Monday, April 17, 2017

Markets liquidity was constrained as major markets were closed the long Easter weekend. Data gave good reason for dollar declines with both the CPI and retail sales missing

Market Roundup
  • Markets liquidity was constrained as major markets were closed the long Easter weekend. Data gave good reason for dollar declines with both the CPI and retail sales missing expectations. The headline CPI fell 0.3% for the moth versus the expected no change. For the year it came in at 2.4%, 0.2% lower than expectations. Core prices fell 0.1% monthly versus the expected 0.2% gain while for the year it came in 0.3% below expectations at 2.0%. This is the worse 2 month drop in 2 years. The declines in prices were due to fall in energy prices with the gasoline index falling by 6.2%. Core CPI in the same manner saw its biggest monthly decline since January 2010.
  • Ringgit govvies extended gains on the back of lower UST yields, following comments made by President Trump during mid-week on his preference for weaker USD and low interest policy. On top of that, flows for safe haven assets amid escalating geopolitical tension, also aided the bond markets ahead of the weekend.

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