Even though March’s numbers were lower than February, March manufacturing sales were up a greater than expected monthly 1.4 percent thanks to higher sales at primary metal, aerospace product & parts, fabricated metal product and the other transportation equipment industries. Sales were up in 13 of 21 industries representing 72 percent of the manufacturing sector. Sales were up 6.4 percent from a year ago. In volume terms, manufacturing sales rose a monthly 0.6 percent.
Oil remains over $71 USD a barrel on WTI, the lower inventory numbers brought oil off its lows bringing it back to even on the day.
USDCAD 1.2795, 1.2781, 1.2774 1.2815, 1.2818, 1.2828
USD-CAD lifted to a three-week high of 1.2914 yesterday amid the broader phase of U.S. dollar buying. A pullback in oil prices also helped, which may have headed off potential demand for the Canadian dollar. The gain extends the rebound from the three-week low that was seen last week at 1.2719. The disappointing April employment out of Canada, in data released on Friday, which weakened BoC tightening expectations, helped give the pair a prop. The Canadian calendar has a flurry of releases from today through to the end of the week, culminating in April CPI data on Friday.
EUR-USD posted a five-month low at 1.1794. The latest down phase has been a mix of broader dollar firmness and a degree of euro underperformance linked to concerns about the Italy’s political evolutions, which seen the yields of Eurozone peripheral sovereign gap higher relative to the Bund yield. As for dollar buying, this has been driven by a spike in U.S. Treasury yields. Although softer today, the 10-year T-note hit a seven-year high above 3.03% yesterday, while Fed funds futures were, as of the PM session on Wall Street yesterday, fully pricing in at 25 bp tightening at the June 12th-13th FOMC while discounting about 80% odds for another quarter point hike by September. EUR-USD has resistance at 1.1910-12, and trend support comes in at 1.1743-44.