Market Roundup
- US launches over 50 Tomahawk missiles against Syria government in retaliation for chemical weapon attack on rebel-held territory – NBC, Reuters.
- Currency misalignment gains stature in Trump trade plans.
- Trump at dinner with Xi says to develop very, very good relationship over time.
- Foreign CB US debt holdings +$7.180 bln to $3.214 trln April 5 week, Treasury holdings +$7.857 bln to $2.891 trln, agencies -$412 mln to $260.654 bln.
- NY Fed – Swaps w/foreign CBs $5.075 bln Apr 5 week, ECB4.525 bln, rest BOJ.
- Lipper – Investors pull $12 bln from US stock funds in latest week, outflow largest this year.
- US – Japan in talks to prevent China acquiring Westinghouse according to US official, Japan Trade Min Seko not true.
- Japan Fin Min Aso – US VP Pence to visit Japan April 18-19, dialogue not limited to trade and currencies, to include energy, infrastructure .
- Japan February total cash earnings +0.4% y/y, real wages unch, overtime pay +0.6%, overtime pay sees first y/y rise since May ‘16.
- Japan end-March foreign reserves $1.230 trln, end-February $1.232 trln.
- German FinMin Schaeuble sees IMF sticking with Greece program .
- Australia March AI/HIA PCI 51.3, off 1.9 point from February.
Economic Data Ahead
- (0245 ET/0645 GMT) France February industrial output, +0.5% m/m eyed; last -0.3%.
- (0245 ET/0645 GMT) France February trade balance, E900 mln deficit eyed; last E7.94 bln deficit.
- (0245 ET/0645 GMT) France February current account balance; last E7.0 bln deficit.
- (0245 ET/0645 GMT) France February budget balance; last E5.4 bln deficit.
- (0300 ET/0700 GMT) Spain February industrial output, +3.1% y/y eyed; last +2.5%.
- (0300 ET/0700 GMT) Switzerland March foreign currency reserves, CHF674 bln eyed; last CHF668.2 bln.
- (0330 ET/0730 GMT) UK March Halifax HPI, +0.2% m/m eyed; last +0.1%.
- (0400 ET/0800 GMT) Italy February retail sales, -0.2% m/m eyed; last +1.4% m/m, -0.1% y/y.
- (0430 ET/0830 GMT) UK February industrial output, +0.2% m/m, +3.7% y/y eyed; last -0.4%, +3.2%.
- (0430 ET/0830 GMT) UK February manufacturing output, +0.3% m/m, +3.9% y/y eyed; last -0.9%, +2.7%.
- (0430 ET/0830 GMT) UK February construct. output, unch m/m, +1.9% y/y eyed; last -0.4%, +2.0%.
- (0430 ET/0830 GMT) UK February trade balance, GBP10.9 bln deficit eyed; last GBP10.83 bln def.
- (0430 ET/0830 GMT) UK February non-EU; last GBP2.45 bln deficit.
- (0830 ET/1230 GMT) US March non-farm payrolls, +180k eyed; last +235k.
- (0830 ET/1230 GMT) US March unemployment, 4.7% eyed; last 4.7%, participation 63.0%.
- (0830 ET/1230 GMT) US March average workweek, 34.4 hrs eyed; last 34.4 hrs.
- (0830 ET/1230 GMT) US March average earnings, +0.2% m/m eyed; last +0.2%.
- (1000 ET/1400 GMT) US February wholesale inventories, +0.4% m/m eyed; prelim +0.4%.
- (1000 ET/1400 GMT) US February wholesale sales, +0.2% m/m eyed; last -0.1%.
- (1500 ET/1900 GMT) US February consumer credit, $13.9 bln eyed; last $8.79 bln.
Key Events Ahead
- (0300 ET/0700 GMT) EZ EcoFin meeting in Valletta, ECB Draghi, et al to attend (till Apr 8).
- (0400 ET/0800 GMT) Riksbank DepGov Ohlsson speaks at Stockholm STUC seminar.
- (0500 ET/0900 GMT) BoE Gov Carney speaks at Thomson Reuters.
- (0600 ET/1000 GMT) UK DMO GBP0.5/0.5/1.5 bln 1/3/6-month treasury bill auctions.
- (1215 ET/1615 GMT) NY Fed Dudley speaks at New York Princeton University luncheon.
- N/A US Pres Trump, China Pres Xi summit in Florida (final day).
FX Recap
USD: The dollar index, which gauges the greenback against a basket of six major rivals, was down slightly on the day at 100.66, up 0.3 percent for the week.
EUR/USD: The euro was slightly lower on the day at $1.0643, after dovish comments from European Central Bank President Mario Draghi helped push it to a three week low of $1.0629 overnight. It was down 0.1 percent for the week. Draghi said on Thursday that he does "not see cause to deviate" from the ECB's stated policy path, which includes bond buying at least until the end of the year and record-low rates until well after that to stimulate inflation. Pair made intraday high at 1.0660 and low at 1.0638 marks. Immediate resistance was seen at $1.0689 level. A daily close below 1.0632 will drag the parity down towards 1.0557 levels.
USD/JPY: Yen tends to gain in times of geopolitical tension or risk aversion; the dollar erased its early modest gains and dropped 0.3 percent to 110.44 yen, down 0.8 percent for the week. The yen was marginally higher against the U.S. dollar in early hours of Asia and trading around 110.12 mark. A sustained close above 110.78 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 110.78 will drag the parity down towards 110.00 levels.
GBP/USD: The pound was trading almost flat against U.S. dollar. Short term bias remains neutral till the time pair holds key support at 1.2422 levels. On the other side, current upside movement will take the parity higher towards key resistance around 1.2504, 1.2569, 1.2706 and 1.2928 levels respectively.
AUD/USD: The Australian dollar dropped to 82.84 yen. It’s lowest since mid-November on concerns about a potential escalation in the Syrian conflict following the U.S. attack. Against the greenback, the Aussie made a one-month trough of $0.7516. Immediate support level was seen at $0.7497 while resistance level was seen at $0.7587.
NZD/USD: The New Zealand dollar was unchanged at $0.6975. Intraday bias remains neutral till the time pair holds key support at $0.6953 marks. On the top side, key resistances are seen at $0.7022, $0.7049 and $0.7089 marks respectively.
Equities Recap
Japan’s Nikkei was trading around 0.72 percent higher at 18,732 points.
Hong Kong’s Hang seng was trading 0.70 percent lower at 24,106 points.
Australia’s S&P ASX200 was trading around 0.18 percent lower at 5,846 marks.
South Korea’s Kospi was trading 0.11 percent lower at 2,150 points.
India’s NSE Nifty was trading 0.18 pct lower at 9,245 while BSE Sensex was trading at 0.20 pct lower at 29,876 marks.
Commodities Recap
Oil prices surged more than 2 percent on Friday after the United States launched dozens of cruise missiles at an airbase in Syria. After tepid trading before the news, Brent crude futures, the international benchmark for oil, jumped to $56.08 per barrel before easing to be up 1.6 percent at $55.75 per barrel at 0310 GMT. U.S. West Texas Intermediate (WTI) crude futures also climbed by over 2 percent, to a high of $52.94 a barrel before receding to be up 1.8 percent at $52.61.
Gold rose more than 1 percent on Friday to a 5-month high as investors sought safe-haven assets after the United States launched cruise missiles on a Syrian air base, potentially escalating tensions with Syrian allies Russia and Iran. Spot gold rose 1 percent to $1,264.30 per ounce by 0340 GMT. It earlier climbed as much as 1.4 percent to $1,269.28, its highest since Nov. 10, and was on track for a fourth straight week of gains. U.S. gold futures also rose over 1 percent to $1,266.20.
Treasuries Recap
Yields on Australian 10-year bonds dropped sharply to their lowest since mid-November at 2.52 percent as high-rated sovereign bonds rallied globally. Australian government bond futures gained too, with the three-year bond contract up 7 ticks at 98.22. The 10-year contract added 5.5 ticks to 97.4450.
New Zealand government bonds edged higher sending yields 2 basis points lower at the longer end of the curve.
U.S. 10-year treasury note futures prices up 0.3 pct, after U.S. ordered a targeted military strike against an airfield in Syria.
