Market Roundup
- Japan Mar Machinery Orders MM, -3.9%, f'cast -3.0%, last 2.1%
- Japan Mar Machinery Orders YY, -2.4%, f'cast 0.3%, last 2.4%
- Japan Q1 core orders +3.3% q/q, Q2 eyed at +7.1%, CAPEX recovery intact
- Trump says 'We'll see' on N.Korea summit, to insist on denuclearization
- U.S., China to launch trade talks; China hawk Navarro's role reduced –officials
- Japan plans retaliatory tariffs against United States - NHK
- Australia Apr Employment, 22.6k, f'cast 20.0k, last 4.9k, rvsd -0.7k
- Australia Apr Unemployment Rate, 5.6%, f'cast 5.5%, last 5.5%
- New Zealand unveils budget spending boost in quest to spread prosperity
- HKMA intervenes as Hong Kong dollar weakens, buys HK$9.5 bln in US trade
- Malaysia to introduce sales and service tax after effectively scrapping GST
- Brazil surprisingly holds interest rates unchanged
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Mar Trade Balance EU, last 1.130 bln
- (0400 ET/0800 GMT) Italy Mar Eurostat Trade NSA, Eur, last 18.9 bln
Key Events Ahead
- (0630 ET/1030 GMT) ECB's Constancio speaks at the Colloquium in his honour organised by the ECB in Frankfurt
- (0800 ET/1200 GMT) ECB's Constancio delivers the opening address at the third annual ECB macroprudential policy and research conference
- (1000 ET/1400 GMT) Fed's Hirtle speaks at Economic Press Briefing on Homeownership and Housing Wealth, London
- (1045 ET/1445 GMT) Fed's Kashkari speaks in ST. Paul, Minnesota
- (1330 ET/1730 GMT) Fed's Kaplan speaks before the Richardson Chamber of Commerce Annual Meeting
FX Beat
DXY: The dollar index consolidated near 5-month peaks as the U.S. 10-year Treasury yields rose to their highest levels in nearly seven years. The greenback against a basket of currencies trades 0.1 percent down at 93.23, having touched a high of 93.63 on Wednesday, its highest since Dec. 19. FxWirePro's Hourly Dollar Strength Index stood at 46.35 (Neutral) by 0500 GMT.
EUR/USD: The euro rebounded after falling to a 5-month low in the previous session on the back of political uncertainty in Italy. Moreover, news that Italy's anti-establishment 5-Star Movement and anti-immigrant League may request the European Central Bank to drop 250 billion euros of debt as the parties worked to draft a coalition programme undermined the euro. The European currency traded 0.1 percent up at 1.1824, having touched a low of 1.1763 the day before, its lowest since Dec. 18. FxWirePro's Hourly Euro Strength Index stood at -94.08 (Slightly Bearish) by 0400 GMT. Investors’ attention will remain on series of economic data from the Eurozone economies and ECB Vice President Vitor Constancio speech, ahead of the U.S. unemployment benefit claims and Fed officials' speeches. Immediate resistance is located at 1.1885 (5-DMA), a break above targets 1.1978 (May 7 High). On the downside, support is seen at 1.1763 (Previous Session Low), a break below could drag it till 1.1736 (Dec. 18 Low).
USD/JPY: The dollar eased from recent peaks as renewed tensions in the Korean peninsula and U.S.-China trade concerns supported the bid tone around the safe-haven Japanese Yen. Moreover, risk-off sentiment in the Asian equity markets pushed the major lower. The pair was trading 0.1 percent down at 110.26, having hit a high of 110.45 on Tuesday, its highest since Feb. 2. FxWirePro's Hourly Yen Strength Index stood at -64.68 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims and Fed officials' speeches. Immediate resistance is located at 110.48 (Feb. 2 High), a break above targets 110.98 (Jan. 16 High). On the downside, support is seen at 109.82 (5-DMA), a break below could take it lower 108.53 (10-DMA).
GBP/USD: Sterling rose from recent lows, amid fresh worries about Britain's Brexit negotiations. Moreover, fading expectations of Bank of England interest rate hikes limited the upside in the major. The major traded 0.5 percent up at 1.3547, having hit a low of 1.3451 on Tuesday, it’s lowest since Dec. 29. FxWirePro's Hourly Sterling Strength Index stood at 51.03 (Bullish) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3608, a break above could take it near 1.3665. On the downside, support is seen at 1.3428, a break below targets 1.3405. Against the euro, the pound was trading 0.3 percent up at 87.29 pence, having hit a high of 87.16 pence earlier, it’s highest since Apr. 27.
AUD/USD: The Australian dollar rose to a 3-day high as domestic participation rate advanced to 65.6 percent in April, near levels seen in early 2011. The economy's jobless rate rose to a 9-month high of 5.6 percent in April as more people searched for work, raising doubts about the labour market. The Aussie trades 0.3 percent up at 0.7533, having hit a high of 0.7566 on Friday; it’s highest since Apr. 30. FxWirePro's Hourly Aussie Strength Index stood at 52.45 (Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7433 (May 8 Low), a break below targets 0.7412 (May 9 Low). On the upside, resistance is located at 0.7565 (May 16 High), a break above could take it near 0.7606 (Apr. 25 High).
NZD/USD: The New Zealand dollar gained after the country's Labour-led government predicted a larger surplus for the year ending June. The economy's budget estimate an operating surplus of NZ$3.14 billion for the current financial year, up from NZ$2.54 billion previously forecast. The Kiwi trades 0.1 percent up at 0.6904, having touched a low of 0.6851 on Wednesday, its lowest level since Dec. 11. FxWirePro's Hourly Kiwi Strength Index was at -130.50 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6974, a break above could take it near 0.7030. On the downside, support is seen at 0.6835, a break below could drag it below 0.6805.
Equities Recap
Asian shares consolidated within narrow ranges, while the euro hovered near 5-month lows on concerns the political developments in Italy could cause wider disruptions in the Eurozone.
MSCI's broadest index of Asia-Pacific shares outside Japan traded flat.
Tokyo's Nikkei rose 0.7 percent to 22,880.91 points, Australia's S&P/ASX 200 index eased 0.4 percent to 6,084.50 points and South Korea's KOSPI plunged 0.2 percent to 2,455.46 points.
Shanghai composite index fell 0.5 percent to 3,154.85 points, while CSI300 index was trading 0.7 percent down at 3,866.11 points.
Hong Kong’s Hang Seng was trading 0.3 percent lower at 31,005.80 points. Taiwan shares shed 0.6 percent to 10,833.81 points.
Commodities Recap
Crude oil prices rallied to its highest level seen since November 2014, as supplies tightened while demand remained strong. International benchmark Brent crude was trading 0.1 percent up at $79.39 per barrel by 0411 GMT, having hit a high of $79.43 earlier, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.3 percent up at $71.71 a barrel, after rising as high as $71.89 on Tuesday, its highest since Nov. 2014.
Gold prices edged up after touching their lowest level this year in the previous session, amid geopolitical uncertainty and a slightly weaker U.S. dollar. Spot gold rose 0.1 percent to $1,292.54 per ounce by 0414 GMT, having hit a low of $1,286.28 on Thursday, its lowest price level since Dec. 27. U.S. gold futures for June delivery were 0.1-percent higher at $1,292.80 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 3.111 percent higher by 0.016 bps, while 5-year yield was 0.016 bps up at 2.949 percent.
The Japanese government bonds remained flat during late Asian session amid a muted trading session that witnessed data of little economic significance, except for the country’s national core consumer price inflation (CPI) data, scheduled to be released today by 23:30GMT. The yield on the benchmark 10-year JGB note, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note remained 1 basis point higher at 0.76 percent and the yield on short-term 1-year traded flat at -0.13 percent.
The Australian government bonds edged slightly lower after employment index for the month of April hits the highest level since the polling began in March 1997, pushing the benchmark 10-year bond yield to a 3-month high. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 1-1/2 basis points to 2.904 percent (3-month high), the yield on the long-term 30-year Note jumped 1 basis point to 3.380 percent and the yield on short-term 2-year up 1/2 basis point to 2.070 percent.
