Week ending 27 March 2009: More sharp gains in global equities markets, plus crude sustaining above US$50/bbl, increased speculation although yields in one-month Treasuries fell back into negative territory. Economic and political gaffes fueled market movements ahead of the G20 meeting.

In a light Australian data week, the January Conference Board leading index improved to −0.6% from −1.1%. AUD/USD pushed briefly through strong resistance at 0.7050 then formed what could be the set-up for a double top formation, best seen on four-hour charts, closing at the potential neckline at 0.6924.

U.S. data surprised to the upside, with February existing home sales rising 5.1% m/m, new home sales 4.7%, and January housing prices 1.7%. The March Richmond Fed index improved dramatically to −20 from −51 previous and February durable goods rose 3.4% from −7.3 previous; however, the final estimate of 4Q2008 GDP was revised down slightly to −6.3%. February personal expenditure rose 0.2% while personal income fell −0.2%.

The ECB meets Thursday, 2 April, and is widely expected to cut rates 50bps to 1.0%. The January trade balance widened to a deficit of €10.5Bn from €1.7Bn previous and the current account to a deficit of €12.7Bn. March PMIs improved to 40.1 services, 34.0 manufacturing, and 37.6 composite, and the March German Ifo to 81.6 expectations, 82.1 business climate, and 82.7 current assessment. January Eurozone industrial new orders are down −34.1% y/y. EUR/USD lost 2.1% this forex trading week, falling hard on Friday to close at 1.3298.

U.K. 4Q2008 GDP was revised slightly lower to −1.6% q/q, −2.0% y/y. February CPI printed 0.9% m/m, 3.2% y/y, and 1.6% y/y core, while retail sales fell −1.9% m/m for a 0.4% y/y reading. March CBI distributive trades printed −44 and the current account narrowed to a deficit of £7.6Bn. GBP/USD spiked through resistance at 1.4650 before turning to close at 1.4299, while EUR/GBP fell as low as 0.9156 before closing at 0.9297.

An equally light Canadian data week saw the February Conference Board leading index decline to −1.1% from −0.9%. USD/CAD consolidated between 1.2200 and 1.2400, trading flat for the week, while AUD/CAD formed what may be a double top at 0.8655 with a neckline at 0.8530, best seen on four-hour charts as shown below:

New Zealand’s 4Q2008 GDP printed −0.9% q/q, −1.9% y/y, continuing the recession for the entire year. 1Q2009 consumer confidence fell to 96.0 and the 4Q2008 current account printed a deficit of NZ$4.026Bn; however, the February trade balance improved to NZ$4898M. NZD/USD continued its uptrend, closing at 0.5694, while AUD/NZD dropped strongly in the week to close at 1.2148.

Japanese trade continues to decline, with both February imports (−43.0%) and exports (−49.4%) dropping by historically large levels, with the merchandise trade balance printing a surplus of ¥82.4Bn. February CPI printed disinflation at −0.1% y/y, same for core prices, and retail trades fell −0.3% m/m, −5.8% y/y. USD/JPY recovered much of last week’s losses and resumed testing resistance at 98.60. EUR/JPY and AUD/JPY are also attempting to form double tops. EUR/JPY has a lopsided top with neckline at 130.61, closing beneath that point at 130.21. AUD/JPY could not force through resistance at 69.50, closing at 67.81, just above the potential neckline at 67.30.