Daily Morning Report 17.03.2016

The Aussie gained in Asia on Thursday as overall jobs data buoyed sentiment and the yen weaker on trade with investors noting caution by the Fed in the latest monetary policy review.

In Australia jobs data showed a gain of 3,000 jobs in February, less than the 10,000 seen, under a participation rate of 64.9%, less than 65.2%, and an unemployment rate of 5.8%, below the 6.0% expected.

In Japan, the adjusted trade balance for February came in at a surplus of ¥170 billion, narrower than the ¥240 billion seen. Exports fell 4.0% year-on-year, more than the 3.1% drop seen, and imports slumped 14.2%, a bit less than the 15.2% expected.

Earlier, New Zealand said fourth-quarter GDP rose 0.9% quarter-on-quarter, beating the 0.6% gain expected.

The Federal Reserve lowered expectations for rate hikes this year bringing their forecast more in line with market expectations as they held off on raising their policy rate at the latest Federal Open Market meeting on Wednesday.

As expected the Federal Open Market Committee left rates unchanged at the 0.25% to 0.50% range at the end of their two-day meeting but made a few changes to the post-meeting statement and downgrades to their accompanying economic forecasts.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was last quoted at 95.80, up 0.10%

Overnight, ahead of the meeting, the dollar pushed higher against the other major currencies on Wednesday, after the release of mixed U.S. data.

The U.S. Commerce Department said that housing starts rose 5.2% in February to hit 1.178 million units from January’s total of 1.120 million units. Analysts had expected a rise of 4.6% to 1.150 million. Meanwhile, the number of building permits issued declined 3.1% to 1.202 million units last month from January’s 1.204 million.
Economists had forecast a drop of 0.1% to 1.167 million units in February.

A separate report showed that the U.S. consumer price index fell by 0.2% in February, matching expectations. Year-over-year, consumer prices were 1.0% higher.

Core CPI, which excludes food and energy, increased at an annualized rate of 2.3% last month, compared to expectations for a 2.2% gain. Data also showed that U.S. industrial production decreased by 0.5% last month, worse than expectations for a decline of 0.2%.