European FX Close - Usd bends, but doesn't break after another weak US data run

It was another day of poor US data, but the Dollar continues to bend, but not break.

First up was the first look at the trade data for March. US trade data is often an overlooked number, but the advanced reading for a record deficit of Usd 161.99bln in March is likely to draw the ire of a certain someone in the White House. A narrowing of the deficit in March to Usd 145bln had been expected. Tariff front-running was to blame, with imports of consumer goods soaring by 27.5%. Trade now looks set to be a drag on Q1 growth, with the first look released tomorrow.

Next up were JOLTS and consumer confidence. JOLTS job openings for March came in at 7192k, way below the 7500k consensus forecast, while the Conference Board's consumer confidence reading for April fell further to 86.0 from 93.9 in March. The 86.0 reading was the lowest since May 2020, when the COVID shutdowns were at their peak. The present situation reading held up pretty well, only falling to 133.5 from 134.4, but expectations crumbled to 54.4 from 66.9, which is incredibly the lowest level since 2011.

After the data Usd/Jpy sold off to 142.00, just a pip higher than yesterday's post Dallas Fed low reading of 141.99. Eur/Usd rose to 1.1417 after the late numbers, but was also unable to scale yesterday's highs of 1.1425.

The highly anticipated press conference from US Treasury Secretary was all talk and no action, as the stalemate with China continued. Bessent declared that tariffs are unsustainable for China, while stating that the US has had substantial talks with Japan, before adding that there are chances of a trade announcement with India and South Korea.

Earlier, ahead of the EZ CPI estimate on Friday, Spanish CPI came in faster than expected, while Q1 growth missed forecasts to the downside. Meanwhile ECB inflation expectations came in much faster than expected rising to 2.9% from 2.6% for the one year metric and to 2.5% from 2.4% for three years.

European M3 money supply fell to 3.6% y/y in March way below the 4% forecast and the downwardly revised 3.9% reading in February.

Newly elected Canadian Prime Minister Carney stated that the old relationship with the US is over. Meanwhile, the opposition Conservative leader Poilievre lost his seat.

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