Market Roundup
• US April NAHB Housing Market Index 68 (f/c 70) versus 71 in March.
• US economy is seen growing at 0.5% in Q1 vs. +0.6% estimate April 7- Atlanta Fed’s GDPNow Model.
• NY Fed’s Empire State Current Business Conditions Index +5.2 in April (forecast +15.0) vs. +16.4 in March.
• NY Fed says Empire State employment index at highest in “just over two years”.
• Pence, Aso not expected to discuss trade irritants in detail on Tuesday- White House Adviser.
• White House expects ‘handful’ of investment announcements while Pence is in Sydney this weekend- Adviser.
• Council of Europe Observer Mission: Turkish referendum took place on uneven playing field.
• Brazil’s Temer: Country may need another pension reform in10 or 15 years; There will be a political reform, inevitably.
• Brazil’s Temer: Oderbrecht testimonies send very bad image about Brazil but Gov’t must not stop; Some cabinet ministers may want to leave government after Oderbrecht testimonies.
• Russia’s Putin: Needs extra measures to boost investment given rouble appreciation.
Looking Ahead - Economic Data (GMT)
• 01:30 China March House Prices y/y no forecast prior 11.8%
• 03:00 New Zealand March RBNZ Offshore Holdings no forecast prior 60.0%
Looking Ahead - Events, Other Releases (GMT)
• No major events scheduled
Currency Summaries
EUR/USD is likely to find support at 1.0586 levels and currently trading at 1.0639 levels. The pair has made session high at 1.0669 and hit lows at 1.0633 levels. The US dollar eased against euro on Monday as rising geopolitical tensions in North Korea hurt risk appetite. North Korea on Sunday made what was believed to be a failed missile test launch, increasing geopolitical risks. Regional tensions have risen over the past weeks as U.S. President Donald Trump has taken a tough rhetorical line with Pyongyang. Already bruised by worries over North Korea, investor sentiment on dollar took a further hit on weak U.S. economic data. U.S. retail sales fell for the second straight month in March and consumer prices dropped for the first time in just over a year, a report from the Commerce Department showed on Friday. Weak U.S. retail sales and consumer price data on Friday also put a dent in expectations that growth will be sufficient for the Fed to raise interest rates two more times this year. Traders have been reducing expectations of tax reform in the near-term as the Trump administration focuses on foreign affairs. Tax reform and the fiscal stimulus had been expected to help bolster U.S. growth.
GBP/USD is supported in the range of 1.2500 levels and currently trading at 1.2562 levels. It reached session high at 1.2595 and dropped to session low at 1.2551 levels. Sterling rose against the dollar on Monday as pound was boosted by weaker dollar and jitters ahead of French elections in about one week's time. The downside for the U.S. dollar came from President Donald Trump's verbal intervention on Thursday, when he told the Wall Street Journal the dollar was "getting too strong" and that he would prefer the Federal Reserve to keep interest rates low and was further dented on Friday after weak US economic data. Meanwhile, centrist Emmanuel Macron and far-right leader Marine Le Pen are still frontrunners in the French race, but Melenchon, who for most of the campaign has been dismissed as a distant no-hoper, has surged into the top four and lies just a few percentage points behind the leaders. A four-way contest in the election could heighten uncertainty over its result for investors who have grown wary of polls. Sterling gained for the fifth successive day versus the dollar on Monday but lost momentum as the greenback recovered slightly in the late US session. It last was trading at $1.2559.
USD/CAD is supported at 1.3260 levels and is trading at 1.3312 levels. It has made session high at 1.3316 and lows at 1.3260 levels. The Canadian dollar strengthened against a broadly weaker U.S. currency on Monday as oil prices held near recent highs and investors returned from a long weekend to strong Chinese growth data and softer U.S. numbers. China's economy expanded faster than expected in the first quarter as higher government infrastructure spending and a property boom helped boost industrial output by the most in more than two years. Demand for industrial metals and other materials in China can support the commodity-linked Canadian currency. Crude oil prices slipped following three straight weeks of gains, but the strong economic growth in China and a weaker dollar limited losses. Geopolitical tensions remained in focus, with U.S. Vice President Mike Pence warning North Korea not to test President Donald Trump's resolve. The Canadian dollar was last trading at C$1.3314 to the greenback, or 75.30 U.S. cents, stronger than Thursday's close of C$1.3328, or 75.05 U.S. cents.
USD/JPY is supported around 108.00 levels and currently trading at 108.95 levels. It made session high at 109.04 and made session lows at 108.30 levels. The dollar inched higher against Japanese yen on Monday from five-month lows as U.S. Treasury yields turned higher and the dollar came off its lows after rising geopolitical tensions over North Korea spurred earlier safe-haven buying. The U.S. dollar hit session low at 108.29 yen on geopolitical concerns, its lowest since mid-November but recovered sharply to trade at 108.95 yen. Tensions on the Korean peninsula have escalated as U.S. President Donald Trump takes a hard rhetorical line with North Korean leader Kim Jong Un, who has rebuffed admonitions from China and proceeded with missile tests. U.S. Vice President Mike Pence put North Korea on notice on Monday, warning that recent U.S. strikes in Syria and Afghanistan showed that the resolve of President Donald Trump should not be tested.
Equities Recap
U.S. stocks bounced back on Monday after the S&P 500 closed the previous session at a two-month low, in a broad rally led by recently beaten-down bank and technology shares.
Dow Jones closed up by 0.91 percent, S&P 500 ended up 0.86 percent, Nasdaq finished the day up by 0.88 percent.
Treasuries Recap
U.S. Treasury yields rose from five-month lows on Monday as stocks gained, reducing demand for safe-haven debt, and on reports that the Trump administration is likely to nominate a bank friendly official as the Federal Reserve's vice chairman for bank supervision.
Benchmark 10-year notes were last down 7/32 in price to yield 2.252 percent, after dropping to 2.198 percent overnight, the lowest since Nov. 17.
Commodities Recap
Gold pared gains from a five-month high on Monday, losing steam as U.S. Treasury yields turned higher and the dollar came off its lows after rising geopolitical tensions over North Korea spurred earlier safe-haven buying in bullion.
Spot gold was up 0.05 percent at $1,285.86 an ounce by 2:43 p.m. EDT (1843 GMT), after hitting its highest since early November at $1,295.42.The most-active U.S. gold futures for June delivery settled up 0.3 percent at $1,291.90.
Crude oil prices slipped 1 percent on Monday in subdued trading after a long Easter holiday weekend, on news of rising U.S. shale production and profit-taking following three straight weeks of gains.
Benchmark Brent crude futures ended the session 53 cents lower at $55.36 while U.S. West Texas Intermediate (WTI) crude futures settled down 53 cents at $52.65 a barrel.
