Market Roundup
- Trump – USD getting too strong, will not label China a currency manipulator, likes low interest rate policy, likes and respects FOMC Chair Yellen, Ex-Im Bank “good thing” – Wall Street Journal.
- TsySec Mnuchin – Very close to nominating FOMC ViceChair, another seat – WSJ.
- Sen Schumer (Dem) – Decision not to name China ccy manipulator shows lack of real, tough action on trade with China – Wall Street Journal.
- Foreign journalists in NoKorea gather for “big event” amid tensions –Reuters.
- South Korea says believes Washington will consult before striking North Korea.
- US wants trade to dominate economic talks with Japan – Asahi.
- Japan’s Abe - NoKorea may have the ability to put Sarin on missiles – FT.
- Japan March money supply M2 +4.3% y/y, M3 +3.6%, broadest liquidity +2.6%, February +4.2%, +3.6%, +2.6%.
- MoF flow data week-ended April 8 – Japanese buy net Y82.9 bln foreign stocks, sell Y2.1768 trln bonds, buy Y119.1 bln bills; foreign investors buy net Y441.0 bln Japanese stocks, Y586.8 bln JGBs, Y1.9303 trln bills.
- World Bank maintains ’17 East Asia growth view, ’17 +6.2%, ’18 +6.1%, China +6.5%, +6.3%, central bank policy risks, good reasons for USD rise despite Trump talk – Reuters, MNI.
- ADB forecasts slowest Asia growth since ’01, ’17 and ’18 +5.7% - Nikkei.
- PBOC – China should strengthen CNY’s int’l role – Shanghai Securities News.
- China March trade surplus $23.93 bln, exports +16.4% y/y, imports +20.3%, $10 bln, +3.2% and +18.0% forecast, surplus with US $17.74 bln, Q1 $49.6 bln.
- China March crude oil imports at record high 9.24 mln bpd, Q1 +15% y/y.
- China NDRC – Growth-employment stable in Q1, PPI to slow – Reuters.
- BoC Gov Poloz – Would be wrong to offset market factors that drive CAD, no simple case for benefits of low or high CAD, economy not yet firing on all cylinders – Reuters.
- RBA FSR – Warns of housing debt, risks of excessive borrowing – Reuters.
- Australia March employment +60.9k, unemployment 5.9%, participation 64.8%, +20k, 5.9% and 64.6% forecast, full-time employment +74.5k.
- Australia April MI inflation expectations +2.5% weighted mean, +4.1% trimmed mean, March +2.5%, +4.0%.
- New Zealand March BNZ/BNZ mfg PMI 57.8, +2.1 points on month, best in more than year.
- New Zealand March REINZ median house prices +1.7% m/m, +10.3% y/y.
- New Zealand March food price index -0.3% m/m, +1.3% y/y.
- UK March RICS house price balance +22, as forecast, Feb rev +22, +22 lowest since September ’16, London -49, lowest since ’09.
Economic Data Ahead
- (0315 ET/0715 GMT) Switzerland Mar producer/import prices, +0.1% m/m forecast; last -0.2% m/m, +1.3% y/y.
- (0400 ET/0800 GMT) Italy Mar HICP – final, +1.3% y/y forecast; flash +1.3%.
- (0830 ET/1230 GMT) United States w/e initial jobless claims, 245k forecast; last 234k.
- (0830 ET/1230 GMT) United States Mar PPI - final demand, unch m/m, +2.4% y/y forecast; last +0.3%, +2.2%.
- (0830 ET/1230 GMT) United States Mar – ex-food/energy, +0.2% m/m, +1.8% y/y forecast; last +0.3%, +1.5%.
- (1000 ET/1400 GMT) United States Apr U.Mich sentiment index – prelim, 96.5 forecast; last 96.9.
Key Events Ahead
- SIFMA recommends early US bond market close ahead of Good Friday holiday.
- (0600 ET/1000 GMT) UK DMO GBP0.5/0.5/1.0 bln 1/3/6-month treasury bill auctions.
- (1030 ET/1430 GMT) BoC Gov Poloz, DepGov Wilkins Senate committee testimony.
- (1615 ET/2015 GMT) BoC Gov Poloz, DepGov Wilkins House of Commons committee testimony.
FX Beat
DXY: The dollar slumped to multi-week lows versus its major peers after U.S. President Donald Trump said that the dollar was getting too strong and that he would prefer the Federal Reserve to keep interest rates low. The dollar against a basket of currencies traded 0.1 percent lower at 100.08, having hit a low of 100.01 earlier, its lowest since Mar. 30. FxWirePro's Hourly Dollar Strength Index stood at -72.12 (Bearish) by 0500 GMT.
EUR/USD: The euro rallied, extending gains for the fourth consecutive session after President Donald Trump stated the dollar was getting too strong, making it difficult to compete with other economies who devalue their currencies. The European currency traded up at 1.0671, having touched a high of 1.0677 earlier, its highest since Apr. 6. FxWirePro's Hourly Euro Strength Index stood at -16.35 (Neutral) by 0500 GMT. Investors now await series of data from the Eurozone economies, ahead of the U.S. producer price index and unemployment claims figures. Immediate resistance is located at 1.0697 (61.8% retrace of 1.0905 and 1.0570), a break above targets 1.0716 (21-DMA). On the downside, support is seen at 1.0650, a break below could drag it near1.0619.
USD/JPY: The dollar fell to a fresh 5-month low after U.S. President Donald Trump said that the currency was too strong and he favored low interest rates. Moreover, worries about the French presidential election and heightened geopolitical tensions continued to underpin Japanese yen's safe-haven appeal. The major traded 0.05 percent down at 108.92, having touched a low of 108.72 earlier in the day, its lowest since Nov. 17. FxWirePro's Hourly Yen Strength Index stood at 61.21 (Bullish) by 0500 GMT. Investors’ will continue to digest President Trump's comments, ahead of the U.S. producer price index and unemployment claims figures. Immediate resistance is located at 109.33 (78.6 % retrace of 111.57 and 108.72), a break above targets 109.81 (61.8% retrace). On the downside, support is seen at 108.72 (Session Low), a break below could take it near 108.50.
GBP/USD: Sterling rallied towards the 1.2600 handle as the U.S. President Trump's comments sent the treasury yields tumbling, with the benchmark 10 year down to fresh five-month lows. Moreover, strong results revealed by the British Chambers of Commerce (BCC) business survey also boosted the British pound's demand. Sterling trades 0.1 percent up at 1.2559, hovering towards an early high of 1.2573, its highest since Mar. 28. FxWirePro's Hourly Sterling Strength Index stood at 64.44 (Bullish) by 0500 GMT. Investors’ attention will remain on the BoE credit conditions survey and the U.S. macro fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.2600, a break above could take it near 1.2638. On the downside, support is seen at 1.2524 (23.6% retrace of 1.2365 and 1.2573), a break below targets 1.2500. Against the euro, the pound traded 0.1 percent up at 84.95 pence, having hit a 6-week high of 84.77 in the previous session.
AUD/USD: The Australian dollar rose to a 1-week high on the back of Australia's upbeat readings on employment and after the Chinese data showed a sharp rise in the March Trade surplus. The economy's employment rose by a seasonally adjusted 60,900 in March, beating expectations for a gain of 20,000, while the unemployment rate stood at 5.9 percent, as expected. The Aussie trades 0.8 percent higher at 0.7585, having hit a peak of 0.7586 earlier in the session, it’s highest since Apr. 5. FxWirePro's Hourly Aussie Strength Index stood at 68.79 (Bullish) by 0500 GMT. Investors will continue to digest domestic employment data and Chinese trade report ahead of U.S. economic data. Immediate support is seen at 0.7562 (78.6% retrace of 0.7472 and 0.7587), a break below targets 0.7529 (50.0% retrace). On the upside, resistance is located at 0.7615 (21-DMA), a break above could take it near 0.7640 (38.2% retrace).
NZD/USD: The New Zealand dollar advanced above the 0.7000 handle as selling pressure around the U.S. dollar and better-than expected Chinese trade data boosted the bid tone around the major. China's imports jumped at an annualized rate of 20.3 percent in March, beating estimates of 18.0 percent, while exports surged 16.4 percent versus forecasts of 3.2 percent. The Kiwi trades 0.5 percent higher at 0.7004, drifting away from a low of 0.6909 hit on Wednesday, its weakest since Mar. 14. FxWirePro's Hourly Kiwi Strength Index was at -1.48 (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 0.7022 (Apr 4 High), a break above could take it over 0.7050. On the downside, support is seen at 0.6969 (Session Low), a break below could drag it lower 0.6950.
Equities Recap
Asian shares traded in a volatile market as the greenback tumbled after President Donald Trump said the dollar was getting too strong and he preferred the Fed to keep interest rates low.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.2 percent.
Tokyo's Nikkei eased 0.68 percent to 18,426.84 points, Australia's S&P/ASX 200 index fell 0.77 percent to 5,888.10 points and South Korea's KOSPI gained 0.6 percent at 2,142.86 points.
Shanghai composite index edged down 0.1 percent to 3,270.71 points, while CSI300 index was trading 0.03 percent higher at 3,510.52 points.
Hong Kong’s Hang Seng was trading 0.17 percent higher at 24,357.02 points. Taiwan shares rose 0.2 percent to 9,836.68 points.
Commodities Recap
Crude oil prices steadied after easing from a 1-month high touched in the previous session as rising U.S. production stoked worries about global oversupply. International benchmark Brent crude was trading 0.5 percent up at $55.86 per barrel by 0500 GMT, having hit a high of $56.62 the prior day, its strongest since Mar. 1. U.S. West Texas Intermediate crude gained 0.5 percent to $53.06 a barrel, after rising as high as $53.74 the day before, its highest since Mar. 7.
Gold prcies rallied to a fresh five-month peak amid rising tensions over U.S. relations with Russia and North Korea, with the greenback tumbling after U.S. President Donald Trump stated the currency was too strong. Spot gold traded flat at 1,285.95 per ounce by 0504 GMT, after hitting its strongest since Nov. 10 at 1,287.87. U.S. gold futures climbed 0.7 percent to $1,287.50.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.240 percent lower by 0.055 bps, while 5-year yield was 0.056 bps down at 1.772 percent.
The Australian bonds rallied following prompted by comments by U.S. President Donald Trump on favoring low interest rates made in a newspaper interview published in late U.S. trading.The yield on the benchmark 10-year Treasury note slumped 5-1/2 basis points to 2.47 percent, the yield on 15-year note also plunged nearly 5-1/2 basis points to 2.87 percent and the yield on short-term 2-year traded nearly 2 basis points lower at 1.62 percent.
The New Zealand 10-year bond yields hit lowest since the United States Presidential election following global weak risk appetite. The yield on the benchmark 10-year Treasury note slumped 7-1/2 basis points to 2.96 percent, the yield on 5-year note plunged nearly 1 basis point to 2.36 percent and the yield on short-term 2-year traded nearly 1 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 edged up 1 Canadian cent to yield 0.725 percent and the 10-year climbed 30 Canadian cents to yield 1.509 percent. The difference in yield between Canada's 10-year bond and its U.S. equivalent narrowed by 3.6 basis points to a spread of -73.4 basis points as U.S. Treasuries outperformed.
