BREAKING: USD drops after big UoM data miss

The University of Michigan released a flash consumer sentiment index for March today at 2:00 pm GMT. Data turned out to be much worse than the market expected. Headline index slumped from 67.0 to 63.4 as current conditions and expectations subindices missed expectations significantly. On a positive note, both short- and long-term inflation expectations dropped compared to the previous month.

University of Michigan flash data for March

• Consumer sentiment index: 63.4 vs 67.0 expected (67.0 previously)

• Current conditions subindex: 66.4 vs 70.5 expected (70.7 previously)

• Expectations subindex: 61.5 vs 64.8 expected (64.7 previously)

• 1-year inflation expectations: 3.8% vs 4.1% expected (4.1% previously)

• 5-10 year inflation expectations: 2.8% vs 2.9% expected (2.9% previously)

USD dollar moved lower in a knee-jerk move while equity markets ticked higher. However, scale of the moves was relatively small - EURUSD moved 0.1% higher while US500 gained around 0.3% in the first few minutes following the release.

Weak University of Michigan reading for March and resulting weakening of US dollar allowed EURUSD to bounce off the 200-hour moving average (purple line). Source: xStation5