Market Roundup
• Fed’s Williams: Have already overshot on Fed’s employment goal.
• President Trump says he explained to China’s Xi that a trade deal with the U.S. would be “far better for them if they solve the N. Korea problem”-Twitter.
• U.S. told Japan before Trump-Xi talks of option to strike N. Korea - Kyodo.
• Russia’s Putin: Russia has information that strikes being readied on Damascus region with aim of blaming Syrian Govt.
• White House Official: There is no evidence to support Russia claims that Syria chemical attack was fabricated.
• Russian Foreign Ministry Spokeswoman: At end of week three-way talks planned between foreign ministers of Russia, Syria, Iran- RIA.
• Ukraine President’s Office: US Sec. of State Tillerson assured Kiev that Washington will not allow any “package deal” over Ukraine & Syria.
• Saudi Arabia wants OPEC to extend productions cuts – WSJ citing sources.
• US Feb JOLTS job openings 5.743 mln (previous 5.625 mln) – Labor Department.
• ECB tells UK banks to apply as soon as possible for licenses.
• Bank of Italy’s Visco: Most bad loans are held by Italian banks that do not need to sell them immediately.
• Popolare Di Vicenza CEO: Believes banks have enough equity capital to absorb hit from planned NPL disposals but EU Commission has last word on matter.
• S. Africa’s constitutional court grants UDM party right to present case for secret ballot during no-confidence motion against Pres. Zuma – State TV
Looking Ahead - Economic Data (GMT)
• 23:50 Japan March Corp Goods Price m/m forecast +0.2% prior +0.6%
• 23:50 Japan March Corp Goods Price y/y forecast +1.3% prior -1.2%
• 23:50 Japan Feb Machinery Orders m/m forecast +2.7% prior -3.2%
• 23:50 Japan Feb Machinery Orders y/y no forecast prior -8.2%
• 01:30 China March PPI y/y forecast +7.6% prior +7.8&
• 01:30 China March CPI y/y forecast +1.0% prior +0.8%
• 01:30 China March CPI m/m forecast -0.3% prior -0.2%
• 00:30 Australia April Consumer Sentiment no forecast prior +0.1%
Looking Ahead - Events, Other Releases (GMT)
• No Significant Events
Currency Summaries
EUR/USD is likely to find support at 1.0561levels and currently trading at 1.0604 levels. The pair has made session high at 1.0631 and hit lows at 1.0598 levels. Euro inched higher against the dollar on Tuesday as fresh concerns about possible U.S. military action against Syria weighed on greenback. Global tensions escalated on Tuesday when Western countries were joined by Middle Eastern allies in a push to isolate Syrian President Bashar al-Assad following a chemical attack in the country last week. Trump ordered a missile strike on the war-torn country last week as a response to a poison gas attack that his administration blamed on government forces, pitting the United States against Russia, which backs Syrian President Bashar-al-Assad. The dollar index, which gauges the U.S. currency against a basket of six major peers, was off 0.30 percent on the day at 100.75. The euro which hit intraday high of $1.0626 in earlier in the day, was last trading at $1.0604. Trading volume has been muted due to the Passover and upcoming Easter holidays. U.S. financial markets will be closed on Friday in observance of the Good Friday holiday.
GBP/USD is supported in the range of 1.2415 levels and currently trading at 1.2491 levels. It reached session high at 1.2492 and dropped to session low at 1.2426 levels. Sterling surged against the dollar on Tuesday as the greenback fell across the board and upbeat UK inflation data boosted sterling. Data showed UK inflation remained steady in March, putting no further pressure on the Bank of England to move towards raising interest rates. Consumer prices increased by 2.3 percent annually last month, the Office for National Statistics said, in line with economists' forecasts. Inflation has accelerated in recent months, pushed up by a plunge of around 12 percent in the trade-weighted value of the pound since last summer's decision by voters to leave the European Union, and by a rise in oil prices that has fueled inflation in other countries too. The dollar index, which measures the greenback against a basket of currencies, was down 0.30 percent, while sterling rose to a five-day high of $1.2492, leaving it up half a percent.
USD/CAD is supported at 1.3305 levels and is trading at 1.3332 levels. It has made session high at 1.3356 and lows at 1.3311 levels. The Canadian dollar strengthened against its U.S. counterpart on Tuesday as oil prices rose and the dollar declined as geopolitical risks dampened the demand for the greenback. Prices of oil, one of Canada's major exports, rose on reports that Saudi Arabia has told Organization of the Petroleum Exporting Countries' officials it wants to continue output cuts for an additional six months. U.S. crude oil futures settled up 32 cents at $53.40 a barrel. The Bank of Canada is widely expected to hold rates at 0.50 percent when it releases its interest rate decision and Monetary Policy Report on Wednesday. Still, the strength of recent domestic data has pointed to a pickup in Canada's economy and economists expect the central bank could raise its first-quarter growth forecast. The Canadian dollar ended at C$1.3332 to the greenback, or 75.01 U.S. cents, unchanged from Monday's close.
AUD/USD is supported around 0.7455 levels and currently trading at 0.7495 levels. It hit session high at 0.7509 and made session lows at 0.7471 levels. The Australian dollar declined against the dollar on Tuesday as mounting geopolitical tensions drove investors out of riskier assets. The Australian dollar hit lows in the US session at $0.7476, But recovered some ground to trade at 07491.The Aussie has been on a downtrend since mid-March against a resurgent greenback, due in part to rising geopolitical tensions. A recent drop in the price of iron ore and coal, Australia's biggest export earners, hasn't helped, either. On the data front, National Australia Bank's monthly survey of more than 400 firms showed its index of business conditions climbed 6 points to +14 in March, well above the long-run average of +5. Later in the week, traders will watch out for Westpac's consumer sentiment on Wednesday and the Reserve Bank of Australia's (RBA) Financial Stability Report and February jobs data on Thursday. The RBA has highlighted softness in the labour market as a key area of concern and if the unemployment rate moves above 6 percent it would revive pressure for another rate cut. The central bank has left rates at a record low 1.50 percent after easing in August last year.
Equities Recap
A sharp drop in shares of Apple-supplier Dialog Semiconductor dominated trading in otherwise muted European stock markets on Tuesday as a shortened week and risk-off sentiment kept investors from making big bets.
UK's benchmark FTSE 100 closed up 0.3, the pan-European FTSEurofirst 300 ended the day down by 0.01 percent, Germany's Dax ended down by 0.5 percent, France’s CAC finished the day down by 0.01 percent.
U.S. stocks ended down but well off the day's lows on Tuesday, with worries over geopolitical risks dragging down sentiment as investors readied for the start of U.S. earnings.
Dow Jones closed down by 0.04 percent, S&P 500 ended down 0.15 percent, Nasdaq finished the day down by 0.24 percent.
Treasuries Recap
The U.S. government debt market rallied on Tuesday with the 30-year yield touching near three-month lows as fresh concerns about the French presidential election and possible U.S. military action against Syria and North Korea spurred safe-haven demand for Treasuries.
U.S. benchmark 10-year Treasury yields fell 6 basis points to 2.302 percent.
The 30-year bond yield was down over 5 basis points at 2.931 percent after touching 2.925 percent which was the lowest since Jan. 17.
Commodities Recap
Gold jumped nearly 2 percent to a fresh five-month high on Tuesday as investors sought assets seen as havens from risk amid mounting political and security concerns over North Korea, the Middle East and the looming French election.
Spot gold was up 1.53 percent at $1,273.44 per ounce by 3:10 p.m. EDT (1910 GMT), after hitting a fresh high since Nov. 10 at the session high of $1,275.16.U.S. gold futures ended the session 1.6 percent higher at $1,274.20.
Crude oil prices turned positive on Tuesday, reversing course on reports that Saudi Arabia has told OPEC officials it wants to continue output cuts for an additional six months.
Brent crude, the international benchmark for oil, settled up 25 cents at $56.23 a barrel, its highest since March 7.
U.S. West Texas Intermediate (WTI) rose 32 cents to $53.40 a barrel, surpassing a five-week high.
