Market Roundup
- US CommSec Ross expects to complete NAFTA rewriting this year, to launch trade actions to protect US aluminum/semiconductor/shipbuilding industries, will ramp up free-trade talks with EU/Japan/UK, looking at potentially “opening up” South Korea – Wall Street Journal.
- Trump to propose 10% tax on offshore earnings - Bloomberg.
- Trump to abandon contentious border tax on imports – New York Times.
- US military being moving THAAD missile defense into SoKorea site – Yonhap.
- Australia Q1 CPI +0.5% q/q, +2.1% y/y, trimmed mean +0.5%, +1.9%, weighted mean +0.4%, +1.7%, +0.6/+2.2%, +0.5/+1.8% and +0.5/+1.8% eyed, inflation highest since ’14 and enters RBA target band but still underwhelms.
- NZ March migration gain, short-term visitors -0.2% y/y.
Economic Data Ahead
- (0300 ET/0700 GMT) Sweden April manufacturing confidence index, 113.4 eyed; last 112.7.
- (0300 ET/0700 GMT) Sweden April consumer confidence index, 103.5 eyed; last 102.6.
- (0400 ET/0800 GMT) Switzerland April investor sentiment index; last 29.6.
- (0830 ET/1230 GMT) US building permits – revised; prelim 1.26 mln AR, +3.6% m/m.
Key Events Ahead
- N/A BoJ Policy Board begins two-day meeting.
- N/A UK PM May, EU Juncker, Barnier meeting in London.
- N/A Frankfurt Finance Summit ’17.
- N/A Spain 10-year EUR linker via BNP/Caixa/Citi/HSBC/MS/SocGen.
- N/A Norway NOK3 bln 1.75% 2027 NST-479 government bond auction.
- N/A Pres Trump announcement on tax reform/reduction.
- (0400 ET/0800 GMT) Riksbank executive board meeting.
- (0500 ET/0900 GMT) Italy E6 bln 6-month BOT auction.
- (0530 ET/0930 GMT) ECB 3-month LTRO, E3 bln allotment eyed, E3.35 bln maturing.
- (0530 ET/0930 GMT) UK DMO GBP800 mln 0.125% 2046 index-linked Gilt auction.
- (0600 ET/1000 GMT) Sweden 4.25% and 3.5% 2019 and 2022 government bond auctions.
- (0600 ET/1000 GMT) Finland E0.5-1.5 bln zero% and 1.375% 2022 and 2047 RFGB auctions.
- (0700 ET/1100 GMT) Buba Dombret in Frankfurt panel discussion.
- (1700 ET/2100 GMT) Trump administration to brief full House on NoKorea situation.
FX Recap
USD: The dollar edged up 0.2 percent to 111.30 yen. The greenback added to the hefty gains made on Tuesday, when it climbed 1.2 percent, the dollar's biggest one-day rise against the yen in three months.
EUR/USD: The euro edged up 0.1 percent to $1.0938. On Tuesday, it hit a 5-1/2 month high of $1.0950 as traders digested centrist candidate Emmanuel Macron's victory in the first round of France's presidential election on Sunday. Against the yen, the euro edged up 0.2 percent to 121.76 yen. The euro has gained 4.1 percent against the yen so far this week.
USD/JPY: The yen edged lower on Wednesday, remaining under pressure as risk sentiment improved and safe haven demand eased, on relief over the first round of the French presidential election. A sustained close above 111.08 is required to take the parity higher towards 111.45, 112.19, 113.72, 115.37 and 117.42 marks. Alternatively, a daily close below 111.08 will drag the parity down towards 108.13 levels.
GBP/USD: The sterling trades almost flat against U.S. dollar at 1.2827 mark. Pair made intraday high at 1.2843 and low at 1.2824 marks. The Sterling sank to a two-week low against the euro on Tuesday, hit by the single currency's renewed strength as relieved investors turned optimistic on Europe after the first round of the French presidential election.
AUD/USD: The Australian dollar dropped a quarter of a U.S. cent to $0.7517, having briefly popped as high as $0.7557. Pair made intraday high at $0.7552 and low at $0.7506 marks. Immediate resistance was seen at $0.7612 and support was seen at $0.7500 marks.
NZD/USD: The New Zealand dollar dropped to a two-week low of $0.6932, having shed 1.4 percent so far this week. The kiwi emerged from the ANZAC day public holiday on Tuesday, which muted trading volumes, as one of the worst-performing major currencies.
Equities Recap
Japan’s Nikkei was trading around 0.93 percent higher at 19,257 points.
Hong Kong’s Hang seng was trading 0.58 percent higher at 24,598 points.
Australia’s S&P ASX200 was trading 0.80 percent higher at 5,918 points.
South Korea’s kospi was trading 0.40 percent higher at 2,208 points.
Shanghai composite index to open down 0.1 pct at 3,132.92 points and China's CSI300 index to open flat at 3,440.25 points.
Taiwan’s market was trading 0.01 percent lower at 9,842.93 points.
India’s NSE Nifty was trading around 0.46 percent higher at 9,351.65 points and BSE Sensex was trading at 0.41 percent higher at 30,064.82 points.
Commodities Recap
Oil prices resumed their downward trend on Wednesday as data showed a rise in U.S. crude inventories and record supplies in the rest of the world cast doubt on OPEC's ability to cut supplies and tighten the market. U.S. West Texas Intermediate (WTI) crude oil futures were trading down 13 cents, or 0.3 percent, at $49.43 per barrel at 0416 GMT, after gaining 0.7 percent in the previous session. WTI has fallen for seven of the past eight sessions. Brent crude futures, the international benchmark for oil prices, were at $51.99 per barrel, down 11 cents, or 0.2 percent, from their last close. Brent is around 8.5 percent below its April peak.
Gold fell to a two-week low on Wednesday as investor appetite for riskier assets surged on renewed optimism over the U.S. economy and as political uncertainty in France receded, softening demand for safe-haven assets. Spot gold was mostly unchanged at $1,263.55 at 0322 GMT. Prices touched a low of 1,260.90 earlier in the session, the lowest since April 11. U.S. gold futures were down 0.2 percent at $1,265.40 an ounce.
Treasuries Recap
New Zealand government bonds eased, sending yields 2.5 basis points higher at the long end of the curve.
Australian government bond futures eased, with the three-year bond contract off 3 ticks at 98.120. The 10-year contract fell 3.5 ticks to 97.3450, while the 20-year contract slipped 5 ticks to 98.7650.
