Market Roundup
• U.S. Mar CPI MM, SA, -0.1%, 0.0% forecast, 0.2% previous.
• U.S. Mar CPI YY, NSA, 2.4%, 2.4% forecast, 2.2% previous.
• U.S. Mar Core CPI MM, SA, 0.2%, 0.2% forecast, 0.2% previous.
• U.S. Mar Core CPI YY, NSA, 2.1%, 2.1% forecast, 1.8% previous.
• U.S. Mar CPI Index, NSA, 249.554, 249.576 forecast, 248.991 previous.
• U.S. Mar Core CPI Index, SA, 256.20, 225.75 previous.
• U.S. Mar Cleveland Fed CPI, 0.3%, 0.2% previous.
• U.S. w/e MBA Mortgage Applications, -1.9%, -3.3% previous.
• U.S. w/e Mortgage Market Index, 380.6, 388.1 previous.
• U.S. w/e MBA 30-Yr Mortgage Rate, 4.66%, 4.69% previous.
• Federal Reserve policymakers all saw strengthening economy, inflation –minutes.
• Senior House Republican Ryan to quit in latest Washington upheaval.
• Ryan assured Trump won't fire special counsel, Senate eyes bill.
• China pledges to allow more foreign investment in financial sector by year-end.
• IMF chief optimistic on growth, but warns against trade protectionism.
• UK factory output falls for first time in almost a year.
Looking Ahead - Economic Data (GMT)
• 11 Apr 23:50 Japan w/e Foreign Bond Investment, -774.3 bln previous
• 11 Apr 23:50 Japan w/e Foreign Invest JP Stock, 228.8 bln previous
• 12 Apr 01:30 Australia Feb Housing Finance, -1.1% previous
• 12 Apr 01:30 Australia Feb Invest Housing Finance, 1.1% previous
Looking Ahead - Events, Other Releases (GMT)
• 12 Apr 07:30 Norges Bank‘s Oystein Olsen and Egil Matsen speak to Regional network, Region South-West in Staavenger
• 12 Apr 11:30 ECB publishes the accounts of policy meeting of Governing Council held on March 7,8 - Frankfurt
• 12 Apr 12:15 ECB’s Benoit Coeure participates in a panel discussion at a conference 'La France et l’Europe dans la mondialisation' in Paris
Currency Summaries
EUR/USD is likely to find support at 1.2301 levels and currently trading at 1.2359 levels. The pair has made session high at 1.2394 and hit lows at 1.2346 levels. Euro declined against the dollar on Wednesday as a tense standoff between the United States and Russia over Syria sent investors flocking into safe-haven debt markets. U.S. President Donald Trump warned Russia of imminent military action in Syria over a suspected poison gas attack, declaring that missiles "will be coming" and lambasting Moscow for standing by Syrian President Bashar al-Assad. Euro was further pressured after data showed U.S. consumer prices in March fell for the first time in 10 months, reinforcing expectations the Federal Reserve will raise interest rates at a gradual pace. U.S. consumer prices fell for the first time in 10 months in March, weighed down by a decline in the cost of gasoline, but underlying inflation continued to firm amid rising prices for healthcare and rental accommodation. The Labor Department said on Wednesday its Consumer Price Index slipped 0.1 percent last month, the first and largest drop since May 2017, after climbing 0.2 percent in February.Many of the world's stock markets fell back into the red after two days of gains, further boosting safety plays such as government bonds and the yen.
GBP/USD is supported in the range of 1.4109 levels and currently trading at 1.4174 levels. It reached session high at 1.4220 and dropped to session low at 1.4158 levels. Sterling strengthened against the dollar on Wednesday as sterling was boosted on expectations that the Bank of England will raise interest rates in May. Growing expectations of an interest rate increase next month and a recent agreement on a transition deal for when Britain quits the EU next year, coupled with dollar and euro weakness have prompted investors to load up on the British currency in recent weeks. Sterling also rose above $1.42 on Wednesday, despite disappointing manufacturing output data, leaving it not far from the $1.4346 post Brexit-vote peak against the dollar it hit in January. British manufacturing output fell unexpectedly in February, its first drop in almost a year, according to official figures that added to signs that the economy may have slowed in the first quarter. Wednesday’s data also showed another sharp drop in construction output, against expectations of a small rebound after a severe downturn in January. The pound rose above 1.4200 but it later gave up some ground, it was last trading at $1.4174 by 1930 GMT. However, with bets on sterling at their most bullish in years and forecasters predicting more gains, the lacklustre data will encourage some investors to take profits after the recent rally.
USD/CAD is supported at 1.2525 levels and is trading at 1.2571 levels. It has made session high at 1.2622 and lows at 1.2540 levels. The Canadian dollar firmed against its U.S. counterpart on Wednesday as fears of possible Western military action against Syria and tensions between Russia and the United States reduced demand for risk appetite. U.S. President Donald Trump declared on Wednesday that missiles "will be coming," as he lambasted Russia for standing by Syrian President Bashar al-Assad following a suspected gas attack that killed more than 40 people and affected hundreds of others. He was reacting to a warning from Assad's main ally Russia on Tuesday that any U.S. missiles fired at Syria over the deadly assault on a rebel enclave would be shot down and the launch sites targeted. On Tuesday, the loonie touched its strongest since Feb. 20 at C$1.2588, bolstered by easing investor concerns about an escalating U.S.-China trade row. Global stocks fell but the price of oil, one of Canada's major exports, rose to its highest in more than three years.The currency has also benefited recently from an upbeat business survey from the Bank of Canada, stronger-than-expected domestic jobs data and investor optimism over a deal to revamp the North American Free Trade Agreement. The Canadian dollar was last trading 0.2 percent higher at C$1.2571 to the greenback. The currency's strongest level of the session was C$1.2538, while its weakest was C$1.2623.
USD/JPY is supported around 106.48 levels and currently trading at 106.85 levels. It peaked to hit session high at 107.06 and made session lows at 106.63 levels. The Dollar weakened against the Japanese yen on Wednesday, as uncertainty over possible Western military action against Syria fed risk aversion even as fears of a trade war between the United States and China faded. U.S. President Donald Trump warned Russia on Wednesday of imminent military action in Syria over a suspected poison gas attack, declaring that missiles "will be coming" and lambasting Moscow for standing by Syrian President Bashar al-Assad. When geopolitics roils financial markets, the yen tends to rise on the view that investors from Japan, the world's biggest creditor nation, will repatriate funds during a crisis. Syria concerns overshadowed easing U.S.-China trade tensions a day after Beijing promised to open its economy and lower import tariffs on products such as cars. The dollar index, which measures the greenback against a basket of six major currencies, fell to a two-week low of 89.355. But it rebounded after minutes of the U.S. Federal Reserve's last policy meeting showed policymakers felt that the U.S. economy would firm further and that inflation would rise in the coming months. The index was last trading down 0.04 percent at 89.547.
Equities Recap
European shares fell on Wednesday in a broad-based pullback as rising tensions over Syria added to market worries, although solid results from Tesco and strength among telecoms stocks were a bright spot.
UK's benchmark FTSE 100 closed down by 1.66 percent, the pan-European FTSEurofirst 300 ended the day down by 0.61 percent, Germany's Dax ended down by 0.8 percent, France’s CAC finished the day down by 0.6 percent.
U.S. stocks added to losses on Wednesday after the release of minutes from the Federal Open Market Committee showed some concern that rising inflation might require a faster pace of interest rate hikes than anticipated.
Dow Jones closed down by 0.90 percent, S&P 500 ended down by 0.55 percent, Nasdaq finished the day down by 0.36 percent.
Treasuries Recap
U.S. Treasury yields declined on Wednesday on escalating geopolitical tensions after President Donald Trump warned Russia of imminent military action in Syria over a suspected poison gas attack.
The U.S. 10-year yields were down at 2.7826 percent, from 2.797 percent late on Tuesday. U.S. 30-year yields sank to 2.995 percent, from Tuesday's 3.017 percent.
On the front end of the curve, U.S. 2-year yields dipped to 2.311 percent , compared with 2.315 percent on Tuesday.
Commodities Recap
Gold prices retreated from session highs on Wednesday but remained positive after the U.S. Federal Reserve confirmed policymakers' sentiment of a stronger U.S. economy, denting safe haven appeal.
Spot gold gained 0.8 percent at $1,349.91 per ounce by 2:38 p.m. EDT (1838 GMT), while June U.S. gold futures settled up $14.10, 1.1 percent, at $1,360.
Oil prices jumped on Wednesday, hitting their highest in more than three years on Wednesday after Saudi Arabia said it intercepted missiles over Riyadh and U.S. President Donald Trump warned Russia of imminent military action in Syria.
Brent rose $1.02 on the day to settle at $72.06 a barrel, having touched a session high of $73.09. U.S. crude futures rose $1.31 to settle at $66.82 a barrel, a 2 percent gain, having traded as high as $67.45.
