SNB at 8:00 AM. US and Canada Trade data due at 8:30
The SNB will announce their interest rate decision at 8:00 AM. The expectation is for unchanged rates. What will be of interest is if they change the wording on the value of the Swiss Franc. Will they keep the wording the same at “it would prevent an ‘excessive’ rise in the franc” . The EURCHF is down at 1.4600 level – testing the SNB to address the currency in the comments. The EURCHF had been using 1.4630 as the floor previously. If they keep the language look for a further bias to the downside for EURCHF and possibly USDCHF. The central bank is concerned about too strong a currency being deflationary but if global growth is rebounding, it may be ok at this moment. If they keep the language, look for 1.4630 to cap the topside for the EURCHF. The bottom will be explored to see how low it can go.
At 8:30 the US Trade Deficit will be released. The expectation is for a $41.0 billion gap versus $40.2B last month. The Trade Deficit has been getting larger again. This is a drain on GDP growth (the inflation adjusted Trade Balance is the one that is used for GDP). A larger deficit should lead to a weaker dollar.
Also at 8:30 will be the weekly Unemployment Claims. The expectations for Claims is for a slight fall to 460 K from 469 K. Continuing Claims are expected to come in at 4500K unchanged from last week. The employment picture has stabilized from an Initial Claims standpoint over the last month or so. Some suggest it may be weather related. If so, we should start to see the thaw soon.
Canada will release their Trade Balance with a 0.2B surplus expected after a -0.2B deficit last month. They also release Capacity Utilization which is expected to rise to 70.0% from 67.5%. The New Housing Price index is expected to show a 0.4% rise, the same as last months rise.
