CANADA DATA: Residential Building Permits Hold Up Amid Commercial Pullback
As noted earlier ("Canada Mar Building Permits Fall But Q1 Shows 5th Straight Increase"), Canadian building permits fell 4.1% M/M in March, below the -1.2% expected though offset by a 2pp upward revision to prior (4.9%).
- The non-residential sector's drop of -14.5% M/M - due largely to a fall in commercial permits - was the worst outturn in 18 months, and particularly concerning in the context of the ongoing trade war with the US. The report notes, "The reduction in commercial construction intentions in March 2025 was most pronounced in Ontario (-$268.6 million), and it was supported by declines in British Columbia (-$187.1 million), three additional provinces and two territories."
- The value drop in non-residential (CAD$716.3M), was offset by overall higher residential sector permits (CAD166.9M). Residential permits were mixed, with multi-family up 2% but single-family down 5.3%.
- Residential permits have held up despite both housing starts and existing home sales falling to around post-Covid lows.
- Overall permits are up 15% Y/Y, and despite the March decline, on a quarterly basis they rose for the 5th consecutive quarter. This suggests scope for further housing construction gains (around 2/3 of total permits) in coming quarters, though consensus via Bloomberg shows flattening housing starts (233-235k per quarter through Q2 2026, vs 248k in Q4 2024), the pullback in non-residential intentions could pose downside risks to fixed investment.
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AUDUSD TECHS: Nears Reversal Trigger
- RES 4: 0.6409 High Dec 9 and a key resistance
- RES 3: 0.6389 High Apr 3 and a reversal trigger
- RES 2: 3.0% 10-dma envelope
- RES 1: 0.6343 High Apr 14
- PRICE: 0.6324 @ 15:54 BST Apr 14
- SUP 1: 0.6222 20-day EMA
- SUP 2: 0.6116/0.5915 Low 10 / Low Apr 9 and the bear trigger
- SUP 3: 0.5830 2.000 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 4: 0.5729 2.236 proj of the Sep 30 - Nov 6 - 7 price swing
AUDUSD maintains a firmer short-term tone following a strong reversal last week. The pair has breached the 50-day EMA, at 0.6265. The break of this average strengthens the reversal and signals scope for a continuation higher, towards 0.6389, the Apr 3 high and the next important resistance. For bears, a resumption of weakness would refocus attention on 0.5915, the Apr 9 low and bear trigger. First support lies at 0.6222, the 20-day EMA.
US TSYS: Sentiment Gradually Improves on Possible Auto Tariffs
- Treasuries looked to finish near late Monday highs (TYM5 +30.5 at 110-22, yield -.1176 to 4.3720%), stocks firmer despite ongoing tariff uncertainty. Information Technology sector shares still lead gainers in late trade despite ongoing tariff uncertainty after Trump denied that US officials said smartphones, computers, and other consumer electronics were excluded from tariffs over the weekend.
- "There was no tariff exception" announcement Trump said, while officials are "looking at chips, whole electronics supply chain; chips to be assessed in national Security tariff probes." Nevertheless, "markets very strong once they got used to tariffs" Trump posted Monday.
- Sentiment improved after midday on a couple items: Pres Trump said he was "exploring possible exemptions to his tariffs on imported vehicles and parts" while Fed Gov Waller called for "flexible" monetary policy while also maintaining his view that the inflationary effects of tariffs are likely to be temporary.
- Initial greenback weakness was exacerbated by a more optimistic tone for risk sentiment, assisted by the tariff reprieves for key tech products (released late on Friday). This allowed the USD index to edge back towards Friday’s cycle low of 99.01. 5-year treasury yields are 14bps lower on the session, providing an additional dollar headwind.
- Looking forward to Tuesday's data calendar: Empire Manufacturing and Import/Export Price Index data at 0830ET followed by US Tsy $48B 52W & $70B 6W bill sales at 1130ET.
EURJPY TECHS: Trend Outlook Remains Bullish
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 163.55/164.19 High Apr 14 / High Mar 18 and the bull trigger
- PRICE: 162.88 @ 15:53 GMT Apr 14
- SUP 1: 160.98/158.30 50-day EMA / Low Apr 7
- SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle
- SUP 3: 155.60 Low Low Mar 4
- SUP 4: 154.80 Low Low Feb 28
Recent weakness in EURJPY appears corrective and the strong rally from the Apr 7 low reinforces a bullish theme. Key short-term support has been defined at 158.30, the low on Apr 7. A break of this level is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. For bulls, a continuation higher would expose 164.19, the Mar 18 high and the bull trigger.
