect on the generally weaker Australian dollar demand. The AUD remains under pressure against the USD holding below parity for the first time since July last year . The rest of the week sees a very light economic calendar with little to challenge the current view that the economy is under pressure, as support from Chinese demand is slowly diminishing. The federal budget tonight may be of some interest, although forecasts of a $20 billion shortfall in finances will only serve to reinforce the above view.

New Zealand
This week should be somewhat more subdued than the week previous. There is little in the way of domestic news that will be of material impact on demand for the NZD. Retail sales data released this morning was little disappointing coming in at 0.5%,  against an expectation of 0.8%. This has kept the NZD on the back foot, particularly against the stronger USD of late. Producer prices and manufacturing data are the only other releases of passing interest this week. The market will continue to be focused on the resurgent USD. This adds volatility to all the NZ dollar pairings, as it becomes a game of relative performance.

United States
The big story of the last week has been the recent bout of USD strength. This pressure had been building for a while, with slightly better data pointing to a more optimistic outlook for the US economy. Key to this has been their employment figures. With unemployment at 7.5% it is still well above the target the Fed has set at 6.5%, however it is heading in the right direction. If this trend continues we will start to see talk of the Fed scaling back their quantitative easing programme. Whilst we’re not there yet, but the market looks to be positioning itself in that direction. Last night saw the release of retail sales data that has helped to reinforce this view, coming in better than forecast. The US stock market seems to find positives in everything. Over the last couple of years equities would rally on bad economic data as it meant more QE was likely. Now they are benefiting on an improved economic outlook. You have to wonder how long these elevated levels can last, or how much higher they can go?

Europe
With a full economic calendar this week there will be plenty for the market to digest. Last night saw the Euro-zone finance ministers meeting where they agreed to release the next tranche of aid to both Cyprus and Greece. The rest of the week sees GDP and inflation data for both Germany and the Euro-zone, along with the closely watched German economic sentiment survey. We currently going through a period of relative calm in this Euro crisis, but if we have learnt anything from the last few years, it must surely be that we can expect more shocks ahead. The Euro-zone has a long way to go to overcome the structural issues they face and hopefully start to see an improvement in the southern economies.

United Kingdom
It will be interesting to see if the recent run of improved data out of the UK continues this week. The release of  latest house price and employment data provides the focus, and positive results would be of further benefit to the GBP. Whilst the GBP has recently fallen against the resurgent USD, the improved economic data has seen it perform relatively well on other pairings. The Bank of England (BOE) also releases its quarterly inflation report which will be closely watched. Inflation has been stubbornly high in the UK, and the BOE has consistently been wrong in forecasting a much lower outlook. Any admission by the BOE that inflation is unlikely to fall much over the forecast horizon will help to support the currency, by making any further stimulus measures a lot less likely.

Japan
This weekend saw a G7 meeting in the UK, which really failed to deliver anything ground breaking. As at previous international meetings, Japan escaped any censure for printing money (QE) on a scale that has pushed the yen sharply lower. The JPY has led the way in weakening against the US dollar, having never looked back after breaking above 100.00. It currently trades near 102.00 with many forecasting levels between 1.0500 and 1.1000 by the end of the year. Consumer confidence and GDP are both set for release out of Japan this week. Although these figures could well add some volatility, the outlook for a weaker currency is firmly entrenched, and there will likely be sellers on any bouts of yen strength.

Canada
The end of last week saw Canadian employment data that came in a touch weaker than expected. It printed at +12.5k against an expectation of +14.8k, and has done little to alter the stable outlook for Canada. The CAD is noticeably weaker against the USD in line with most other currencies, but has held up well on the crosses. This week we get a little more insight into how the economy is doing with the release of existing home sales and inflation data.

Major Announcements last week:

• Australian Retail Sales -.4% vs +.2% expected
• Canadian Manufacturing Index 52.2 vs 58.3
• RBA eases cash rate to 2.75%
• NZ Unemployment rate 6.2% vs 6.8% expected
• AU Unemployment rate 5.5% vs 5.6% expected
• UK Manufacturing +1.1% vs .4% expected
• BOE leaves monetary policy unchanged
• Canadian Unemployment rate 7.2% as expected

3:45 PM (NZT)
Australia
The only data of note since the RBA cut rates on Tuesday has been the unemployment figures that came out yesterday. There was a large jump in the numbers of employed, and a corresponding decline in the unemployment rate to 5.5%. This saw increased demand for the AUD, and the currency recover almost all the ground lost earlier in the week. This data is bucking the trend of softer economic releases for Australia recently. So it will be interesting to see where next week’s home loans and business confidence figures print. Also out this week were surprisingly strong export figures from China. This would normally be a positive indicator for Australia, but many commentators are questioning the validity of the data. Also of note before the employment number, was the Westpac call for another RBA cut in June and a cash rate of 2% (currently 2.75%) by 2014. If we see a return of softer numbers in the near term, this view may gain ground and further undermine demand for the Australian dollar.


New Zealand
It has been a very interesting few days for the NZ economy and the currency. Wednesday saw the release of the financial stability report by the Reserve bank. Not surprisingly two of the main issues the report talked about were the housing market and the currency. The RBNZ are looking to dig into their toolbox to find something other than the level of interest rates to try and cool the property market. Loan to value limits and bank capital requirements are likely to be used. Governor Wheeler then went on to say there is room to cut interest rates if the house price appreciation started to ease. These comments, along with the usual calls of the currency being ‘over valued’, saw the NZD start to come under some pressure. But Wheeler saved his best for last, and it was later on while appearing in front of a parliament select committee that he caught everyone off guard. His comments that the RBNZ has been selling NZD’s and that they are capable of further intervention saw the currency trade down about 1 cent against the USD on the day. No one really expects the RBNZ can do anything to change the trend in the NZD by intervening in currency markets. They just don’t have the size, or fire power. But they can certainly stop it being a one way bet, keep speculators on their toes, and help to round off spikes higher. They seem to of have achieved some of that here. Thursday then saw the release of key unemployment data which came in much better than forecast at 6.2% (expected was 6.8%). This just helps to reinforce the consensus view of a solid NZ economy underscored by the Christchurch rebuild. Next week’s releases of note include house sales, retail sales, and manufacturing index.


United States
Improved sentiment toward the US following last week’s better than expected employment data has continued this week. The only disappointing data was consumer credit that printed a little weak, but the market largely ignored it. More importantly were better than expected wholesale inventory and weekly jobless claims numbers. Although there wasn’t a big reaction to these numbers immediately they do serve to reinforce a better outlook for the US economy. This is particularly true for the jobless claims data which is starting to suggest that the drop in the unemployment rate to 7.5% seen last week was not an aberration. More so, this could well be the start of a trend in the right direction. Employment numbers remain the key for the Fed policy going forward. The currency certainly found some strength in late New York trading on Thursday as the USDJPY broke above key psychological resistance at 100.00. This triggered wave after wave of USD buying against most other currencies. Next week sees a full economic calendar with the most notable releases being retail sales, producer prices, industrial production and consumer confidence.


Europe
The EURO was buoyed by some better than expected data out of Germany this week as factory orders and industrial production both came in above expectation. The currency managed to recover almost all the ground it lost after last week’s interest rate cut, and subsequent talk of negative interest rates. Last night the ECB released its monthly report which shows they have lowered GDP forecasts for 2013 to -0.4% from 0.0% previously. Not a huge surprise as the market is well aware of the structural problems the Euro-zone faces. Until recently there was an attitude within the ECB that the central bank had done as much as it could, and it was now up to governments to undertake the reforms needed to turn the Euro-zone around. However, this attitude may be changing though, and this week’s talk from ECB officials has been suggesting they are looking outside the box for ways to boost lending, especially to SME’s. There is a G7 meeting this weekend and with many calling for growth policies, and easing of austerity measures, there is the chance for something interesting to come out of it.


United Kingdom
The improved data and a tentatively more optimistic outlook for the UK economy continued this week. This week industrial production and manufacturing production figures both beat expectation. The Bank of England last night announced no change in either the benchmark interest rate, or level of quantitative easing after their policy meeting. This was widely expected and the market offered little reaction. The GBP had been looking firm and eyeing further gains, but the USD strength across the board early this morning has seen the GBP under some renewed pressure. Next week sees employment numbers, and the Bank of England inflation report that are both potential market moving events.


Japan
There has been little in the way of fundamental news for Japan this week. Only the leading index,as expected at 97.7, and trade data which shows with a slightly smaller surplus than expected for April. The currency itself had been very quiet maintaining a tight range between 98.50 and 99.50 against the USD until early this morning. In late New York trade, the JPY came under pressure as USD buyers jumped into the pair. A move up through the important level of 100.00 triggered further buying and it currently trades near 100.80 and this move triggered weakness on other pairings. Next week sees a lot of second tier data which will be overshadowed by the more important consumer confidence on Wednesday, and GDP on Thursday. With the undeniable commitment from the Government and BOJ to end deflation in Japan, will undermine demand for the YEN for the short to medium term at least.


Canada
Canadian numbers so far this week have done little to change the markets view that the outlook for the economy remains solid. Very strong building permits data was tempered by surprisingly weak manufacturing data. Housing starts, and price data were in line with expectation, remaining at solid levels. The CAD has continued to gain ground this week. It has been stronger against most other currencies, and is currently trading at its best levels against the USD since February. The market is keenly awaiting Canadian employment data out tonight, which could set the tone for the currency in the near term. Next week sees existing home sales released ahead of more important inflation data.

5:15 PM (NZT)
Market Overview:
The theme of central bank stimulus providing the lead for the wider markets continued last week. The equity markets saw continued demand boost them to fresh record highs. Joining the apparent bonza, are well supported debt markets across the globe. Notably in Europe the peripheral members states are issuing debt with increasing ease. Global economic data remains patchy, with ongoing softness becoming evident in China and the closely related Australian economy. The pick up in UK economic activity has surprised many, and GBP has reacted accordingly. The US employment numbers continue to improve, with the unemployment rate pushing lower to 7.5%.Today’s RBA decision to take the opportunity to ease their cash rate 25pts to 2.75% is another acknowledgement of the global economies underperformance in the first quarter 2013. Lower global inflation levels enabling the ongoing support a wide range of central banks.

Australia
Australia started the week on a disappointing note with more soft data having an impact on the currency. Retails sale came in well below expectation, job ads data was soft, and figures on the Chinese service sector showed the slowest growth in 20 months. Today the RBA has also decided to cut rates by 0.25% to 2.75% in what was a line ball call by most in the market. With inflation at or below trend, and most other indicators softening, the RBA had plenty room to move and they have done just that. Thursday sees the release of important employment data. Adding to the mix will be further data releases from China this week. Continued pressure on the Chinese economic data , will increase the vulnerability of the Australian dollar.

New Zealand
Last week offered little in the way of fresh insight into the NZ economy, with most of the focus was on offshore events. Better than expected US employment numbers did nothing to hurt demand for the NZD, which actually made ground against the US Dollar on Friday. This week’s economic calendar offers a bit more of interest than last week. The highlight will be the NZ unemployment rate on Thursday, which has the potential to put a spanner in the works for the currency. The NZD has been well supported lately and the outlook is for it to remain firm throughout this year. But disappointing unemployment figures could well catch the investor market with large holdings of NZ dollars. If this proves to be the case, expect a larger reaction than might otherwise be the case. This is certainly the biggest risk on the week. Until then, dips for the NZD will remain supported, and second tier data in the form of hourly earnings and retail card spending should have little impact.

United States
The US economy ended last week on a mildly firmer note with the release of all important employment data. It came in a little stronger than expected, but of more impact were the substantial upward revisions to both February and March’s figures. The unemployment rate also dropped to 7.5% which is the lowest level since December 2008. The impact was however tempered somewhat by weaker manufacturing data. None of this does anything to change the near term outlook for the Fed, who have publically stated they are targeting a 6.5% unemployment rate. US equity markets continue to make gains with fresh highs in the S&P 500 on Friday. This week see a relatively light calendar with only consumer credit, weekly jobless claims, and wholesale inventory data of any note. These come ahead of a speaking engagement by FED chairman Bernanke on Saturday.

Europe
A mixed bag of data out of Europe on Monday had little impact on the currency or the out look. Services sector data was slightly better than expected, while retail sales came in a touch worse.
After last week’s ECB rate cut the market was keenly focused on a speech by Draghi last night. He reiterated the point that the ECB council are studying closely what impact a move to negative deposit rates would have ,and that they stand ready to act if needed. Just like Thursday last week when he mentioned it, the currency has reacted to the downside. Talk of negative rates will always do that, but any move by the ECB in that direction would not happen soon. Draghi is most probably just “jawboning” the currency down.  This view is backed up by comments from another ECB governing council member, Ewald Nowotny, who said on Friday “negative rates are not something of relevance in the immediate future”.

United Kingdom
The recent run of stronger than expected economic releases out of the UK continued on Friday. Data on the services sector, the largest part of the economy, unexpectedly strengthened in April.This follows improved data on the manufacturing and construction sectors earlier in the week, and the better than expected GDP data the week before. This leaves little doubt in anyones mind that the BOE rate decision on Thursday will see no change in either the interest  rate or the total level of quantitative easing, currently set at 375 billion pounds. This meeting should have little impact on the currency. As pleasing as the recent data will be for both the BOE and the government, it is way too early to call the start of a sustained recovery. It may well be that what we are seeing is a bit of a bounce back from severe weather affected data earlier in the year. This week should shed a little more light on how the economy is performing with industrial and manufacturing production data set for release along with trade balance and construction output.

Japan
Japan has little in the way of domestic data out this week with trade numbers and JPY leading index the only releases of note. Offshore factors will therefore drive demand for the YEN, and that was certainly the case on Friday with the release of US employment data. Coming in better than expected and with a fall in the unemployment rate, there seemed to be a ‘risk on’ attitude enter back into the market. As a result the JPY weakened significantly, most noticeably on the crosses against the NZD, AUD and EUR. Against the USD, a test of the psychological 100.00 level could well be on the cards over the coming week. Over the weekend Japan has announced it’s intention to boost financial ties with Asean countries by increasing foreign bond holdings through investment in a Pan Asian Bond Fund. While no amounts were given, the flows required are all JPY negative and it will reinforce the heavy Yen sentiment.

Canada
Canada posted it’s first trade surplus in a year at the end of last week, helping to underpin the stable outlook. This will be good news for the Bank of Canada (BOC) that has stated the economy's need to move away from an over- reliance on domestic consumption. Exports to the US were responsible for a large part of the improvement in the trade figures. Friday’s positive US employment data will only help to underscore this. The CAD has remained on a firm footing at the start of this week in which the focus will be on Canadian employment numbers and housing data.

Major Announcements last week:

• US Personal Consumption 1.1% v 1.2% expected
• Euro-Zone CPI 1.2% v 1.6% expected
• Euro-Zone Unemployment 12.1% as expected
• CAD GDP 1.7% v 1.3 expected
• US Consumer Confidence 68.1 v 61.0 expected
• US ISM Manufacturing 50.7 v 50.5 expected
• US Fed leaves rates unchanged as expected
• ECB cuts rates by 0.25%
• US Non-farm Payrolls 165k v 140k expected

2:45 PM (NZT)
Australia
Australia saw a raft of largely uninspiring second tier data out this week, and the released news did nothing to materially change the current outlook for the economy. The current consensus that the peak in the mining/resource boom is well past and that support from the Chinese economy is waning, was only reinforced by the release of weaker Chinese manufacturing PMI data for April.
This coming week will provide a lot more in the way of insight into how the economy is actually performing, and what the RBA are thinking. Retail sales, house price and employment data are all set for release along with the Reserve bank’s rate decision. It will be very interesting to see if the RBA reinforces the market view that a rate cut in the second half of this year is looking increasingly likely. That expectation can only have gained traction after yesterday’s March building approvals made a very weak showing at -5.5% against and expectation of a 1.0% rise.


New Zealand
There was nothing of note this week to change the general theme of a reasonably firm domestic economy, underpinned by the Christchurch rebuild and a strong housing market. Dairy prices did drop (7.3pc) for the first time in 10 Global Dairy Trade (GDT) auctions, but having increased dramatically during the drought, this comes as no real surprise or concern. What will be of concern for the RBNZ is the housing market. The latest data from realestate.co.nz shows asking prices have reached all-time highs. That competes for attention at the RBNZ with the level of the currency which maintains its firm footing. Although at very elevated levels, it’s hard to see what in the near term could change the trend, and there aren't many commentators forecasting any material depreciation between now and the end of the year. Next week the domestic focus comes in the form of the 1st quarter employment numbers on Thursday.


United States
A mixed bag of data out of the US this week, with the bright spots being consumer confidence and house price data that both came in higher than expected. While on the other side, weaker manufacturing numbers have tempered any real enthusiasm. One of the big focuses this week was the FOMC rate decision and the accompanying statement released on Wednesday. As expected, there was no major change in the policy stance with a continuation of $85 billion a month in quantitative easing (QE). It seems increasingly likely that this level of stimulation will continue until at least late this year. The statement could have been read as a touch more optimistic with no references to ‘disinflationary pressures’ seen in previous months, but aside from that it really didn’t produce anything ground breaking. Equity markets are loving the continued central bank support with the S&P500 making new all-time highs this week. Key to the FED’s outlook is employment, and near term direction in the dollar could well be dictated by the result of non-farm payrolls data scheduled for release tonight. The last two weeks have seen a solid improvement in weekly jobless claims data, with the rate falling to the lowest level in 5 years yesterday. Whether that flows through into better payrolls data tonight remains to be seen.


Europe
Growing expectations of an ECB rate cut were cemented earlier in the week with the release of EUR-zone inflation numbers coming in well below forecast. Last night the ECB didn’t disappoint, cutting its key refinancing rate for the first time in 10 months. It now stands at 0.5% from 0.75% previously. The cut was largely factored into the market and in itself didn’t have a huge impact on the EUR. What did move the currency was comments from ECB head Draghi with regard to their deposit rate (the rate of interest banks receive on funds deposited with the central bank). He basically said that negative interest rates are technically possible, they will look at it with an open mind, and they stand ready to act if needed. It’s most likely just a threat, but the ECB are frustrated at the lack of lending to business and this would certainly impact that.


United Kingdom
Last week’s better than expected GDP numbers have been followed up this week by much improved manufacturing and construction data releases. That will help cement slightly better sentiment toward the UK, and could well see GDP numbers maintain a more consistent path going forward. There will be huge sighs of relief from the government if that proves to be the case as they have been coming under all sorts of pressure this year to ease austerity measures. Three numbers however don’t make a recovery, and next week’s releases of note that will be closely watched include industrial production, trade balance and the Bank of England (BOE) interest rate decision. The BOE decision will almost certainly see no change to rates. We will have to wait another two weeks to see the minutes from the meeting to get any insight into their thinking. With the fortunes of the UK so closely linked to those of Europe, the ECB decision to cut rates last night may well prove another small positive for the economy in the long run.


Japan
The scale of quantitative easing announced by the BOJ earlier in the month only goes to highlight the enormity of the task the government and the central bank have in trying to ignite the Japanese economy, and finally put deflation behind them. A mixed bag of data out this week hasn’t given a clear picture of just where they are at. Strong household spending figures were contradicted by weak retail sales data. Industrial production disappointed, while housing starts were better than expected. The stock market has certainly got a shot in the arm, and that seems to have aided the household spending to a degree. It is too early to answer the  question of whether it is sustainable. What is clear is that although the JPY has regained some of the ground it lost on the QE announcement, this is most likely a corrective move. The sheer scale of money printing (QE) that will be injected into the economy over the next 2 years will likely see further JPY weakness. Next week’s data won’t provide us with much more insight into the health of the Japanese economy, with trade figures and the JPY leading index the only data that will warrant attention.


Canada
The solid economic outlook for Canada has continued this week. Two pieces of data reaffirming the markets view that, at least on a relative basis, Canada is doing much better than most other major economies. GDP for February, and RBC Manufacturing PMI both beat forecasts, and this has continued to underpin the Canadian dollar, which has made broad based gains against most other currencies over the last few weeks. Expect much of the same next week, with the focus on housing starts and employment data, out on Wednesday and Friday respectively.

4:07 PM (NZT)

Market Overview:

The wider financial markets have seen weak economic indicators recently with the overall theme being one of very tame inflation, and continued central bank support. This should be underlined this week with meetings by the ECB and the US Fed. There is growing expectation that ECB President Draghi will announce a 25 point cut on Thursday, and a broad consensus that the FED will continue quantitative easing (QE) at the current levels over the coming months. Stock markets have seen solid gains with Wall Street approaching record highs. The US dollar is weaker against most currencies and bond markets have generally been well supported. This theme of ongoing central bank support will provide underlying demand for the New Zealand and Australian dollars in the coming months. After the soft start to 2013, the prospect of a closing of the interest rate gap between the larger economies and that of Australasia has diminished. This is central to the prolonged demand for the Australasian currencies and the continuation of their trade at elevated levels with attractive interest rate yield driving demand.

Australia

Last week’s materially weaker than expected Australian inflation number continues be felt through the Australian markets. There is a lot second tier data out of Australia this week, and probably nothing to change the markets view that a rate cut by the RBA in the second half of the year, is looking increasingly likely. AIG’s manufacturing index released on Wednesday and service index on Friday will be watched along with new home sale and producer prices. Key releases from offshore will most likely steal the focus and drive the AUD in the later part of the week.

New Zealand

The NZ economy remains on a firm footing with strong reading’s from both the BNZ business confidence and the ANZ business confidence surveys. Exports to China continue to grow and it has now overtaken Australia as our number one export market, with forecasts of further growth ahead. The latest projection for the cost of the Christchurch rebuild has been pushed up to NZD 40 billion. With a good chunk of that coming from overseas reinsurance, periodic re-insurance will continue to underpin the currency. The rest of the week is very quiet on the data front for NZ, leaving demand for the NZ dollar to be driven by events in the wider market.

United States

The end of last week saw more disappointing data for the US with key GDP figures coming in well below expectation at 2.5%. Forecasts had focused on a result around the 3.0%, so the undershoot will only serve to bolster the FED’s commitment to ongoing quantitative easing at the current rate of $85 billion a month. This week has kicked off with a mixed bag for personal income and consumption data which was largely overshadowed by stronger pending home sales. The wider markets positive reaction to the forming of a government in Italy has seen the US stock market perform strongly with the S&P nearing record highs. The rest of this week sees a full economic calendar of releases for the US with consumer confidence, manufacturing and the FED’s monetary policy meeting all scheduled ahead of important employment numbers at the end of the week. After the FED policy statement, the primary focus comes from the non farm payrolls on Friday. The market expectation is for a number around 170k, after a disappointing result last month with only 95k new jobs created.

Europe

Europe’s focus this week will be on the ECB rate decision on Thursday. The weak data of late combined with some “dovish” talk from officials has seen a growing number of commentators expecting a 25 point cut from the central bank. The impact of any cut is a very debatable point, but what is clear is that with partial repayment by banks of previous long term refinancing operations (LTRO’s), the ECB is the only major Central bank this year with a declining balance sheet. The BOE has increased its funding for lending scheme, the BOJ is undertaking massive monetary easing, and the Fed continues to buy $85 billion a month in bonds and securities. Europe is arguably in greater need for stimulus at the moment than some of the other countries and weather that will see a cut from President Draghi or some other creative measures remains to be seen. There have been some positive developments this week with the announcement of a new coalition government in Italy, while Spain has pushed out it’s target for budget deficit reduction by two years in an effort to ease austerity. This can only be a good thing with unemployment above 27% and recent downward revisions to growth forecasts. Other key data for this week includes Euro zone consumer confidence, inflation, and unemployment.

United Kingdom

Improved sentiment toward the UK as a result of last weeks better than expected GDP number is likely to continue into this week with only data releases of note being nationwide house prices and PMI’s for the manufacturing, services, and construction sectors. With so much negative news being priced into the GBP of late, the jump in demand for the GBP following the positive GDP news should not have come of surprise. The GBP is holding onto it’s recent gains, but direction over the coming days will be dictated by reaction to the  FED and ECB rate meetings later this week and key US employment figures Friday.

Japan

The Bank of Japan’s monetary policy statement on Friday saw no further stimulus measures announced. This was not a huge surprise after unveiling aggressive quantitative easing measures at the previous meeting. As a result of these earlier measures, they have revised higher CPI and GDP forecasts for the next 3 years. The Bank now expects growth of 2.9% in the year to March 14, and inflation to reach it’s 2% target in the latter half of 2015. History would say these forecasts could be a little optimistic, and there is no denying the enormity of the task the BOJ has in turning around 15 years of deflation. The BOJ announcement Friday, combined with the softer US GDP data, actually saw the Yen strengthen against the US dollar, albeit from reasonably weak levels. The rest of the week is relatively light for important data out of Japan, so offshore factors are likely to drive sentiment.

Canada

Supportive economic data and a recent rebound in commodity prices have helped to underpin the stable outlook for the Canadian economy. This has been reflected in the currency that has made good gains against most others over the past week. The only data release this week is GDP, but don’t expect a huge reaction as it’s the February number and is almost obsolete by the time it’s released. Events in the US later this week will be key drivers of the currency.

Major Announcements last week:

• HSBC Chinese Manufcaturing PMI 50.5 vs 51.4 expected
• Euro-zone Manufcaturing PMI 46.5 vs 46.8 expected
• Canadian Retail Sales +.7% vs +.5% expected
• US manufcaturing PMI 52.0 vs 53.8 expected
• US New Homes Sales 417k vs 416k expected
• RBNZ leaves monetary policy unchanged
• Australian Inflation +.4% vs +.7% expected
• US Durable Goods Sales +1.4% vs +.5% expected
• Preliminary UK GDP +.3% vs +.1% expected
• BOJ leaves monetary policy unchanged
• US Advanced GDP +2.5% vs +3.1% expected
• Italian  finally establishes new Government

4:40 PM (NZT)
The New Zealand Economy.
The main focus for NZ this week was the Reserve Bank interest rate decision on Wednesday. Although no change in the cash rate was widely expected it was what was said, or to be more specific, not said, that caused the most reaction. It seems the market was expecting a much stronger stance on level of the NZD than Governor Graeme Wheeler actually delivered, and that has caused a decent reaction in the currency. Previous threats of a rate cut should the currency continue to strengthen were nowhere to be seen in the text of his release, with references to the currency being ‘overvalued’ were as strong as it got. Inflation continues to remain subdued, of larger concern for the Reserve Bank being the continued heat in the property market. The only data of note next week will be building permits and business confidence.

The Australian Economy:
It has been a relatively quiet week on the economic data front for Australia with the main focus being the release of the consumer price index for the first quarter of 2013. It came in well below expectation at 0.4%. With inflation not proving to be of any concern, it gives the Reserve Bank of Australia plenty of room to cut rates later this year should they feel the need to do so.  The markets are certainly pricing in a good chance of this, and continued slowing of the Chinese economy will only serve to increase expectation.  Tuesday’s release of Chinese manufacturing PMI at 50.5 (only mildly expansionary and against an expected 51.5), did nothing to alleviate fears that the one of the biggest supports for the Australian economy over the last few years is slowly being whittled away.

The United Kingdom economy:
The UK economy is finishing the week on a brighter note with the key GDP numbers surprising to the upside. There was a lot of talk previously about the chance of a triple dip recession, but that has been put to rest with a better than expected result of 0.3% for the first quarter. Second tier data out earlier in the week was on the soft side but this was overshadowed by the announcement from the Bank of England that they are extending and expanding their Funding for Lending Scheme (FLS). The scheme has been extended by a year, and expanded to include whole range of institutions that lend to businesses who will now be eligible for cheap funding from the BOE. Although not a game changer for the UK economy, FLS announcement combined with the GDP figures make any further quantitative easing in the near future a lot less likely. The big unknown though is what impact the new incoming BOE governor, Mark Carney, will have when he takes the reins in a couple of months.

The European economy:
The past week has seen many European economists change their calls for next week’s ECB rate decision meeting to a 0.25% cut from a previous no change expectation.  This is as a result of continued soft data and tone of commentary from members of the governing council. Two key data releases this past week underscored that expectation. They were the Euro Zone PMI for services and manufacturing, and German IFO. Both of these came in significantly weaker than expectation. The Euro Zone PMI was pulled lower by the German component, and that combined with the weak business confidence readings of the German IFO will be a big worry for the ECB. Germany has been the only bright spot in the Euro Zone since the crises began, but it seems now that they too are being dragged down and that may be enough to see the ECB act. How much of an impact cutting rates from 0.75 to 0.50 will have is a debatable point, as a lot of Europe’s issues are the result of major structural problems.

The United States Economy:
The US has seen mostly weak economic data out over the past week, with the only bright spot being unemployment claims which came in better than expected at 339,000. That’s the second lowest level in more than 5 years. Although it might signal a better non-farm payrolls figure next month, it comes on the back of weaker than expected home sales data and very average durable goods numbers that will be of concern for policy makers. The general run of soft economic data since March will only serve to support the continuing quantitative easing programme by the FED, and take gloss off what markets are expecting to be a solid first reading of US GDP figures out on Friday night.

The Canadian Economy:
A positive week for the Canadian economy with two data releases underpinning a relatively stable outlook. Firstly, and more importantly,  were retail sales for February which came in at a strong 0.8% against and expectation of 0.3%. This was backed up yesterday by better than expected average weekly earnings.  On a relative basis the Canadian economy is in pretty good shape. Governor Carney’s last scheduled testimony before parliament didn’t deliver anything ground breaking. He believes the economy is strong, but still faces some risks. The most notable of these are the high levels of debt Canadians hold, and the elevated level of the housing market. In his own words ‘it’s not the right time for a family to stretch finances and buy a house.’ This coming week sees the release of key GDP figures as well as international trade data, and it’s safe to say the market is expecting both figures to underline what has been a solid stable recovery.

6:10 PM (NZT)
Market Overview:
It has been a very interesting last few weeks for the wider financial markets. It has become more evident that earlier hopes for a flourishing recovery for the global economy in the first half of 2013 were misplaced. Expectations now build of improving activity in the second half of the year has come as global indicators have missed expectations almost across the board for the first quarter. This pushing out of the recovery horizon has come as global inflationary pressures remain benign. These benign pricing pressures have joined with the increased central bank stimulation to push longer end borrowing rates lower across the globe. With the continuing presence of these opposing forces of increased monetary stimulation, and low levels of economic activity, further directionless sideways trade in many markets in the coming months.

Australia
Last week saw the weak 1st quarter Chinese GDP numbers ensure that demand for the Australian dollar was somewhat tempered. The domestic focus of the week was the RBA monetary policy meeting minutes. These revealed little of material surprise, with the way remaining open to a lowering of the 3.00% cash rate should conditions become more difficult. This week will see passing focus on the latest Australian inflation numbers at tomorrow’s release. Today saw the latest Chinese manufacturing numbers released. These were weaker than expected, which continues recent run of soft Chinese economic data. The odds of a lower cash rate from the RBA have increased in the last couple of weeks, and now move close to a 50% chance of a cut at upcoming meetings. Domestically, of primary concern are the continuing low levels of investment in non-mining sectors.

New Zealand
Last week saw the latest Global Dairy Trade (GDT) auction results show consolidation of prices at record levels after the 9th straight increase. These came as easing drought conditions were seen in the north island, after periods of widespread rain. This should help support next season production levels for the important sector. The latest inflation numbers were on expectation with a moderate .4% increase in prices for the 1st quarter. Continuing demand for NZ Government bonds will likely provide some on-going support the NZ dollar in the coming months. The RBNZ monetary policy announcement tomorrow provides the primary focus this week. The statement accompanying the unchanged cash rate decision will be closely watched. Expect further reference to the Auckland property market, and the NZ dollar.

United States
Last week’s US inflation numbers were lower than expected, and re-iterate the importance of the FED’s monetary stimulus to the economy’s vulnerable recovery. The rest of the economic news remains mixed with housing activity consolidating around its improved levels along with industrial production, but corporate earnings have been weak as a balancing factor.  This Friday will see the first quarter GDP numbers released, and these provide the primary focus amongst various other data due for release. Expectations are for increased activity around 3% for the quarter. Also of note will be the manufacturing numbers later on today, durable goods sales numbers tomorrow, along with various corporate earnings results on Wall Street.

Europe
There has been little change to economic sentiment in Europe in the last week. The numbers continue to point towards further easing to the cash rate at some stage from the ECB, and now the debate becomes about the effectiveness of additional easing. Growth is really struggling to re-emerge and it seems likely that there will be easing of time frames to get debt to GDP ratios in order in the coming months. Lower levels of Government spending are materially impacting the recovery, and a loosing of time frames would certainly offer some assistance. Inflationary pressure remains under control, easing the way for policy accommodation from the ECB of deemed appropriate. Of interest has been the material increase in demand for European debt as cashed up Japanese pension funds chase yield following the BOJ policy initiatives. This week’s focus comes from the manufacturing and services numbers later on today. Expect pressure across the board, with Germany the only member with a chance of showing increased activity.

United Kingdom
Last week saw UK inflation released as expected at 2.8% on an annual basis. Labour market numbers remain mixed at best with the unemployment rate lifting slightly to 7.9%. The retail sales sector remains under pressure, albeit the last numbers met expectation with a .7% decline in activity on the month. An unsurprising credit down grade from ratings agency Fitch did not have a lasting effect on the GBP. This week will sees just passing domestic focus in the UK ahead of the primary focus in the form of the preliminary 1st quarter GDP numbers on Thursday. These figures are crucial to the decision making from the BOE with regards to future monetary policy stimulus. Weak numbers would further increase the chances of additional quantitative easing, placing further pressure on the GBP.

Japan
The weekend’s G20 meeting offered a chance for friction on the Japanese aggressive policy released in the last few weeks. Externally at least , there was no debate and this means a tick of approval from the international community. In the absence of any material economic news of note, the Yen saw periods of demand as wider market risk aversion increased. So with the softer global growth outlook, further YEN weakening will not come as easily as the previously ground lost. Interestingly, an externality of the BOJ’s policy will see increased Japanese investor buying of foreign bonds as they chase higher yield. This does not only mean Australia and New Zealand. This has already been seen in European peripheral member debt last week. Good support in the bond markets pushed yields lower and provided support for the EURO itself. The BOJ get another chance to voice their policy at the monetary policy meeting this Friday.

Canada
Last week was a mixed one for the Canadian economy. Better than expected manufacturing numbers were balanced by the material fall in the important raw commodity markets. The Bank of Canada maintained and unchanged cash rate as expected. Whilst they maintained the next move would be an increase from the current emergency levels, they also revised growth expectations from 2.0% to 1.5% for 2013. Monthly inflation was confirmed at .2%, and these factors mean the BOC will remain on the side lines for the coming months at least. This week sees the retail sales number later today (Tuesday) offer focus ahead of speeches by outgoing Governor Carney on today and tomorrow.

Major Announcements last week:

• Chinese GDP 7.7% vs 8.0% expected
• UK Inflation +2.8% as expected
• Canadian Manufacturing Sales 2.6% vs .6% expected
• US Inflation +.1% (mth) vs +.2% expected
• NZ Inflation +.4% (qtr) as expected
• UK Unemployment 7.9% vs 7.8% expected
• BOC leave cash rate unchanged
• UK Retail Sales -.7% as expected
• Canadian Inflation +.2% (mth) as expected
• US Existing Home Sales 4.92m vs 5.02m expected
• Chinese Manufacturing 50.5 vs 51.4 expected

4:20 PM (NZT)
Australia
The Australian economy has been light on news this week. The minutes from the latest RBA monetary policy meeting offered little surprise, re-iterating that they remain poised to ease the cash rate lower from the current 3%, if conditions prove it necessary. Economic news of late has been patchy at best, so with the lower than expected Chinese GDP number early this week, the odds of an easing in the coming months has increased to close to 50% in the interest rate market. The downward revision of global growth estimates for 2013 by the likes of the IMF is not a good sign for the Australian economy. Falling Chinese demand will further pressure the export sector if the Australian dollar remains at elevated levels. Next week will see 1st quarter inflation numbers offer some interest on Thursday. Also the latest Chinese manufacturing numbers will offer some indirect focus on Tuesday.
 
New Zealand
It has been a relatively quiet week for NZ economic news. The 1st quarter inflation numbers offered some interest, but ultimately were of limited impact. The modest .4% rise in consumer prices was right on market expectations and the annual inflation rate comfortably within the RBNZ expectations. The latest Global Dairy Trade (GDT) auction results saw a modest gain make the 9th straight auction price rise and yet again record levels fetched. Rainfall across the North Island this week should ease slightly the drought impact fears for the coming season. Next week sees the RBNZ monetary policy announcement on Wednesday offer the primary domestic focus. With no change to the 2.5% cash rate expected, the statement will offer the latest insight to RBNZ thinking. Expect the property market and the high level of the NZ dollar to again feature in the statement.
 
United States
This week has seen further mixed economic news in the US. Inflationary pressures remain anchored. Manufacturing indicators were soft, but housing starts and industrial production numbers relatively stable. The stock markets have remained patchy with direction-less trade, and longer term interest rates have pushed marginally lower on a strange week where the Boston events added to uncertainty. Next week will offer important insight. The latest homes sales, manufacturing and durable goods sales data join the important advanced release for the 1st quarter GDP number on Friday. 
 
Europe
Unsurprisingly it has been another reasonably downbeat week for the European economy. Economic sentiment numbers came in below expectations, and the latest inflation numbers were as expected. Increasing speculation of an ECB easing of the cash rate continues to emerge. This week uncharacteristically saw the German Central Bank head suggesting the ECB would lower rates if data warranted it. The IMF has also been verbally pushing for further such monetary accommodation from the central bank. Next week sees the latest manufacturing and business sentiment numbers offer further insight to the economy that is expected to start to emerge with growth in the latter half of 2013.
 
United Kingdom
It has been a mixed week for news in the UK. The latest inflation numbers came in on expectation at 2.8%. Unemployment numbers were not great, with the rate lifting from 7.8 to 7.9%. Retail sales activity fell .7% for the month. The BOE monetary policy meeting minutes revealed no change to the voter split on extending the QE program. Three of the nine voters remain in favour of further monetary stimulation, and this will continue to undermine demand for the GBP against the Australian and New Zealand dollars, in the short term at least. Next week sees preliminary GDP data offer the dominant focus, and they are due for release on Thursday.
 
Canada
It has been an interesting week for the Canadian economy. The latest manufacturing numbers were stronger than expected, with a 2.6% increase in activity. The BOC statement accompanying their unchanged cash rate also offered interest. 2013 growth expectations have been lowered from the previous estimate of 2.0%, to 1.5%. Lower levels of global growth leading to the softer domestic growth forecast  However, do not expect easier monetary policy at any stage with the next move still expected to be higher for the cash rate from its emergency low setting, the issue is of course timing of the cash rate increases. Later today the latest inflation numbers are due for release.  Next week sees just Tuesday's monthly retail sales data offer any domestic focus.
 
Japan
This week has seen little in the way of material economic data released. The focus has come from various statements offered by officials. In the run up to this weekend's G20 meetings, political posturing has been rife. BOJ head Kuroda again stated that "global policy makers understand that the recent BOJ actions do not specifically target the value of the YEN". These kinds of comments are somewhat unsurprising, and have been made before. However, these and the wider market risk aversion have seen YEN demand increase in the short term. Next week will see the latest inflation numbers released ahead of the BOJ's monetary policy announcement on Friday.

4:40 PM (NZT)
Market Overview:
The last week has proved to be a most interesting period for financial markets. For the most part sentiment proved enthusiastic, with stock markets pushing to record high levels as central bank monetary stimulation provided direction. However economic data has been soft as numbers for the first quarter have emerged. Fridays release of weak US retail sales and consumer sentiment numbers point towards further pressure on growth numbers to start 2013 for the world’s largest economy. These concerns further increased yesterday as lower than expected Chinese growth and industrial production numbers for the first quarter were released. With the world’s two largest economies underperforming to start 2013, a test of the markets commitment towards higher growth asset prices has ensued. Hard commodity prices have been smacked lower in the opening sessions this week (gold down around 10% yesterday), and a surge in the US dollar and Japanese YEN has ensued. Needless to say as the rapidly changing sentiment came to light, the Australian and New Zealand dollars have come under substantial pressure. In the last couple of hours the senseless bombings in Boston have further rattled market confidence. To what extent there are ongoing ramifications of this terror threat re-emergence play on the market will take time to ascertain. The terror threat to sentiment aside, it seems increasingly clear that 2013 is not going to be a year of straight forward recovery for the global economy. Similar to 2012, the opposing influences of extensive central bank stimulation, and a moribund global growth story, point toward range bound markets lacking firm direction.

Australia
The primary domestic news focus for the Australian economy in the last week was the materially weaker than expected employment numbers on Thursday. Not only was there a contraction in the number of jobs in the economy, the number of people looking for jobs also contracted, indicating that workers have given up looking for employment. These indicators certainly legitimise the wait and see approach from the RBA with regards to further easing of the cash rate. Yesterday saw the latest Chinese growth and industrial production numbers reveal lower than expected levels of activity in China. As Australia's largest trading partner this will impact the Australian economy overtime, and the Australian dollar saw immediate pressure across the board following these announcements. Adding to the pressure this week will be the tempering of stock markets, and the collapse in the precious metals markets. Today's RBA monetary policy meeting minutes revealed little of surprise with the bank remaining poised to offer further stimulation as the need arises, which for now it does not. The remainder of the week will have an external focus for the Australian economy, in the absence of any further economic data of note on the local calendar.

New Zealand
Last week saw the latest quarterly Survey of Business Opinion released from the NZIER. This survey has seen sentiment consolidate at elevated levels. It has made steady recovery from the dip seen in the middle of last year. The NZ government bond market has continued to see increased levels of interest from offshore, and this has further fuelled demand for the New Zealand dollar. Also of note is the re-emergence of re-insurance flows that we have seen periodically over the last couple of years. The weak US and Chinese economic data in the last few sessions of trade has finally undermined some of the recent NZ dollar demand, which will be of relief to the export/import substitution sectors. This week sees NZ inflation numbers on Wednesday provide the primary domestic focus.

United States
The first quarter of 2013 is looking increasing like it has been a soft patch for the US economy. The FED's monetary policy meeting minutes last week did not shed much in the way of new insight. The FED remains committed to ongoing economic stimulation until the labour market consolidates with lower levels of unemployment. Friday’s weak retail sales and consumer sentiment numbers are the latest evidence of the struggle for growth, in the face of lower government spending. The horrible events on Boston could impact market sentiment for the US dollar depending on how events play out. This week is relatively light on economic data releases. Later today sees the latest building permit and inflation numbers released, but these should be of limited impact to USD demand. Manufacturing numbers later this week provide the primary focus alongside various corporate earnings results as they come to light.

Europe
Last week was relatively quiet for economic news in Europe. Of note was a upward revision of 2013 economic forecasts from Germany's economic ministry. The ECB issued their monthly bulletin and stated they continue to monitor the economy very closely, but they do expect an increase in economic activity in the latter half of 2013. Contrary to this is the latest news from two of Europe's largest trading partners the US and China. Lower than expected activity in core export markets will be of concern. With completely moribund domestic Europe growth, foreign market activity for European exports are central to improving Europe's fortunes. The latest industrial production numbers were neutral with the current months ahead of expectation, but the previous number being revised down. This week sees German economic sentiment and European inflation numbers released later today and these will be closely watched.

United Kingdom
The UK economy was off the market radar last week, with just better than expected manufacturing numbers offering any focus. This week offers more, with the latest inflation numbers due later today. Inflation has remained at stubbornly elevated levels in the last couple of years in the UK. Lower than expected numbers would certainly make further monetary stimulation more palatable at the BOE, and this is why the number will be closely watched. Unemployment data and the BOE monetary policy meeting minutes come tomorrow, ahead of the important retail sales numbers on Thursday. Any change in the vote split for further policy accommodation will be revealed in the BOE minutes, and these will offer the primary market focus.

Japan
There was little in the way of economic news in Japan last week. New BOJ Governor Kuroda continues to take opportunities to further explain his aggressive monetary policy stance. Ahead of the Group of 20 (G20) finance ministers meetings at the end of this week, expect further rhetoric about the BOJ stimulation being aimed purely at domestic issues, and not specifically at the level of the YEN. Thursday's trade balance numbers will be closely watched as usual, but in the current environment, will likely be of limited impact. In the last couple of sessions the market has seen sentiment swing quickly back towards risk aversion. The YEN has seen a strong pickup in demand as a consequence, especially against the Australian and New Zealand dollars. This kind of corrective move was to be expected at some stage after the massive downward pressure on the YEN seen over the last month or so. The YEN has already seen a retracement from its high levels set earlier today, so expect further volatility in the coming days.

Canada
Last week was a quiet one for economic news in Canada. Following the lacklustre BOC Business Outlook survey, the volatile building numbers survey came in below the 3.7% rise in expected activity, at just 1.7%. This week offers far more in terms of domestic focus in Canada. The manufacturing numbers later today start proceedings, with expectations of a .6% increase in activity. The BOC monetary policy announcement should see the cash rate unchanged at 1.00%, but the accompanying statement will be closely watched. Friday sees the release of the latest inflation and wholesale trade numbers and these will round out the focus for the week.
Major Announcements last week:

• Chinese Inflation 2.1% vs 2.5% expected
• UK Manufacturing +.8% vs +.4% expected
• Chinese trade Balance -.9B vs +15.2B expected
• Australian Unemployment rate 5.6% vs 5.4% expected
• US Retail Sales -.4% vs 0.0% expected
• Preliminary US Consumer Sentiment 72.3 vs 79.1 expected
• Chinese GDP 7.7% vs 8.0% expected
• Terror bombings in Boston boost risk aversion

1:50 PM (NZT)
Australia
The sole domestic focus of note in Australia this week has been yesterday’s employment numbers. The disappointing drop of 36.1k jobs was driven by a mix of falling part and full time employment. The unemployment rate increased .2% to 5.6% as a result and comes in against a market expectation of a unchanged unemployment rate of 5.6%. This result is not a good number and will keep the RBA on watch for further weakness in indicators. Softening indicators over the coming weeks and months would certainly see the easing bias towards future cash rate moves re-emerge. Also of indirect impact this week has been economic news from China. The latest inflation numbers undershot expectations and will have reduced the pressure on authorities to tighten monetary policy. The latest trade balance numbers show a trade deficit of .9billion USD. This is of interest as they had a surplus with the US of around 25 billion, and this means they will have had a significant deficit with their largest trading partner, Europe. Increasing import demand is a positive sign for the domestic Chinese economy, as well as the manufacturing sector in Europe. Both of these factors will be positive for the Australian economy overtime. Next week is a quiet one for Australian economic news, and sees the minutes from the last RBA monetary policy meeting offer passing focus. These minutes should not be of direct impact on price action next week.
 
New Zealand
This week has been a quiet one for economic news in New Zealand. The latest NZIER Business Confidence Survey reveals a consolidation of confidence at recently increased levels. The NZ Government bond market continues to see increased levels of interest from offshore investors as the relatively high interest rates remain attractive. Of material influence over the last couple of weeks appears to have been significant re-insurance flows, similar to those that we saw periodically throughout 2012. This would explain the recent latent demand for the NZD that has seen it increase materially on a trade weighted basis over the last few weeks. Next week sees Wednesday provide the focus in the form of the first quarter inflation numbers. These will be closely watched, but should be of limited impact on demand for NZD in the current environment.
 
United States
It has been a relatively quiet week for economic news in the US so far, though the latest retail sales and consumer sentiment numbers will be released later today. The minutes from the last Federal Reserve monetary policy meeting were released on Wednesday and revealed little in the way of new insight. In a similar vein to the previous minutes, they reveal discussion about the process of withdrawal of monetary stimulation, albeit that is a while off at this stage. As the soft nature of the economic activity for the 1st quarter has come to light, the potential withdrawal of stimulus has been pushed further out in the calendar. The prospect of a longer than expected QE stimulus program has renewed enthusiasm in the share markets that have again forged new highs this week. While longer term interest rates have bounced a little from their recent lows, consolidation at the current lower levels has certainly helped undermine demand for the US dollar in the short term. Next week sees the release of the latest inflation and manufacturing numbers provide the focus, and the corporate earnings season on Wall Street could also be of influence.
 
Europe
It has been a relatively quiet week for economic news in Europe. Of interest has been the increase in 2013 growth forecasts from the German economic ministry as the important European core economy recovers from its contraction in the 4th quarter of 2012. The ECB has also commented they will continue to monitor the economy closely, but expect a gradual recovery in growth in the 2nd half of the year. Europe is China's number one trading partner and this week’s Chinese trade deficit indicates increased Chinese demand for European goods. This is positive and a likely result of the lower level of the EURO over the last few months. Fragility remains in the periphery member states, but certainly the sentiment has been more resilient in the last couple of weeks. European finance minister meetings provide a focus in Europe over the weekend, and come ahead of economic sentiment and inflation numbers next week.
 
United Kingdom
There has been little of note to report in the UK economy this week. The latest manufacturing numbers were slightly better than expected and the trade balance slightly wider. Next week provides increased focus for the UK economy. Tuesday's inflation numbers start the week. Wednesday offers the latest employment numbers and Thursday the important retail sales numbers are due for release.
 
Canada
This week saw the release of the latest BOC Business Outlook Survey. This revealed a more tempered outlook over the coming 12 months than the previous survey. Businesses remain cautious of investment, although it remains positive, and hiring intentions were little changed.  The latest building permit numbers were slightly lower than expected. Next week sees the focus on the economy increase. The statement that will accompany an unchanged monetary policy decision from the BOC will be the primary focus. Manufacturing and inflation numbers provide further focus, albeit somewhat secondary in nature. 
 
Japan
This week has seen the release of the minutes from last week’s notable BOJ monetary policy meeting. The minutes show board members believe the economy has stopped deteriorating, although uncertainty still exists. The economy is expected to rebound to a "moderate recovery path". Separately, Governor Kuroda stated that the BOJ had done what was necessary and possible for now. There was room for patience to see how the aggressive policy impacts pricing pressures. The market will remained focused on statements from Governor Kuroda in the coming months, two of which will be on Monday. Thursday sees the latest trade balance numbers released and these will be closely watched as usual. The YEN remains under pressure across the board. This can be expected to continue as a trend, with brief periods of retrenchment providing opportunity to sell YEN at better levels. Targeting levels with limit orders provides the opportunity to benefit from what could be rapid moves.

4:45 PM (NZT)

Market Overview:
Last week was all about the aggressive front loading of monetary stimulus from the new BOJ leadership at their first monetary policy announcement. Governor Kuroda certainly did not disappoint. The subsequent pressure on the YEN has been significant and with little respite. Expect this to become a trend in the coming weeks if not months. The two year time frame to eradicate deflation in Japan is a big job, and expect joint policies from the BOJ and the government to be working towards this goal. This week sees just todays benign current account data offer any focus, and next week sees the release of the minutes from last week’s significant monetary policy meeting, and these will be closely watched.

Australia
The RBA maintained their recent "wait and see" approach as they left the cash rate stable at 3.00% last week. The following building approvals and retail sales data certainly supported this stance, with both beating the market expectations. The retail sales number was the most exciting with an upward revision of the previous number adding to the positivity created by 1.3% current monthly increase in activity. This week’s focus will be dominated by Thursdays employment number where a small 6.7k fall in jobs is expected along side a stable unemployment rate of 5.4%.

New Zealand
The NZ dollar has remained in demand over the last week. Any latent re-insurance flow demand for the NZD , has been ably joined by record dairy commodity prices being fetched as the scramble to secure product in the face of a NZ drought induced fall in expected production over the coming season. The latest NZ Institute of Economic Research Quarterly Survey of Business Opinion was released this morning. The sentiment increased to 23 from the previous level of 20, as the outlook remains relatively positive in New Zealand. Also of note has been the ongoing RBNZ warnings over the housing market. Yesterday saw further warnings from deputy Governor Spencer. He stated that "if the house price and credit expansion begin to fuel excessive consumption spending and inflationary pressures, a monetary policy response would become more likely". Certainly something to be kept in mind over the coming quarters. The remainder of the week is light on domestic focus with the Business NZ Manufacturing Survey on Thursday expected to be of limited impact.

United States
Last week saw further weakness in the US economy emerge in what has turned out to be a soft first quarter for 2013. Soft US manufacturing, services hourly earnings and employment numbers were released. The "participation rate " (those actively working or looking for work) fell to the lowest levels since 1979, and is the kind of number that will ensure the FED remain aggressively trying to stimulate the labour market via their ongoing quantitative easing program (buying bonds to lower longer term borrowing costs). The pending lower levels of central government spending further re-iterate this likelihood. This week sees the minutes from the previous FED monetary policy meeting released on Wednesday, and retail sales and consumer sentiment on Friday. The US dollar has seen pressure across the board of late, with the exception of the YEN. Any rebound in this, will likely be aided by a stronger set of economic data, which seems unlikely in the short term.

Europe
Last week unsurprisingly saw further weak economic data emerge in Europe. Manufacturing numbers were led lower by slumps in Spanish and Italian activity. However, there was increasing resilience in the market for EURO, as weak news in the US came to light. The ECB statement accompanying their unchanged monetary policy announcement also added to EURO demand as the sentiment was not as "dovish" as the market expected. The lack of commitment towards a lower cash rate has seen the probability for a cut to the cash rate moved out from the May meeting to the June meeting. This week sees industrial production numbers come to the fore as well as the ongoing influence of Cyprus, Greece and the Italian political standstill.

United Kingdom
Last week was relatively quiet for economic news in the UK. The Bank of England (BOE) left monetary policy unchanged as expected for the most part. The minutes from the meeting next week will reveal whether or not the bias towards further quantitative easing has increased. Manufacturing and construction numbers were lower than expected, but were somewhat balanced by surprisingly high activity in the services sector. Of note also was the re-affirmation of the AAA credit rating by ratings agency S&P. This week is also on the quiet side for economic news, with further manufacturing numbers providing a focus alongside second tier GDP and retail sales indicators.

Japan
Last week was all about the aggressive front loading of monetary stimulus from the new BOJ leadership at their first monetary policy announcement. Governor Kuroda certainly did not disappoint. The subsequent pressure on the YEN has been significant and with little respite. Expect this to become a trend in the coming weeks if not months. The two year time frame to eradicate deflation in Japan is a big job, and expect joint policies from the BOJ and the government to be working towards this goal. This week sees just todays benign current account data offer any focus, and next week sees the release of the minutes from last week’s significant monetary policy meeting, and these will be closely watched.

Canada
All the Canadian economic news came out on Friday last week. Materially weaker than expected employment growth numbers negate the strength from the previous month, and the unemployment rate edged higher to 7.2%. The trade balance was also worse than expected, on the back of lower exports, and increased import demand. Balancing these were stronger than expected manufacturing numbers, and this gave some level of respite to the Canadian dollar that saw periods of intense pressure throughout the week. Yesterday saw the release of the latest Bank of Canada (BOC) Business Outlook Survey and this was a little mixed. The numbers were a little stronger in the near term, but activity for the next 12 months does remain at pressured levels.

Major Announcements last week:

• The BOJ  make aggressive stance on deflation fight
• The ECB leave monetary policy unchanged
• The BOE leave monetary policy unchanged
• The RBA leave monetary policy unchanged
• US Manufacturing 51.3 vs 54.2 expected
• US Services 54.4 vs 55.9 expected
• AU Retail Sales +1.3% vs +.3% expected
• UK Services 52.4 vs 51.4 expected
• UK Manufacturing 48.3 vs 48.9 expected
• CAD Employment +54.5k vs +6.8k expected 
• US Employment +88k vs +198k expected
• CAD Manufacturing 61.6 vs 52.4 expected

4:25 PM (NZT)
Australia
It has been a positive week for news in the Australian economy. The economic data has been stronger than expected across the board with the trade balance, building approval numbers and retail sales data all performing well. The main focus for the week was the RBA monetary policy announcement on Tuesday. The unchanged cash rate was widely expected and the "wait and see" approach towards further easing to the cash rate, certainly looked well placed as the positive data followed later in the week. Next week sees the monthly business and consumer confidence numbers provide a focus ahead of the all important employment market data on Thursday. 
 
New Zealand
It has been a relatively quiet week for economic news in New Zealand this week. Much of the focus came from the continued surge in dairy price at Fonterra's Global Dairy Trade (GDT) auction. Prices leapt another 14.2% on the trade weighted basis and hit record high levels since the auctions started 5 years ago. However, the positive sentiment for the NZD should be tempered by the falling volumes that transact as prices rise. Also of influence this week seems to have been another surge of re-insurance flows into NZD for  the Christchurch insurance pay outs. This kind of sporadic increase in demand for the NZD has become a feature over the last couple of years, and the timing on the flows is impossible to predict. Next week is again quiet for economic news in NZ, with the quarterly NZIER Business Confidence survey on Tuesday providing the dominant local focus.
 
United States
The recent softer tone of US economic data continued this week. Both important manufacturing and services numbers disappointed. Longer term interest rates reacted accordingly with their retracement from higher levels. This kind of softer patch for an economy is typical for a recovery, and should be anticipated after the trauma since 2008. Yesterday’s powerful easing policy will have flow on effects that stimulate most economies through pushes interest rates lower and the US will benefit from that over the medium term. The latest employment numbers come to light later today and will offer a intense final focus for the week.
 
Europe
It has been an interesting and mixed week for the outlook in Europe. In line with the global trend, the latest manufacturing numbers in Europe came out showing a larger contraction than expected. This was slightly offset by a rebound in the fortunes of the services sector. Unemployment and inflation measures were largely as expected. Peripheral member bond auctions (borrowing to fund debt) were reasonably well received, and this indicated that sentiment towards the ECB's monetary policy announcement had a skewed bias towards a lower cash rate. ECB head Draghi remains open minded on lower interest rates, but the move is reliant on continuing softness of European economic news. Demand for Euro's was volatile following the ECB statements, finally resulting in quite a scramble to buy EURO. Next week will see the Eurogroup (European finance ministers) meetings provide a focus.
 
United Kingdom
The UK economy has been somewhat on the sidelines this week, with larger issues at play in the wider market. Manufacturing and construction numbers were mildly disappointing, while overnight the services sector registered larger gains than expected. Also overnight was an unchanged monetary policy decision from the Bank of England (BOE), which added to the end of week (and much needed) positive sentiment for the GBP. The minutes from the previous meeting of the BOE monetary policy committee showing voter split moving towards more policy accommodation. Taking this into account would explain the relief rally from the GBP following the unchanged decision. Next week will see retail sales a housing numbers provide the focus along side further manufacturing data.
 
Canada
There has been no Canadian economic news so far this week. This changes later today with the latest employment, trade balance and manufacturing numbers due for release. Price action of the CAD against the likes of the Australian and New Zealand dollars remain within recent ranges, elevated in favour of the antipodeans and offering good value buying of CAD with both currencies. Next week will see the Bank of Canada's Business Outlook Survey and the monthly building permit data the domestic focus.
 
Japan
This week has been all about the new Bank of Japan (BOJ) leadership group and their first monetary policy announcement yesterday. Expectations were high and Governor Kuroda certainly delivered. The BOJ will double the size of their longer end government bond purchases. This is an effort to materially lower the borrowing costs for businesses, and increase pricing pressure to eliminate deflation, and push inflation back up towards the new 2% target within his two year horizon. They have front loaded a commitment to do anything they can to drive the deflationary pressure from the stagnant Japanese economy. The corresponding YEN depreciation has been significant and across the board, which of course is a widely expected consequence of such aggressive policy from the new leadership in both Government and the BOJ.

4:00 PM (NZT)
Market Overview:
The major themes continued throughout the shortened trade of Easter markets over the last week. Elevated Europe uncertainty has capped material appreciation of the Euro, with Cyprus and the Italian political landscape undermining sentiment. The economic data has been mixed around the globe. Softer economic data in the US providing a timely reminder to investors of the staggering nature of the economic recovery. Chinese indicators continue to recover, albeit not quite at the pace of analyst’s expectations. This week sees a return of focus on central banks. The respective central banks of Australia, Japan, the United Kingdom and Europe all make monetary policy announcements this week. The Bank of Japan (BOJ) will likely provide the most interest with the new leadership needing to make their mark immediately.

Australia
The shortened last week in the Australian economy saw the latest private sector credit numbers come in close to expectations. The stubbornly elevated nature of the AUD will provide some on going headaches for the RBA as they contemplate monetary policy over the coming months. The interest rate market is still pricing a further 25pts of easing to the cash rate by year end, but this easing bias has been steady eroded over the last few months. The adoption of a wait and see approach from the central bank comes as the Chinese economy stabilises, and the effects of previous cash rate reductions flow through the economy. Today's monetary policy statement will likely be of limited impact. The remainder of the week sees trade balance, building approvals and the important retail sales numbers provide further insight to the economies health.

New Zealand
It has been a relatively quiet period for economic news over the Easter week. The important dairy sector received a boost of an increased forecast pay out with the recent jump in auctions prices materially impacting the pressured industry. The pay out expectation was lifted to 6.12 NZD per kilo of milk fat and will cushion the blow of lower production volumes following the drought in early 2013. The latest ANZ Business Confidence survey revealed a pull back in sentiment. This is somewhat unsurprising given the elevated levels on this survey of late. This week sees little in the way of scheduled economic news, so expect demand for the NZ dollar to be driven by external factors. Certainly the ongoing uncertainty in wider Europe is benefiting the relatively stable and insulated high yielding currencies of New Zealand and Australia. This theme is likely to continue in the near term.

United States
Last week saw the US economy hit a softer patch of economic data. Lower than expected durable goods sales, consumer sentiment, housing and manufacturing numbers undermined the demand for US dollars and led to a move lower in longer term interest rates. This week sees a number of FED board members due to make on the record speeches, and this will provide further insight to the boards thinking. But the primary focus comes from the employment numbers on Friday. These provide a clear indicator of what impact the quantitative easing program is having, with around 200,000 jobs expected to have been added for the month.

Europe
Unsurprisingly the sentiment remains poor in Europe. The banking sector faces pressure as investor concerns about the safety of deposits rings loudly following the developments in Cyprus. Adding to the mix is the ongoing political stalemate in Italy, with fresh elections the likely outcome at this stage. The Europe Central Bank (ECB) monetary policy decision on Thursday will be closely watched. Whilst no change to monetary policy is expected, the insight from the ECB is always closely followed.This monetary policy statement follows the important manufacturing and employment numbers for the wider economy early in the week.

United Kingdom
Last week saw further weak data come in the UK. Fourth quarter GDP contraction was confirmed at .3% and the trade balance was slightly wider than expected. This week is a busy one for economic news. Manufacturing, house prices and construction data all come before what should be an unchanged monetary policy announcement from the BOE on Thursday. The BOE meeting minutes in a couple of week's will reveal more about the current thinking on the level of quantitative easing. Debate continues on the value of any additional policy accommodation. Whilst the GBP remains under pressure from both the Australian and New Zealand dollars, it sits off the lows despite the weak economic news. This is because the GBP sees increased capital flows when uncertainty increases in Europe. This is likely to continue in the short term at least, and helps explain any latent demand seen for the GBP.

Japan
Last week was a mixed one for economic news in Japan. Retail sales were materially weaker than expected, but household spending beat expectations. Importantly the latest inflation numbers were slightly better than expected at -.5%. These pieces of data came with a back drop of this week’s BOJ monetary policy meeting. Thursday BOJ announcement will be the first for the new leadership and expectations are for increased policy initiatives what will help foster growth. Any disappointment would be detrimental to the wider efforts to curb YEN strength and provide an easier back drop for the struggling Japanese export sector. With a 40% increase in the Japanese stock market in the last year, and a material move lower in longer term Japanese interest rates, any under delivery from Governor Kuroda will have material market impacts.

Canada
It was an interesting last week for the Canadian economy. The latest inflation numbers were materially higher than expected and will add pressure to the BOC's monetary policy decision if a trend of higher inflation is established. GDP numbers were also slightly higher than market expectations, with the month seeing +.2% growth against the expected +.1% rise. This week sees the focus now turn to Friday. The latest manufacturing, trade balance and employment numbers are all scheduled for release. The employment numbers provide the primary focus with an unemployment rate of 7.0% expected.

Major Announcements last week:

• US Durable Goods Sales -.5% vs +.7% expected
• US New Home Sales 411k vs 426k expected
• ANZ NZ Business Confidence 34.6 vs 39.4 previous
• UK Current Account -14.0B vs -12.8B expected
• Canadian Inflation +.8% vs +.3% expected
• Canadian GDP +.2% vs +.1% expected
• US Manufacturing 51.3 vs 54.2 expected
• Chinese Manufacturing 50.9 vs 51.6