Morning Snapshot
13-Mar (USAGOLD) — Gold slipped deeper into the range in early New York trading, weighed by fresh dollar gains as the euro slipped to new 4-week lows. A generally stronger dollar tone has emerged recently amid ongoing worries over events in Europe. The greenback also got a boost yesterday when the PBoC sharply lowered the midpoint of the yuan range against the dollar in reaction to the troubling swing to a trade deficit.
Despite the dollar’s gains, stocks are being supported by an ever-so slightly better than expected retail sales print for February, and a favorable revision to January’s data. While business inventories grew more than expected in January as well, shipments rose by a similar amount, leaving the I/S ratio unchanged for a 6th consecutive month. When the dollar and stocks are higher simultaneously, generally gold is going to be suppressed. However, much of those early losses have already been retraced, leaving support at 1677.50 well protected.
Now the market’s attention will turn to the Fed’s FOMC statement at 18:15 GMT. The FOMC is not expected to significantly alter its policy statement today, although recent talk of “sterilized” bond purchases will have all the Fed watchers trying to read between the lines with regard to likelihood and timing. No discernible indication of impending additional quantitative measures may deflate the stock market somewhat, which could offer a later boost to gold.
• US business inventories +0.7% in Jan, above market expectations of +0.5%, vs upward revised +0.6% in Dec.
• US retail sales +1.1% in Feb, near market expectations of +1.0%, vs upward revised +0.6% in Jan; 0.9% ex-autos.
• CPI for Feb: France 2.3% y/y. Spain 2.0% y/y. Italy 3.3% y/y. Sweden 1.9% y/y.
• UK Trade Balance – Visible -£7.5 bln in Jan, inside market expectations of -£7.8 bln, vs downward revised -£7.2 bln in Dec.
• Germany ZEW Economic Sentiment surged to 22.3 in Mar, well above expectations of 10.0, vs 5.4 in Feb; current situation falls to 37.6, vs 40.3 in Feb.
• Russia trade surplus ticks higher to $20.5 bln.
• Japan Tertiary Industry Index (sa) -1.7% m/m in Jan, vs upward revised 1.8% in Dec.
• BoJ hold steady on Target Overnight Call Rate at 0%-0.1%, in-line with expectations.
