Market Roundup
- RBNZ leaves OCR unchanged at 1.75%, as forecast, policy to remain accommodative for considerable period, uncertainties still over international outlook, inflation to return to mid-point of target band, weak Q4 growth likely temporary, further NZD weakness needed to achieve more balanced growth.
- Japan Diet testimony on school scandal reveals nothing new.
- US conservative leader optimistic of common ground on healthcare – Reuters.
- Canada budget surplus rises slightly in January, C$1.24 bln.
- Most UK employers do not plan to up pay to match rising inflation – XpertHR.
- UK car production hits a 17-year high in February – UK SMMT.
- EZ SRB Koenig - EZ banks under scrutiny but none in danger – Reuters.
- Germany FinMinistry – Current account surplus to shrink in coming years, economic upswing continuing however – Reuters.
- France Le Pen calls for end to “Francafrique” relations, CFA franc ccy
Economic Data Ahead
- (0300 ET/0700 GMT) Germany Apr GfK consumer sentiment index, 10.0 forecast; last 10.0.
- (0345 ET/0745 GMT) France Mar business climate index, 107.0 forecast; last 107.0.
- (0530 ET/0930 GMT) Great Britain Feb retail sales, +0.4% m/m, +2.6% y/y forecast; last -0.3%, +1.5%.
- (0530 ET/0930 GMT) Great Britain Feb - ex-fuel, +0.4% m/m, +3.1% y/y forecast; last -0.2%, +2.6%.
- (0700 ET/1100 GMT) Great Britain Mar CBI distributive trades index, 5.0 forecast; last 9.00.
- (0830 ET/1230 GMT) United States w/e initial jobless claims, 240k forecast; last 241k.
- (1000 ET/1400 GMT) United States Feb new home sales, 570k AR, +0.7% m/m forecast; last 560k, +3.7%.
- (1000 ET/1400 GMT) Belgium Mar leading indicator index, -0.3 forecast; last -1.1.
- (1100 ET/1500 GMT) Eurozone Feb consumer confidence index – flash, -5.7 forecast; last -4.9.
- (1100 ET/1500 GMT) United States Mar KC Fed Mfg index, 11.0 forecast; last Mfg 11.0, composite 14.0.
Key Events Ahead
- N/A ECB General Council meeting.
- (0400 ET/0800 GMT) ECB Nouy EZ ECON parliamentary committee testimony.
- (0515 ET/0915 GMT) BoE DepGov Broadbent speaks at London’s Imperial College.
- (0800 ET/1200 GMT) FOMC Chair Yellen speaks at Washington, DC Fed conference.
- (1100 ET/1500 GMT) ECB Lautenschlaeger in Vienna panel discussion.
- (1230 ET/1630 GMT) Minny Fed Kashkari speaks at Washington, DC luncheon.
- (1300 ET/1700 GMT) SNB Moser, Maechler speak at Zurich money market event.
- (1900 ET/2300 GMT) Dallas Fed Kaplan speaks at Chicago moderated question-answer event.
FX Beat
DXY: The dollar steadied after declining to multi-week lows versus its major peers in the previous session, following a rebound in the U.S. Treasury yields. The greenback against a basket of currencies traded up at 99.75, having hit a low of 99.55 the day before, its lowest since Feb. 2. FxWirePro's Hourly Dollar Strength Index stood at -103.78 (Highly Bearish) by 0500 GMT.
EUR/USD: The dollar edged down, extending losses from the previous session as the greenback rebounded following a rise in the U.S. Treasury yields. Moreover, recent weak Eurozone current account data coupled with yesterday's dovish comments from ECB policymaker Villeroy continued to dent the sentiment around the major. The European currency traded 0.1 percent lower at 1.0791, having touched a high of 1.0824 on Wednesday, its highest since Feb. 2. FxWirePro's Hourly Euro Strength Index stood at 18.10 (Neutral) by 0400 GMT. Investors now await the U.S. unemployment claims figures and new home sales numbers, amid a lack of data from the Eurozone docket. Immediate resistance is located at 1.0828 (Feb 2 High), a break above targets 1.0873 (Dec 8 High). On the downside, support is seen at 1.0770 (5-DMA), a break below could drag it near 1.0745 (23.6% retrace of 1.0525 and 1.0824).
USD/JPY: The dollar gained, halting its 7-day losing streak as the U.S. Treasury yields resumed rise. On Wednesday, the major slumped to a 4-month low as growing doubts over Trump's ability to push through with economic policies triggered broad risk aversion. The pair traded 0.1 percent up at 111.30, having hit a low of 110.72 in the previous session, its lowest since Nov. 22. FxWirePro's Hourly Yen Strength Index stood at 153.45 (Highly Bullish) by 0400 GMT. Investors’ will continue to track price action in the U.S. Treasury yields, ahead of U.S. unemployment claims figures and new home sales numbers. Immediate resistance is located at 111.75 (78.6% retracement of 115.50 and 110.72), a break above targets 112.28 (5-DMA). On the downside, support is seen at 111.00, a break below could take it near 110.45 (Nov. 21 Low).
GBP/USD: Sterling held gains after rising to a near 4-week high above the 1.2500 handle in the previous session, as investors remained cautious ahead of UK retail sales figures. The major trades flat at 1.2486, having hit a high of 1.2505 the day before, its highest since Feb. 24. FxWirePro's Hourly Sterling Strength Index stood at 54.26 (Bullish) by 0400 GMT. Investors’ focus will also remain on developments surrounding Brexit process, ahead of the U.S. economic data. Immediate resistance is located at 1.2548 (Feb. 14 High), a break above could take it near 1.2605 (Jan. 27 High). On the downside, support is seen at 1.2411 (23.6% retrace of 1.2108 and 1.2505), a break below targets 1.2350. Against the euro, the pound traded 0.1 percent up at 86.42 pence, having hit a high of 86.36 earlier, its highest since Mar 6.
AUD/USD: The Australian dollar declined, extending losses for the third consecutive session, as investors rushed to safe havens assets amid risk-off market sentiment. The Aussie trades 0.15 percent down at 0.7662, having hit a low of 0.7639 in the previous session, it’s lowest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at -96.90 (Slightly Bearish) by 0500 GMT. Investors will continue to track broad based market sentiment, ahead of the U.S. economic data for further momentum on the major. Immediate support is seen at 0.7650 (38.2% retrace of 0.7491 and 0.7749), a break below targets 0.7632 (21-DMA). On the upside, resistance is located at 0.7694 (5-DMA), a break above could take it over 0.7720.
NZD/USD: The New Zealand dollar stood firm after the Reserve Bank of New Zealand left official interest rates at 1.75 percent a record low and reiterated it would stay on hold for a considerable period of time. The Kiwi trades 0.05 percent up at 0.7047, having touched a peak of 0.7089 on Tuesday, it’s strongest since Mar. 2. FxWirePro's Hourly Kiwi Strength Index was at -23.55 (Neutral) by 0500 GMT. Investors’ will continue to digest RBNZ policy decision, ahead of U.S. macro fundamental drivers. Immediate resistance is located at 0.7066, a break above could take it near 0.7100. On the downside, support is seen at 0.7012 (38.2% retrace of 0.6890 and 0.7089), a break below could drag it lower 0.7000.
Equities Recap
Asian shares rose following overnight gains on the Wall Street, while the dollar recovered from a four-month low versus the yen, amid concerns about U.S. President Donald Trump's pro-growth policies.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.1 percent.
Tokyo's Nikkei gained 0.14 percent to 19,068.37 points, Australia's S&P/ASX 200 index rose 0.23 percent to 5,697.60 points and South Korea's KOSPI was trading 0.29 percent up at 2,174.73 points.
Shanghai composite index edged down 0.22 percent to 3,238.18 points, while CSI300 index was trading 0.01 percent lower at 3,449.64 points.
Hong Kong’s Hang Seng was trading 0.02 percent lower at 24,316.77 points. Taiwan shares added 0.1 percent at 9,930.74 points.
Commodities Recap
Crude oil prices steadied after declining to multi-month lows in the previous session, as the market remained under pressure amid increasing U.S. crude inventories that dampen OPEC-led efforts to reduce global production. International benchmark Brent crude was trading 0.5 percent up at $50.94 per barrel by 0357 GMT, having hit a low of $49.75 on Wednesday, its lowest since Nov. 30. U.S. West Texas Intermediate crude rose 0.5 percent to $48.36 a barrel, after falling as low as $47.08, its weakest since Nov. 30.
Gold prices eased but stayed within the sight of a 3-week peak hit in the previous session, as the greenback recovered from seven-week lows. Spot gold declined 0.2 percent at $1,245.93 per ounce by 0407 GMT, having hit a high of $1,251.15 on Wednesday, its strongest since Feb. 28. U.S. gold futures were down 0.3 percent at $1,246.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.408 percent higher by 0.013 bps, while 5-year yield was 0.013 bps up at 1.943 percent.
The Australian bonds rallied as investors poured into safe-haven assets, following uncertainties over the United States President Donald Trump’s administration. The yield on the benchmark 10-year Treasury note slumped 2-1/2 basis points to 2.75 percent, the yield on 15-year note nose-dived nearly 2 basis points to 3.14 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.77 percent.
The New Zealand bonds closed modestly higher after the Reserve Bank of New Zealand maintained a neutral policy stance at its monetary policy decision, held earlier today. The yield on the benchmark 10-year bond closed flat at 3.25 percent, the yield on 7-year note slipped nearly 1 basis point to 2.82 percent while the yield on short-term 2-year note traded 1/2 basis points higher at 2.12 percent.
The Canadian government bond prices were higher across the maturity curve, with the 2-year price up 3 Canadian cents to yield 0.774 percent and the benchmark 10-year rising 19 Canadian cents to yield 1.682 percent.
