Market Roundup
- IMF chief says Brexit delay averts 'terrible outcome'
- Cain's Fed chances in peril as fourth Republican opposes Trump pick
- Fed's Kashkari: Slight rise in U.S. inflation would not be alarming
- Japan should rely on spending, rather than on BOJ, to battle slowdown - IMF
- Australia's c.bank alert to risks as house prices slide, negative equity looms
- U.S. muni bond funds post $956.5 mln in inflows-Lipper
- Foreign CB US debt holdings +$11.464 bln to $3.471 tln Apr 10 week
- Treasuries +$11.486 bln to $3.073 tln, agencies +$1.104 bln to $326.823 bln
Economic Data Ahead
- (0500 ET/0900 GMT) EZ Feb Industrial Production MM, -0.6% f'cast, 1.4% prev
- (0500 ET/0900 GMT) EZ Feb Industrial Production YY, -1.0% f'cast, 1.1% prev
Key Events Ahead
- N/A Spring meeting of the World Bank Group and IMF in Washington D.C.
- (0700 ET/1100 GMT) ECB's Jens Weidmann and Germany's Olaf Scholz will hold a press event at the sidelines of a meeting of the IMF and the World Bank
- (0845 ET/1245 GMT) ECB's Peter Praet takes part in an event organised by Goldman Sachs in New York
- (1230 ET/1630 GMT) Germany's Olaf Scholz holds a speech at the Peterson Institute for International Economics in Washington D.C
FX Beat
DXY: The dollar index declined as comments from U.S. Federal Reserve Vice Chairman Richard Clarida reemphasized the central bank’s patience on rate hikes. The greenback against a basket of currencies traded 0.1 percent down at 96.93, having touched a low of 96.85 on Wednesday, its lowest since Mar. 28. FxWirePro's Hourly Dollar Strength Index stood at 11.22 (Neutral) by 0400 GMT.
EUR/USD: The euro rallied to a 2-1/2 week peak, as European Central Bank policymakers are increasingly leaning towards rewarding banks for lending to households and businesses than giving lenders a reprieve from a charge on their idle cash. The European currency traded 0.3 percent up at 1.1290, having touched a high of 1.1294, its highest since Mar. 26. FxWirePro's Hourly Euro Strength Index stood at 90.83 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on a series of data from the Eurozone economies and EZ industrial production, ahead of the U.S. import and export price index, and Fed Michigan consumer sentiment index. Immediate resistance is located at 1.1331 (Mar. 25 High), a break above targets 1.1361 (Mar. 19 High). On the downside, support is seen at 1.1213 (Mar. 28 Low), a break below could drag it till 1.1176 (Mar. 7 Low).
USD/JPY: The dollar surged to a 1-week peak after data released on Thursday showed first-time filings for U.S. unemployment benefits dropped to a 49-1/2-year low last week, indicating sustained labour market strength, while overall producer prices increased 0.6 percent in March, the largest rise since October. The major was trading 0.1 percent up at 111.74, having hit a low of 110.84 on Wednesday, its lowest since Apr. 1. FxWirePro's Hourly Yen Strength Index stood at -156.97 (Highly Bearish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. import and export price index, and Fed Michigan consumer sentiment index. Immediate resistance is located at 111.92 (Mar. 6 High), a break above targets 112.13 (Mar. 5 High). On the downside, support is seen at 111.20 (Apr. 3 Low), a break below could take it lower at 110.53 (Mar. 20 Low).
GBP/USD: Sterling rose, reversing some of its previous session losses, after the European Union leaders postponed Britain's exit from the bloc to Oct. 31, easing fears of no deal Brexit. The major traded 0.1 percent up at 1.3069, having hit a low of 1.2986 last week; it’s lowest since Mar. 29. FxWirePro's Hourly Sterling Strength Index stood at 105.97 (Highly Bullish) 0400 GMT. Investors’ attention will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.3121 (Apr. 5 High), a break above could take it near 1.3149 (Apr. 1 High). On the downside, support is seen at 1.3022 (Apr. 8 Low), a break below targets 1.3003 (Mar. 21 Low). Against the euro, the pound was trading 0.2 percent down at 86.36 pence, having hit a low of 86.51 on Tuesday, it’s lowest since Mar. 22.
AUD/USD: The Australian dollar steadied after the Reserve Bank of Australia in its Financial Stability Review emphasized the banking system had the capital to withstand a major crisis, even as it highlighted the threat to households from a further slump in home prices. On Thursday, Prime Minister Scott Morrison announced a general election to be held on May 18. The Aussie trades 0.1 percent up at 0.7132, having hit a high of 0.7174 on Wednesday; it’s highest since Feb. 27. FxWirePro's Hourly Aussie Strength Index stood at 22.79 (Neutral) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7070 (Mar. 29 Low), a break below targets 0.7041 (Mar. 14 Low). On the upside, resistance is located at 0.7168 (Mar. 21 High), a break above could take it near 0.7198 (Feb. 27 High).
NZD/USD: The New Zealand dollar rebounded after falling to a 2-1/2 month trough on a survey that showed manufacturing activity in New Zealand cooled in March as production and new orders dropped. The Kiwi trades 0.1 percent up at 0.6734, having touched a low of 0.6713, its lowest level Jan. 22. FxWirePro's Hourly Kiwi Strength Index was at 48.59 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6799 (Apr. 4 High), a break above could take it near 0.6827 (Mar. 5 High). On the downside, support is seen at 0.6706 (Jan. 22 Low), a break below could drag it below 0.6668 (Jan. 4 Low).
Equities Recap
Asian shares slumped amid anxiety ahead of corporate earnings and worries about a global economic slowdown.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.1 percent.
Tokyo's Nikkei rose 0.7 percent to 21,870.56 points, Australia's S&P/ASX 200 index gained 0.9 percent to 6,251.30 points and South Korea's KOSPI surged 0.3 percent to 2,230.78 points.
Shanghai composite index declined 0.1 percent to 3,185.86 points, while CSI 300 index traded 0.3 percent down at 3,982.93 points.
Hong Kong’s Hang Seng traded 0.3 percent lower at 29,749.79 points. Taiwan shares shed 0.05 percent to 10,805.30 points
Commodities Recap
Crude oil prices surged, supported by ongoing supply cuts led by producer club OPEC and by U.S. sanctions on petroleum exporters Iran and Venezuela. International benchmark Brent crude was trading 0.2 percent higher at $71.05 per barrel by 0442 GMT, having hit a high of $71.76 on Wednesday, its highest since Nov. 8. U.S. West Texas Intermediate was trading 0.2 percent up at $63.81 a barrel, after rising as high as $64.77 on Tuesday, its highest since the Nov. 1.
Gold prices consolidated near a 1-week low hit in the previous session as strong U.S. economic data supported the greenback. Spot gold was trading flat at $1,292.46 per ounce by 0446 GMT, having touched a high of $1,310.47 on Wednesday, its highest since March 28. U.S. gold futures gained about 0.1 percent to $1,294.60 an ounce.
Treasuries Recap
The Japanese government bond prices dipped, with the benchmark 10-year JGB yield half a basis point higher at minus 0.060 percent. The 20-year rose half a basis point to 0.345 percent.
The Australian government bonds plunged during Asian session after the United States 30-year Treasury yield touched 3-week high tracking a solid reading of the latter’s labour market, unveiled late yesterday. The yield on Australia’s benchmark 10-year note jumped nearly 3 basis points to 1.887 percent, the yield on the long-term 30-year bond surged 3-1/2 basis points to 2.522 percent and the yield on short-term 2-year traded 1 basis point higher at 1.495 percent.
In the Canadian government bond market, the two-year fell 5.8 Canadian cents to yield 1.591 percent and the 10-year slipped 37 Canadian cents to yield 1.725 percent.
