The minutes from the Fed showed that inflation is still of a concern and further firming policy might be needed. US stocks dropped after the statement. 10yrs more or less unchanged, but bunds lower.
 

Overnight News Bullets

• GE Wholesale Prices MoM/YoY (Mar) out at 0.5%/3.1% as expected.
• FR Trade Balance (Feb) out at -2.7B vs. -2.8B expected.
• SW Industrial Production MoM/YoY (Feb) out at 1.3%/6.8% vs. 1.0%/6.5% expected.
• NO Industrial Prodction MoM/YoY (Feb) out at -0.9%/-1.6% vs. -0.2%/4.7% vs. -0.5%/4.0% prior.
• US MBA Mortgage Applications out at -0.4% vs. -3-2% prior.
• CA Housing Starts (Mar) out at 210.9K vs. 215K expected.
• US DOE Inventories: Crude and Gasoline showing a draw, Distillates building.
• UK Leading Indicators (Feb) out at 0.8% vs. 0.3% prior.
• UK Coincident Indicator (Feb) out at 0.2% vs. -0.1% prior.
• US Monthly Budget Statement (Mar) out at -$96.3B vs. -$90.0B
• US Fed Minutes ??“ further firming policy may be needed.
• UK RICS House Price Balance (Mar) out at 25.5% vs. 21.0% prior.
• JN CGPI MoM/YoY (Mar) out at 0.3%/2.0% vs. 0.1%/1.9% expected.
• AU Unemployment Rate (Mar) at 4.5% vs. 4.6% expected.
• AU Participation Rate (Mar) at 64.8% vs. 64.9% expected.
   

Markets

• FX: EURJPY and EURUSD rallying after Fed Minutes.
• Fixed Income: Bunds going lower, 10yrs unchanged. JGB??™s falling.
• Stocks: Europe little lower, US down around 0.7% after Fed minutes. Nikkei down 0.7% today.
• Commodities: Precious metals weak. Oil continue higher.
   

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• The March FOMC meeting showed a different tone to their statement, which gave the market the feeling that the Fed will be on hold for some time to come. The growth forecast for Q1 has been lowered, but inflation remains a concern expressed by all participants.....which calls for stagflation lite.
• We still believe that the Pound remains undervalued in the short run and the bond market is still prcing in two additional rate hikes from the next three BoE meetings. This has is yet to priced in the FX market, so we are still certain that GBP strength is to come.

FX