Market Roundup
- Reports China moving as many as 150k troops to North Korean border – Chosun.com, Bloomberg.
- US Pres Trump, UK PM May agree Russia should break ties with Assad – Reuters.
- Impressive market resilience shouldn't be taken for granted - Mohamed El- Erian, Bloomberg.
- BoJ Gov Kuroda Diet testimony – Counting on wage growth to boost inflation, not happening, confident BoJ can exit QE when time comes – Reuters.
- Shrinking workforce threatens Japan’s economy – Nikkei.
- FOMC Chair Yellen – Economy pretty healthy, appropriate to hike gradually if the economy continues to perform, policy stance closer to neutral now, Fed independence under threat from Congress – Reuters.
- UK March BRC like-for-like retail sales -1.0% y/y, total sales -0.2%, Feb -0.4%, +0.4%, like-for-like sees biggest decline since Aug ’15, total sales off for first time since Aug ’16, weakness on timing of Easter holiday.
- Moody’s – Australia, Canada, New Zealand and Sweden sovereign credit profiles resilient to rising household debt.
- Australia March NAB business conditions +14%, confidence +6, last +9, +7, business activity jumps to decade high but retail in negative zone.
- New Zealand March electronic card retail sales -0.3% m/m, +5.6% y/y.
Economic Data Ahead
- (0330 ET/0730 GMT) Sweden Mar CPI, +0.2% m/m, +1.5% y/y forecast; last +0.7%, +1.8%.
- (0330 ET/0730 GMT) Sweden Mar CPIF, +0.2% m/m, +1.7% y/y forecast; last +0.7%, +2.0%.
- (0430 ET/0830 GMT) Great Britain Mar CPI, +0.3% m/m, +2.3% y/y forecast; last +0.7%, +2.3%.
- (0430 ET/0830 GMT) Great Britain Mar – core, +0.5% m/m, +1.9% y/y forecast; last +0.8%, +2.0%.
- (0430 ET/0830 GMT) Great Britain Mar RPI, +0.4% m/m, +3.2% y/y forecast; last +1.1%, +3.2%, index 268.4.
- (0430 ET/0830 GMT) Great Britain Mar RPIX; last +1.1% m/m, +3.5% y/y.
- (0500 ET/0900 GMT) Eurozone Feb industrial output, +0.1% m/m, +2.0% y/y forecast; last +0.9%, +0.6%.
- (0500 ET/0900 GMT) Germany ZEW expectations index, 14.8 forecast; last 12.8.
- (0500 ET/0900 GMT) Germany ZEW current conditions index, 77.5 forecast; last 77.3.
- (0600 ET/1000 GMT) United States Mar NFIB business optimism index; last 105.3.
- (1000 ET/1400 GMT) United States Feb JOLTS job openings, 5.66 mln forecast; last 5.63 mln.
Key Events Ahead
- N/A Riksbank Gov Ingves lecture in Stockholm.
- (0400 ET/0800 GMT) Netherlands E0.75-1.25 bln 2.5% 2033 DSL auction.
- (0500 ET/0900 GMT) Austria National Bank ViceGov Ittner speaks to business reporters.
- (0500 ET/0900 GMT) Italy E6 bln 12-month BOT auction.
- (0530 ET/0930 GMT) Belgium E2.1-2.5 bln 3 and 12-month treasury certificate auctions.
- (0530 ET/0930 GMT) ECB zero% 7-day refi, E13.0 bln allotment forecast, E13.2 bln maturing.
- (1300 ET/1700 GMT) United States small business credit survey/report on employer firms ‘16
- (1345 ET/1745 GMT) Minny Fed Kashkari (voter, dove) in Minneapolis question-answer session.
FX Beat
DXY: The dollar eased versus the Japanese yen on dovish remarks by the Fed Chair Janet Yellen and escalating geopolitical risk in the Middle East. The dollar against a basket of currencies traded up at 101.04, having hit a high of 100.34 the day before, its highest since Mar. 15. FxWirePro's Hourly Dollar Strength Index stood at 19.47 (Neutral) by 0500 GMT.
EUR/USD: The euro edged down, hovering towards a 1-month low touched on Monday, as investors remain cautious with just two weeks to go for French election. The European currency traded 0.1 percent down at 1.0588, having touched a low of 1.0596 in the previous session, its lowest since Mar. 9. FxWirePro's Hourly Euro Strength Index stood at -99.21 (Slightly Bearish) by 0400 GMT. Investors now await Eurozone industrial production data and ZEW Survey - Economic Sentiment ahead of U.S. JOLTS Job opening figures and FOMC member Kashkari's speech. Immediate resistance is located at 1.0600, a break above targets 1.0641 (78.6% retrace of 1.0905 and 1.0570). On the downside, support is seen at 1.0569 (Previous Session Low), a break below could drag it lower1.0550.
USD/JPY: The dollar declined, extending losses for the second consecutive session as concerns over tensions with North Korea and Syria weighed on U.S. Treasury yields and offset expectations of U.S. interest rate hikes. The major traded 0.3 percent down at 110.61, hovering towards a low of 110.09 touched on Friday, its lowest since Nov. 18. FxWirePro's Hourly Yen Strength Index stood at 65.19 (Bullish) by 0400 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. JOLTS Job opening figures and FOMC member Kashkari's speech. Immediate resistance is located at 111.14 (50.0 % retrace of 112.19 and 110.09), a break above targets 112.20 (Mar 31 High). On the downside, support is seen at 110.50, a break below could take it near 110.00.
GBP/USD: Sterling rose, extending gains above the 1.2400 handle, as investors’ eyed upcoming inflation data that could revive bets on eventually tighter Bank of England policy. The major trades up at 1.2421, rebounding from a low of 1.2365 touched on Friday, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at 32.44 (Neutral) by 0400 GMT. Investors’ attention will remain on the UK retail sales, producer price index input/output and consumer price index ahead of U.S. economic data and Fed official's speech. Immediate resistance is located at 1.2450, a break above could take it near 1.2498. On the downside, support is seen at 1.2365, a break below targets 1.2300. Against the euro, the pound traded 0.1 percent up at 85.25 pence, having hit a high of 85.16 earlier in the session.
AUD/USD: The Australian dollar steadied following strong NAB Business Conditions data. The NAB Monthly Business Survey for March 2017 released showed the Business Conditions index rose 5 points to +14 index points, its highest level since the global financial crisis, while the business confidence edged down 1 point to 6 points. The Aussie trades flat at 0.7500, having hit a low of 0.7475 in the previous session, it’s lowest since Jan. 17. FxWirePro's Hourly Aussie Strength Index stood at -48.32 (Neutral) by 0500 GMT. Investors will continue track overall market sentiment ahead of U.S. economic data and FOMC member speech. Immediate support is seen at 0.7475 (Previous Session Low), a break below targets 0.7450. On the upside, resistance is located at 0.7525 (23.6% retrace of 0.7679 and 0.7475), a break above could take it near 0.7554 (38.2% retrace).
NZD/USD: The New Zealand dollar eased, reversing some of the previous session gains as fresh U.S. dollar buying dragged the major lower. The pair failed to benefit from upbeat New Zealand electronic card retail sales data, which rose at an annualized rate of 5.6 percent in March from previous 2.6 percent, while on monthly basis it came in at -0.3 percent. The Kiwi trades 0.1 percent lower at 0.6953, drifting towards a low of 0.6920 hit on Monday, its weakest since Mar. 15. FxWirePro's Hourly Kiwi Strength Index was at 10.16 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of U.S. macro fundamental drivers and Fed official's speech. Immediate resistance is located at 0.6986 (21-DMA), a break above could take it above 0.7000. On the downside, support is seen at 0.6920 (Previous Session Low), a break below could drag it lower 0.6900.
Equities Recap
Asian shares traded in a volatile market as growing geopolitical risks in Asia and uncertainty over the looming French vote sent investors towards safe-haven assets.
MSCI's broadest index of Asia-Pacific shares outside Japan down 0.4 percent.
Tokyo's Nikkei eased 0.5 percent to 18,706.17 points, Australia's S&P/ASX 200 index rose 0.40 percent to 5,936.00 points and South Korea's KOSPI fell 0.37 percent at 2,125.49 points.
Shanghai composite index edged down 0.62 percent to 3,249.00 points, while CSI300 index was trading 0.92 percent lower at 3,472.80 points.
Hong Kong’s Hang Seng was trading 1.01 percent lower at 24,016.48 points. Taiwan shares fell 0.5 percent to 9,832.42 points.
Commodities Recap
Crude oil prices edged down after climbing to a five-week high earlier in the session, despite a shutdown at Libya's largest oilfield and expectations of strong demand as the U.S. summer driving season kicks in. International benchmark Brent crude was trading 0.1 percent down at $55.92 per barrel by 0428 GMT, having hit an early high of $56.12, its strongest since Mar. 7. U.S. West Texas Intermediate crude fell 0.2 percent to $52.99 a barrel, after rising as high as $53.21 earlier, its highest since Mar. 7.
Gold prices rose as rising political tensions in North Korea and the Middle East supported the metal's safe-haven appeal. Spot gold was up 0.1 percent at $1,255.97 per ounce by 0430 GMT, having hit a high of $1,270.55 on Friday, its highest since Nov. 10. U.S. gold futures rose 0.3 percent to $1,257.90.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.340 percent lower by 0.002 bps, while 5-year yield was 0.03 bps down at 1.871 percent.
The Australian 10-year bond yields plunged to near 5-month low tracking weakness in the U.S. counterparts, following ongoing political tension and overseas uncertainties. The yield on the benchmark 10-year Treasury note slumped 6 basis points to 2.54 percent, the yield on 15-year note plunged nearly 6 basis points to 2.94 percent and the yield on short-term 2-year traded nearly 3 basis points lower at 1.64 percent.
The New Zealand bonds jumped at the time of closing, is the response to a rise in global demand for safe-haven assets, following overseas uncertainties and political tension. The yield on the benchmark 10-year bond slumped 4 basis points to 3.08 percent, the yield on 7-year note remained also plunged 3-1/2 basis points to 2.72 percent and the yield on short-term 2-year note also traded 4-1/2 basis points lower at 2.08 percent.
The Canadian government bond prices were mixed across the yield curve, with the two-year flat to yield 0.762 percent and the 10-year falling 4 Canadian cents to yield 1.602 percent. On Friday, the 10-year yield touched a more than four-month low of 1.505 percent.
