Market Roundup
• US March import prices -0.2% (forecast -0.2%) vs. Feb +0.4% (previous (+0.2%).
• US March Petroleum import prices -3.6% vs. Feb +1.3%.
• Bank of Canada holds o/n interest rate at 0.50%; says econ growth faster than expected but too early to conclude economy on sustainable growth path.
• Bank of Canada raises Q1 annualized growth f/c to 3.8% from 2.5%, sees 2.5% in Q2; raises 2017 avg. to 2.6% from 2.1%.
• Bank of Canada: Cannot reliably model possible outcomes of potential US trade policies.
• Canadian home prices rise 0.9% in March from February – Teranet.
• Fed’s Kaplan: Expects to see more slack taken out of the labor market, inflation to rise toward 2%.
• Fed’s Kaplan: US probably can’t increase debt any more to boost GDP growth.
• Fed’s Kaplan: Decline in 10-year yield suggests market belief that GDP growth will be tepid.
• Fed’s Kaplan: As long as we are making progress on dual mandate, should be removing accommodation; We can afford to be gradual and patient.
• Fed’s Kaplan: Fed’s plan to trim the balance sheet does not alter his view on path of rate hikes.
• Pres. Trump: “Had a very good call last night with the President of China concerning the menace of North Korea”- Twitter.
• Russia’s Foreign Ministry Spokeswoman: Syrian Foreign Ministry to visit Moscow on April 13-15 –TASS.
• U.S. Sect of State Tillerson says current state of US-Russian relations are at low point, with low level of trust.
• Tillerson reiterates need for full implementation of Minsk accords. Assad exit final outcome for Syria.
• Russian Foreign Minister Lavrov says Putin confirmed readiness to restore US-Russia air safety agreement over Syria.
Looking Ahead - Economic Data (GMT)
• 21:30 New Zealand Mar Mfg PMI no forecast prior 55.2
• 22:45 New Zealand Mar Food Price Index no forecast prior 0.2%
• 23:01 UK Mar RICS Housing Survey forecast 22 prior 24
• 01:30 Australia Mar Employment forecast 20.0k prior -6.4k
• 01:30 Australia Mar Unemployment Rate forecast 5.9% prior 5.9%
• 01:30 Australia Mar Participation Rate forecast 64.6% prior 64.6%
• 01:30 Australia Mar Full Time Employment no forecast prior 27.1k
• 02:00 China Mar Trade Balance USD forecast 10.00B prior -9.15b
• 02:00 China Mar Exports y/y forecast 3.2% prior -1.3%
• 02:00 China Mar Imports y/y forecast 18.0% prior 38.1%
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0562 levels and currently trading at 1.0670 levels. The pair has made session high at 1.0671 and hit lows at 1.0587 levels. The euro rose sharply against the greenback in the late US session on Wednesday as investors sold greenback after U.S. President Donald Trump told The Wall Street Journal he would prefer the Federal Reserve to keep interest rates low. Trump also said he likes and respects Federal Reserve Chair Janet Yellen, whose term ends in 2018, although he was critical of her during his presidential campaign. Trump's views on the Fed and interest rates, came as the dollar traded earlier in a tight range with safe-haven demand tied to international political worries. Investor was worried on Wednesday as possible U.S. military showdowns against Syria and North Korea remained at elevated levels as they piled into safe-haven assets. Meanwhile, there was some relief as U.S. Secretary of State Rex Tillerson's closely watched visit to Russia did not lead to a heightening of tensions. The dollar index which tracks the U.S. currency against six major rivals, fell to its lowest since March 30 after the news. The euro rose 0.6 percent against the dollar to a 6-day high of $1.0671.
GBP/USD is supported in the range of 1.2450 levels and currently trading at 1.2540 levels. It reached session high at 1.2543 and dropped to session low at 1.2479 levels. Sterling rose against the dollar on Wednesday after data showing stronger-than-expected wage growth brought some relief to investors concerned about the economic impact of Britain's decision to leave the European Union. Workers total earnings including bonuses rose by an annual 2.3 percent in the three months to February, unchanged from the previous period and beating economists' expectations. The unemployment rate held steady at an almost 12-year low of 4.7 percent, in line with forecasts. Sluggish wage growth has been cited as one reason the Bank of England is in no hurry to raise interest rates despite inflation holding steady above its 2 percent target for the second month running. Sterling touched $1.2543, its highest level in nine days, It was last trading 0.2 percent higher on the day at $1.2531.
USD/CAD is supported at 1.3200 levels and is trading at 1.3245 levels. It has made session high at 1.3326 and lows at 1.3244 levels. The Canadian dollar strengthened against its U.S. counterpart on Wednesday after Bank of Canada's left interest rate unchanged and offered a tentative nod to recent signals of strength in the economy. The Bank of Canada, as expected, held rates steady and said recent economic growth has been faster than expected. Still, it cautioned that it was too soon to conclude the Canadian economy was on a sustainable growth path. Gains for Canada's risk-sensitive currency came as a break in alarming international political news cooled a safe-haven rally that saw the yen and gold at five-month highs and top-rated government bond yields at their lowest this year. Oil prices reversed earlier gains after a report on U.S. crude stockpiles suggested the market was still heavily supplied. The Canadian dollar gained around 0.40 percent against the U.S. dollar, last trading at C$1.3253 to the greenback, or 75.35 U.S. cents, stronger than Tuesday's close of C$1.3332, or 75.01 U.S. cents. It marked the strongest level for the currency since Feb. 28.
AUD/USD is supported around 0.7450 levels and currently trading at 0.7518 levels. It hit session high at 0.7520 and made session lows at 0.7472 levels. The Australian dollar strengthened against US dollar on Wednesday after dollar was pressured by lingering geopolitical concerns and President Donald Trump's comments on the dollar and interest rates.U.S. President Donald Trump said the dollar was "getting too strong" and that he would prefer that the Federal Reserve keep interest rates low. Trump also said, during an interview with the Wall Street Journal, that his administration would not label China a currency manipulator, reversing a campaign trail pledge to do so. He also left open the possibility of renominating Federal Reserve Chair Janet Yellen when her term expires next year. Trading Wednesday was also heavily influenced by rising U.S. tensions with Russia, North Korea and Syria after U.S. missile strikes in Syria last week and the moving of U.S. warships toward the Korean Peninsula. Oil prices ended lower after reversing earlier gains due to a report on U.S. crude stockpiles. Oil futures turned negative after eight straight sessions of gains on the U.S. inventory data suggesting persistent oversupply.
Equities Recap
European shares inched up on Wednesday, steadying around 16-month highs, helped by gains in Syngenta and a rally in defence stocks on investor concerns about lingering geopolitical risks.
The UK's benchmark FTSE 100 closed down by 0.2 percent, FTSEurofirst 300 ended the day up by 0.15 percent, Germany's Dax ended up 0.2, and France’s CAC finished the day up by 0.1 percent.
U.S. stocks eased on Wednesday as investors sought shelter in defensive shares and other low-risk assets amid lingering geopolitical concern.
Dow Jones closed down by 0.31 percent, S&P 500 ended down 0.39 percent, Nasdaq finished the day down by 0.52 percent.
Treasuries Recap
U.S. Treasury yields fell to session lows on Wednesday after U.S. President Donald Trump told The Wall Street Journal he would prefer the Federal Reserve to keep interest rates low.
The yield on benchmark 10-year Treasury notes fell to 2.259 percent, the lowest level since Nov. 17, before rising to 2.280 percent, which was down 2 basis points from late on Tuesday.
Commodities Recap
Oil futures fell on Wednesday, pulling back after eight straight sessions of gains after U.S. crude inventory data suggested the market was still heavily supplied.
Brent crude futures settled down 37 cents to $55.86 a barrel after hitting a one-month high of $56.65.
U.S. West Texas Intermediate crude futures were down 29 cents and settled at $53.11 a barrel after touching the highest since March 7 at $53.76.
Gold steadied on Wednesday after hitting a five-month peak as the dollar reversed losses and political tensions simmered, leaving investor interest in safe havens like the precious metal largely intact.
Spot gold was mostly unchanged at $1,274.8 per ounce by 2:33 p.m. EDT (1833 GMT). It hit its strongest since Nov. 10 at $1,279.80 earlier, extending the previous session's near 2 percent gains .U.S. gold futures rose 0.3 percent to settle at $1,278.1.
