Market Roundup
• Fed still 'patient' on rates, debating balance sheet policy
• ECB's Draghi whets investor appetite for more action
• Dovish ECB drags down euro zone bond yields, euro
• EU wrangles over new Brexit delay sought by May
• U.S., China agree to establish trade deal enforcement offices -Mnuchin
• Germany's Scholz: Must avoid escalation in EU-U.S. trade dispute
• US Mar CPI MM SA, 0.4%, 0.3% forecast, 0.2% previous
• US Mar CPI YY NSA, 1.9%, 1.8% forecast, 1.5% previous
• US Mar Core CPI MM SA, 0.1%, 0.2% forecast, 0.1% previous
• US Mar Core CPI YY NSA, 2.0%, 2.1% forecast, 2.1% previous
• CA Apr TR IPSOS PCSI, 50.76, 55.08 previous
Looking Ahead - Economic Data (GMT)
• 10 Apr 22:45 New Zealand Mar Food Price Index, 0.4% forecast
• 10 Apr 23:50 Japan 6 Apr w/e, Foreign Bond Investment, 1,243.5 bln forecast
• 11 Apr 01:30 China Mar PPI YY, 0.4% forecast, 0.1% forecast
• 11 Apr 01:30 China Mar CPI YY, 2.4% forecast, 1.5% forecast
• 11 Apr 01:30 China Mar CPI MM, -0.2% forecast, 1.0% forecast
Looking Ahead - Events, Other Releases (GMT)
• 12:45 World Bank Interim President Kristalina Georgieva holds a press briefing ahead of IMF-World Bank Spring Meetings in Washington D.C.
• 13:30 Fed's Clarida speaks on the U.S. economic outlook and monetary policy before the Institute of International Finance Washington Policy Summit in Washington D.C.
• 13:40 Fed's St. Louis President James Bullard gives presentation on the U.S. economy and monetary policy in Tupelo, Miss, United States.
• 17:00 Bank of Canada Senior Deputy Governor Carolyn Wilkins will participate in a panel discussion at the World Bank in Washington D.C.
• 18:00 Federal Reserve Bank of Minneapolis President Neel Kashkari holds a Q&A via Twitter in Minneapolis, Minn
Currency Summaries
EUR/USD: The euro was little changed against the U.S. dollar on Wednesday, as the Federal Reserve and the European Central Bank hinted they are willing to leave interest rates alone amid signs of flagging growth and risk from trade tensions. The Fed on Wednesday released the minutes on its March 19-20 meeting at which policy-makers signaled they would not raise rates in 2019 and they would stop shrinkage of its bond holdings by September. President Mario Draghi underscored the risks facing the euro zone economy, reinforcing bets on possible further stimulus to prevent the region from slipping into recession. In late U.S. trading, the euro was up 0.09% at $1.1272 but was 0.09% lower at 125.085 yen. Immediate resistance can be seen at 1.1310 (50 DMA), an upside break can trigger rise towards 1.1348 (100 DMA).On the downside, immediate support is seen at 1.1248 (38.2% retracement level), a break below could take the pair towards 1.1200 (Psychological level).
GBP/USD: Sterling strengthened against dollar on Wednesday, as investors prepared for the European Union to grant Britain a second Brexit delay that, while reducing the threat of a 'no-deal' exit, creates new uncertainties. Brussels is expected to grant Prime Minister Theresa May another delay at an emergency summit on Wednesday but the bloc's leaders are likely to demand she accepts a longer extension than she proposed, and with conditions. Sterling rose 0.3 percent to hit the day's high of $1.3130, before settling around $1.3100. Immediate resistance can be seen at 1.3150 (21 DMA), an upside break can trigger rise towards 1.3194 (38.2 % retracement level).On the downside, immediate support is seen at 1.3100 (Psychological level), a break below could take the pair towards 1.2934 (50 DMA).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Wednesday, as oil prices rose, while greenback dipped after Fed give dovish signal. Fed minutes of the Fed's March 19-20 meeting showed policy makers saw the U.S. economy weathering a global slowdown, with no recession for the United States in the next few years.Oil prices rallied more than 1 percent after U.S. data showing a deep drawdown in gasoline stocks overshadowed crude inventories rising to 17-month highs, and as sanctions and blackouts in Venezuela helped tighten global supplies. The Canadian dollar was 0.04 percent higher at 1.3322 to the greenback. Immediate resistance can be seen at 1.3351 (21 DMA), an upside break can trigger rise towards 1.3424 (Higher Bollinger Bands).On the downside, immediate support is seen at 1.3291 (50 DMA), a break below could take the pair towards 1.3272 (Lower Bollinger Band).
USD/JPY: The U.S. dollar fell against the Japanese yen on Wednesday, as safe haven demand increased as caution prevailed due to fresh U.S.-Europe trade tensions and the International Monetary Fund's downgrade of its global economic outlook. U.S. consumer prices increased by the most in more than a year in March, but underlying inflation remained benign against the backdrop of slowing domestic and global economic growth.The dollar was 0.11 percent lower versus the Japanese yen at 110.99. Strong resistance can be seen at 111.30 (9 DMA), an upside break can trigger rise towards 114.54 (Oct 3rd high).On the downside, immediate support is seen at 110.80 (Ichimoku Cloud Top), a break below could take the pair towards 109.85 (Lower Bollinger Band).
Equities Recap
European shares rose slightly on Wednesday as gains across most sectors offset losses among lenders, which were hit by a lack of detail in European Central Bank (ECB) comments after the bank left borrowing costs unchanged.
UK's benchmark FTSE 100 closed down by 0.03 percent, the pan-European FTSEurofirst 300 ended the day up by 0.22 percent, Germany's Dax ended up by 0.51 percent, France’s CAC finished the day up by 0.26 percent.
Tech stocks led Wall Street slightly higher on Wednesday, with investors largely shrugging off benign U.S. inflation data and unsurprising minutes from the Federal Reserve's March meeting.
Dow Jones closed up by 0.03 percent, S&P 500 ended up by 0.36 percent, Nasdaq finished the down up by 0.70 percent.
Treasuries Recap
U.S. Treasury yields slid on Wednesday, as tame underlying U.S. inflation data reinforced expectations that the Federal Reserve would hold interest rates steady or cut them once by the end of the year.
In afternoon trading, U.S. 10-year note yields fell to 2.472%, down from 2.499% late on TuesdayU.S. 30-year bond yields also dipped to 2.898% from 2.909% on Tuesday.
Commodities Recap
Gold rose on Wednesday, lifted to their highest in almost two weeks as investors fretted about the global economy and trade tensions, and as the European Central Bank and the U.S. Federal Reserve showed signs that monetary policy will remain accommodative.
Spot gold was up 0.4 percent at $1,308.47 an ounce at 3:42 p.m EDT (1942 GMT). Prices hit their highest since March 28 at $1,310.50 during the session. U.S. gold futures settled 0.4 percent higher at $1,313.90.
Oil futures climbed more than 1 percent on Wednesday after U.S. data showing a deep decline in gasoline stocks overrode a rise in crude inventories to 17-month highs, and as an OPEC report showed further tightening of Venezuela's crude supply.
International benchmark Brent futures settled at $71.73 a barrel, gaining $1.12, or 1.59 percent, after hitting a five-month high of $71.78 a barrel. U.S. West Texas Intermediate (WTI) crude oil futures settled at $64.61 a barrel, rising 63 cents, or 0.98 percent, holding just below its strongest level since mid-November.
