Market Roundup
- FOMC ViceChair Fischer – Rate hikes likely manageable for foreign economies, Fed policy normalization will be gradual – Reuters.
- Japan DepPM/FinMin Aso – Won’t resort to helicopter money, fiscal prudence important, pushes back against pressure for bilateral trade deal – Reuters.
- Japan March trade surplus Y614.7 bln, Y575.8 bln eyed, exports +12.0% y/y, imports +15.8%, +6.7% and +10.4% eyed, exports to US +3.5% but surplus -8.1%, exports to China +16.4%, Asia +16.3%, Japan exports best since Jan ’15, FY ‘16/17 balance in surplus, first full-year surplus in six years.
- Japan March crude import volume -16.8% y/y, LNG -0.1%, thermal coal +5.6%.
- MoF flow data week-ended April 15 – Japanese sell net Y231.7 bln foreign stocks, Y796.2 bln bonds, buy Y21.9 bln bills; foreign investors buy net Y315.2 bln Japanese stocks, Y410.5 bln JGBs, sell Y631.9 bln bills.
- Japan April Reuters Tankan Mfg index +26, non-Mfg +28, March +25, +26, Mfg index highest since Aug ’07, July eyed at +20, +26, mood best since pre- financial crisis but caution still reigns.
- China SAFE – Will open capital account in prudent, orderly way, cross-border flows becoming more balanced, Fed move impact diminishing, China commercial bank March FX net sales $11.6 bln – Reuters.
- Australia Q1 NAB survey – businesses ramp up hiring, investment plans, Confidence index +6 vs Q4 +6, conditions index +8 vs +6, improvements eyed.
- New Zealand Q1 CPI +1.0% q/q, +2.2% y/y, +0.8% and +2.0% eyed, Q4 +0.4%, +1.3%, CPI now above RBNZ target midpoint as food prices jump, causes temporary?
Economic Data Ahead
- (0830 ET/1230 GMT) United States w/e initial jobless claims, 242k forecast last 234k.
- (0830 ET/1230 GMT) United States Apr Philly Fed business sentiment index, 25.0 forecast last 32.8.
- (0900 ET/1300 GMT) Belgium Apr consumer confidence index; last zero.
- (1000 ET/1400 GMT) United States Mar leading indicators index, +0.2% m/m forecast last +0.6%.
- (1000 ET/1400 GMT) Eurozone Mar consumer confidence index – flash, -4.8 forecast last -5.0.
Key Events Ahead
- (0430 ET/0830 GMT) Spain E4.5-5.5 bln 0.4/1.5/6.0/2.9% 2022/27/29/46 Bono auctions.
- (0450 ET/0850 GMT) France E4.5-5 bln both zero% 2020 and 2022 OAT re-openings.
- (0530 ET/0930 GMT) UK DMO GBP2.75 bln 0.5% 2022 Gilt auction.
- (0550 ET/0950 GMT) France E0.75-1.25 bln all 0.1% 2021/25/47index-linked BTan auctions.
- (0600 ET/1000 GMT) Sweden 3.5% and 2.5% 2022 and 2025 government bond auctions.
- N/A IMF/World Bank/G20 Spring meetings in Washington, DC.
- N/A US TsySec Mnuchin, Japan DepPM/FinMin Aso meeting in Washington, DC.
- (0900 ET/1300 GMT) Banxico Gov Carstens speaks in Brookings Institute webcast.
- (0930 ET/1330 GMT) IMF Lagarde press conference in Washington, DC.
- (1100 ET/1500 GMT) German FinMin Schaeuble speaks at Washington, DC Carnegie Endowment.
- (1130 ET/1530 GMT) BoE Gov Carney speaks at Washington, DC IIF event.
- (1215 ET/1615 GMT) EC Moscovici speaks at Washington, DC Peterson Institute.
- (1315 ET/1715 GMT) US TsySec Mnuchin, et al in conversation at IIF/18:30 NEC Cohn.
- (1900 ET/2300 GMT) Buba Dombret speaks at New York Columbia University.
FX Beat
DXY: The dollar eased versus its major peers as investors remained cautious ahead of this weekend's first round of presidential voting in France. The dollar against a basket of currencies traded 0.1 percent down at 99.70, having hit a low of 99.47 on Tuesday, its lowest since Mar. 28. FxWirePro's Hourly Dollar Strength Index stood at -75.71 (Slightly Bearish) by 0500 GMT.
EUR/USD: The steadied after falling from a 3-week high in the previous session, as investors anxiously awaited this weekend's first round of presidential voting in France. The European currency traded 0.1 percent up at 1.0718, hovering towards a high of 1.0736 touched on Wednesday, its highest since Mar. 30. FxWirePro's Hourly Euro Strength Index stood at 109.86 (Bullish) by 0400 GMT. Investors now await Eurozone's preliminary consumer confidence, ahead of U.S. weekly unemployment benefits and Philadelphia Fed Manufacturing Survey. Immediate resistance is located at 1.0750, a break above targets 1.0800. On the downside, support is seen at 1.0701 (78.6% retrace of 1.0569 and 1.0736), a break below could drag it near 1.0673 (61.8% retrace).
USD/JPY: The dollar rose above the 109.00 handle as markets await the first round of the French elections this weekend. The major traded 0.1 percent up at 108.98, having touched a low of 108.13 earlier in the week, its lowest since Nov. 15. FxWirePro's Hourly Yen Strength Index stood at -8.45 (Neutral) by 0400 GMT. Investors’ will continue to track developments surrounding French and Britain's election, ahead of U.S. weekly unemployment benefits, Philadelphia Fed Manufacturing Survey and Treasury Secretary Steven Terner Mnuchin's speech. Immediate resistance is located at 109.44 (61.8 % retrace of 111.57 and 108.13), a break above targets 109.85 (50.0% retrace). On the downside, support is seen at 108.54, a break below could take it near 108.13 (Apr. 17 Low).
GBP/USD: Sterling rose, reversing some of its previous session losses, supported by risk-on trades amid positive Asian stocks and oil prices. Investors’ now await BoE Governor Carney’s speeches after the UK PM Theresa May called in snap general election on June 8. Sterling trades 0.15 percent up at 1.2795, having hit a high of 1.2901 on Tuesday, its highest since Oct. 3. FxWirePro's Hourly Sterling Strength Index stood at 146.54 (Highly Bullish) by 0400 GMT. Investors’ attention will remain on the developments around the UK’s elections and BoE Governor's speeches, ahead of the U.S. Philly Fed manufacturing index and jobless claims figures. Immediate resistance is located at 1.2850, a break above could take it near 1.2901 (Apr. 18 High). On the downside, support is seen at 1.2696 (38.2% retrace of 1.2365 and 1.2901), a break below targets 1.2650. Against the euro, the pound traded flat at 83.77 pence, having hit a high of 82.99 on Tuesday, its strongest since July 22.
AUD/USD: The Australian dollar regained the 0.7500 handle after declining to a 1-week low in the previous session, following the release of better-than-expected the NAB Australian business confidence data for Q1 2017. Australia's business confidence improved slightly in Q1 2017, rising to 6 against a previous reading of 5, while conditions rose to 8 index points. The Aussie trades 0.1 percent higher at 0.7505, having hit a peak of 0.7610 on Monday, it’s highest since Apr. 4. FxWirePro's Hourly Aussie Strength Index stood at -86.90 (Slightly Bearish) by 0500 GMT. Investors will continue to track broad based market sentiment, ahead of U.S economic releases, including the Philly Fed manufacturing index and unemployment claims data. Immediate support is seen at 0.7491 (Previous Session Low), a break below targets 0.7471 (Apr. 12 Low). On the upside, resistance is located at 0.7516 (78.65 retracement of 0.7610 and 0.7491), a break above could take it near 0.7536 (50% retrace).
NZD/USD: The New Zealand dollar rallied above the 0.7000 handle after data showed first-quarter inflation accelerated to a 2.2 percent, the fastest in five years, prompting investors to slightly narrow the odds on a future rate hike. On Wednesday, the major rose to an over 3-week high, however, turned lower to close down at 0.7004. The Kiwi trades 0.5 percent up at 0.7036, having touched a high of 0.7052 in the previous session, its strongest since Mar. 27. FxWirePro's Hourly Kiwi Strength Index was at 8.75 (Neutral) by 0500 GMT. Investors’ will continue to track broad based market sentiment, ahead of the U.S. economic data. Immediate resistance is located at 0.7052 (Previous Session High), a break above could take it near 0.7090. On the downside, support is seen at 0.6997 (61.8% retrace of 0.6909 and 0.7052), a break below could drag it near 0.6960.
Equities Recap
Asian shares advanced as commodity prices steadied, while investors remained cautious ahead of the outcome of the first round of French presidential elections due at the weekend.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1 percent after declining 0.5 percent in early deals.
Tokyo's Nikkei gained 0.31 percent to 18,488.49 points, Australia's S&P/ASX 200 index rose 0.2 percent to 5,814.80 points and South Korea's KOSPI climbed 0.47 percent at 2,148.74 points.
Shanghai composite index edged down 0.21 percent to 3,162.71 points, while CSI300 index was trading 0.3 percent higher at 3,455.89 points.
Hong Kong’s Hang Seng was trading 0.37 percent higher at 23,912.89 points. Taiwan shares shed 0.1 percent to 9,632.69 points.
Commodities Recap
Crude oil prices steadied after falling to multi-week lows in the previous session, as a slight decline in U.S. crude inventories fuelled hopes that a push to rein in global oversupply could be gathering some momentum. International benchmark Brent crude was trading 0.2 percent up at $53.18 per barrel by 0408 GMT, having hit a low of $52.56 the day before, its weakest since Mar. 30. U.S. West Texas Intermediate rose 0.1 percent to $51.04 a barrel, after declining as low as $50.06 on Wednesday, its lowest since Apr. 4.
Gold prices held firm after falling as much as 1 percent to a 1-week low the previous day, as concerns surrounding North Korea and the upcoming French presidential election offered support to the safe-haven asset. Spot gold traded flat at $1,278.76 per ounce as of 0412 GMT, having hit a low of $1273.90 per ounce on Wednesday, its lowest since Apr. 12. U.S. gold futures were down 0.2 percent at $1,281.30.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.205 percent higher by 0.003 bps, while 5-year yield was 0.005 bps up at 1.734 percent.
The Australian government bonds plunged as investors moved away from safe-haven assets amid geopolitical tensions that were offset by a more positive market reaction to the sudden announcement of the United Kingdom’s snap election, to be held on June 8. The yield on the benchmark 10-year Treasury note jumped nearly 5 basis points to 2.51 percent, the yield on the 15-year note climbed 5-1/2 basis points to 2.92 percent and the yield on short-term 2-year traded 3 basis points higher at 1.78 percent.
The New Zealand bonds slumped after reading the higher-than-expected consumer price inflation for the first quarter of this year, released earlier today. The yield on the benchmark 10-year bond jumped 3-1/2 basis points to 2.97 percent, the yield on 7-year note also surged 3-1/2 basis points to 2.68 percent and the yield on the short-term 2-year note too traded 3-1/2 basis points higher at 2.15 percent.
The Canadian government bond prices were lower across the maturity curve, with the price of the two-year down 1.5 Canadian cents to yield 0.706 percent and the benchmark 10-year fell 30 Canadian cents to yield 1.465 percent.
