Market Roundup
- Reports US special forces team in Okinawa, Japan, rumor possible action 4/27.
- Sources - Japan plans joint show of force with US carrier headed towards Korean peninsula, - Reuters.
- BoJ Gov Kuroda – FX determined by various factors, not just interest rate differentials, monetary policy aims for price stability, not targeting FX, concedes price outlook affected by FX but not based on forecast of currency moves, inflation target likely met more quickly on JPY weakness, will stick to current monetary policy – Reuters.
- BoJ reduces purchases of 3-5 year JGBs to Y350 bln from Y380 bln – Reuters.
- FinMin Aso – Investors should not lose faith in Japan’s markets simply on Toshiba woes, US-Japan dialogue can contribute to new trade rules – Reuters.
- Japan Feb core machinery orders +1.5% m/m, +5.6% y/y, +2.7% and +0.8% forecast, January -3.2% m/m, series highly volatile, CAPEX up in lieu of wage hikes?
- Japan March corporate goods prices +0.2% m/m, +1.4% y/y, +0.2%, +1.3% forecast, February +0.3%, +1.1%, leg-up from February, energy and JPY cited.
- Japan March bank loans +3.0% y/y to Y513.06 trln, Feb +2.8%, Jan +2.5%.
- Beijing orders property websites to stop touting investment gains, feng shui advice – Reuters.
- China March CPI -0.3% m/m, +0.9% y/y, -0.3%, +1.0% forecast, food CPI -4.4% y/y.
- China March PPI +0.3% m/m, +7.6% y/y, as forecast, wholesale prices cooling.
- Australia Apr Westpac/MI consumer confidence -0.7% to 99.0, +4.1% y/y still.
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Mar CPI, unch m/m, +2.3% y/y forecast; last -0.4%, +3.0%.
- (0300 ET/0700 GMT) Spain Mar HICP, +1.1% m/m, +2.1% y/y forecast; last -0.3%, flash +2.1%.
- (0430 ET/0830 GMT) Great Britain Mar claimant count, -3k forecast; last -11.3k.
- (0430 ET/0830 GMT) Great Britain Feb ILO unemployment, 4.7% forecast; last 4.7%.
- (0430 ET/0830 GMT) Great Britain Feb avge weekly earnings – 3-mo avge, +2.2% y/y forecast; last +2.2%.
- (0430 ET/0830 GMT) Great Britain Feb - ex-bonus, +2.1% y/y forecast; last +2.3%.
- (0830 ET/1230 GMT) United States Mar import/export prices, -0.2/+0.1% m/m forecast; last +0.2%, +0.3%.
- (1400 ET/1800 GMT) United States Mar Federal budget, $167 bln deficit forecast; last $192 bln deficit.
Key Events Ahead
- N/A Sweden TNS Sifo/Prospera inflation survey.
- N/A Austria E4.5 bln 2027 bond syndication via BAML, GS, HSBC, Nomura et al.
- (0500 ET/0900 GMT) IMF Lagarde speaks on global outlook and policy priorities in Brussels.
- (0500 ET/0900 GMT) Italy E4-4.5, 2-2.5 bln 0.35% and 1.85% 2020 and 2024 BTP auctions.
- (0500 ET/0900 GMT) Italy E0.5-1, 1.5-2 bln 3.5% and 2.25% 2030 and 2036 BTP auctions.
- (0500 ET/0900 GMT) Ireland E1-1.25 bln 3.9% and 1.0% 2023 and 2026 IGB auctions.
- (0500 ET/0900 GMT) Greece E625 mln 13-week treasury bill auction.
- (0530 ET/0930 GMT) Germany E3 bln 0.25% 2027 Bund auction.
- (0530 ET/0930 GMT) Portugal E1-1.25 bln 2.2% and 2.875% 2022 and 2025 PGB auctions.
- (0530 ET/0930 GMT) UK DMO GBP1.5 bln 2.5% 2065 Gilt auction.
- (0530 ET/0930 GMT) UK ChancExch Hammond, BoE Gov Carney speak at London FinTech conference.
- (1000 ET/1400 GMT) Dallas Fed Kaplan in Fort Worth moderated question-answer session.
- (1000 ET/1400 GMT) BoC policy announcement, no change in policy, 0.5% overnight rate forecast.
- (1115 ET/1515 GMT) BoC Gov Poloz, DepGov Wilkins press conference.
- (1615 ET/2015 GMT) BoC Gov Poloz, DepGov Wilkins Commons Finance Committee testimony.
FX Beat
DXY: The dollar fell to a five-month low against the yen as simmering geopolitical tensions put the safe-haven assets in favor. The dollar against a basket of currencies traded flat at 100.70, having hit a high of 100.34 on Monday, its highest since Mar. 15. FxWirePro's Hourly Dollar Strength Index stood at -24.87 (Neutral) by 0500 GMT.
EUR/USD: The euro edged down after rising in the previous two sessions as heightened geopolitical risks and increasing evidence of the unwinding of Trump trade drove the EUR/JPY cross lower. The European currency traded down at 1.0601, having touched a low of 1.0596 on Monday, its lowest since Mar. 9. FxWirePro's Hourly Euro Strength Index stood at -69.26 (Bearish) by 0400 GMT. Investors now await the U.S. import and export price index figures, as Eurozone's economic calendar remains absolutely data empty. Immediate resistance is located at 1.0641 (78.6% retrace of 1.0905 and 1.0570), a break above targets 1.0690. On the downside, support is seen at 1.0569 (Apr 10 Low), a break below could drag it lower1.0550.
USD/JPY: The dollar tumbled to a near 5-month low as fresh concerns about the French presidential election and possible U.S. military action against Syria and North Korea underpinned traditional safe-havens like the yen. The major traded 0.1 percent down at 109.46, hovering towards a low of 109.34 touched earlier in the day, its lowest since Nov. 17. FxWirePro's Hourly Yen Strength Index stood at 89.59 (Slightly Bullish) by 0400 GMT. Investors’ will continue to track geo-political developments, ahead of the U.S. import and export price index figures. Immediate resistance is located at 109.82 (78.6 % retrace of 111.57 and 109.34), a break above targets 110.19 (61.8% retrace). On the downside, support is seen at 109.34 (Session Low), a break below could take it near 109.00.
GBP/USD: Sterling consolidated below the 1.2500 handle amid concerns about U.S.-Russian tensions over Syria. Investors now await UK employment data and the Bank of England Governor Mark Carney scheduled speech for further insights on the economy’s strength and near-term interest rate outlook. Sterling trades 0.1 percent down at 1.2483, having touched a low of 1.2365 touched on Friday, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at 19.80 (Neutral) by 0400 GMT. Immediate resistance is located at 1.2500, a break above could take it near 1.2530/1.2555. On the downside, support is seen at 1.2460 (10-DMA), a break below targets 1.2434 (21-DMA). Against the euro, the pound traded 0.1 percent down at 84.94 pence, having hit a high of 84.85 earlier in the session.
AUD/USD: The Australian dollar declined below the 0.7500 handle as geopolitical unease, uncertainty over the French presidential election next month and downbeat Chinese consumer price index data favored safe-haven assets. The Chinese CPI fell at an annualized rate of 0.9 percent versus expected print of 1.0 percent, while the cost of living on monthly basis declined 0.3 percent. The Aussie trades 0.1 percent down at 0.7492, having hit a low of 0.7474 in the previous session, it’s lowest since Jan. 17. FxWirePro's Hourly Aussie Strength Index stood at -84.69 (Slightly Bearish) by 0500 GMT. Investors will continue to digest downbeat China's CPI data ahead of U.S. economic data. Immediate support is seen at 0.7474 (Previous Session Low), a break below targets 0.7450. On the upside, resistance is located at 0.7522 (23.6% retrace of 0.7679 and 0.7474), a break above could take it near 0.7552 (38.2% retrace).
NZD/USD: The New Zealand dollar eased as risk-off trades in response to rising geo-political concerns underpinned the bid tone around safe-haven assets. Moreover, worse-than-expected Chinese CPI and PPI figures also added to the weakness around the major. The Kiwi trades 0.2 percent lower at 0.6944, drifting towards a low of 0.6920 hit on Monday, its weakest since Mar. 15. FxWirePro's Hourly Kiwi Strength Index was at -37.60 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. macro fundamental drivers. Immediate resistance is located at 0.6980 (10-DMA), a break above could take it over 0.7000. On the downside, support is seen at 0.6920 (Apr 10 Low), a break below could drag it lower 0.6900.
Equities Recap
Asian shares declined as concerns about the French presidential election and possible U.S. military action against Syria and North Korea sent investors' towards traditional safe-havens.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei eased 1.3 percent to 18,508.00 points, Australia's S&P/ASX 200 index rose 0.02 percent to 5,930.70 points and South Korea's KOSPI gained 0.1 percent at 2,125.65 points.
Shanghai composite index edged down 0.22 percent to 3,281.61 points, while CSI300 index was trading 0.09 percent higher at 3,519.77 points.
Hong Kong’s Hang Seng was trading 0.12 percent lower at 24,059.19 points. Taiwan shares fell 0.2 percent to 9,817.68 points.
Commodities Recap
Crude oil prices rose to fresh 1-month high as Saudi Arabia was reported to be lobbying OPEC and other producers to extend a production cut beyond the first half of 2017. International benchmark Brent crude was trading 0.2 percent up at $56.40 per barrel by 0419 GMT, having hit an early high of $56.41, its strongest since Mar. 7. U.S. West Texas Intermediate crude gained 0.2 percent to $53.52 a barrel, after rising as high as $53.33 earlier, its highest since Mar. 7.
Gold rallied to a 5-month high after gaining nearly 2 percent in the previous session, as rising tensions over U.S. relations with Russia and North Korea boosted safe-haven assets. Spot gold edged up 0.1 percent to $1,275.10 per ounce by 0422 GMT, after hitting its strongest since Nov. 10 at 1,279.66 earlier. U.S. gold futures rose 0.2 percent to $1,277.20.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.290 percent lower by 0.024 bps, while 5-year yield was 0.005 bps down at 1.827 percent.
The Australian bonds gained, with yields on 10-year government bonds at their lowest since Nov.10. The three-year futures contract added 2 ticks to 98.21, while the 10-year contract rose 3.5 ticks to 97.475.
The New Zealand bonds jumped following firmness in the U.S. Treasuries as equities indices were dragged by weakness in the technology stocks. The yield on the benchmark 10-year bond slumped 1 basis point to 3.08 percent at the time of closing, the yield on 7-year note remained also plunged 3-1/2 basis points to 2.69 percent and the yield on short-term 2-year note also traded 1/2 basis point lower at 2.09 percent.
The Canadian government bond prices were higher across a flatter yield curve in sympathy with U.S. Treasuries. The two-year price rose 6 Canadian cents to yield 0.729 percent and the 10-year climbed 44 Canadian cents to yield 1.547 percent. On Friday, the 10-year yield hit a more than four-month low at 1.505 percent.
