Market Roundup
- EUR/USD +0.4%, USD/JPY -0.1%, GBP/USD +0.3%, EUR/JPY +0.5%
- DXY -0.15%, DAX +0.75%, FTSE +0.35%, Brent +0.75%, Copper -0.75%
- Copper slides further after biggest one-day loss in 20 months - Rtrs
- German April Markit Services PMI 55.4 vs previous 54.7. 54.7 forecast
- German Apr Markit Comp final PMI 56.7 vs previous 56.3. 56.3 forecast
- Eurozone Apr Markit Sev final PMI 56.4 vs previous 56.2. 56.2 forecast
- Eurozone Markit Comp final PMI 56.8 vs rev 56.7. 56.7 forecast
- GB Apr Markit/CIPS Serv PMI 55.8 vs previous 55.0. 54.5 forecast
- GB Mar Mortgage lending 3.105bln vs previous 3.386bln rvsd. 3.400bln forecast
- GB Mar Mortgage approvals 66.837k vs previous 67.936k rvsd. 67.400k forecast
- UK Mar Consumer credit +1.624bln vs previous 146bln. 1.3bln forecast
- UK Mar M4 money supply growth +0.3% m/m vs previous -0.2% revised
- EZ Mar Retail sales 0.3% m/m, 2.3% y/y vs previous 0.5%/1.7% rvsd. 0.1%/2.1% forecast
- Swiss consumer sentiment index slips in Q2. -8 vs previous -3
- Macron, Le Pen clash on euro, terrorism, in French pre-election TV showdown - Rtrs
- Swedish c.bank's Jansson says risky to move policy ahead of ECB - Rtrs
- Swedish c.bank's Jansson says tool box still full if needed - Rtrs
- Norway's central bank keeps interest rates on hold as expected - Rtrs
- UK's Prince Philip to step down from royal duties - Rtrs
- Turkey's EU membership secondary as long as EU standards achieved, minister says - Rtrs
Economic Data Ahead
- (0830 ET/1230 GMT)Challenger Layoffs (Apr) previous 43,310
- (0930 ET/1330 GMT) Initial Jobless Claims (Apr 29 week) previous 257k
- (0930 ET/1330 GMT) -- Continued Claims (Apr 22 week) previous 1.988 mn
- (0930 ET/1330 GMT) International Trade (Mar) market -$44.5 bn, previous -$43.6 bn
- (0930 ET/1330 GMT) Productivity (Q1) market +0.2% q/q AR, previous +1.3% q/q AR
- (0930 ET/1330 GMT) Unit Labor Costs (Q1) market +2.5% q/q AR, previous +1.7% q/q AR
- (1100 ET/1500 GMT) Factory Orders (Mar) market +0.4% m/m, previous +1.0% m/m
- (1100 ET/1500 GMT) -- Factory Orders Ex-Trans (Mar) previous +0.4% m/m
- n/a Chain Store Sales (Apr)
- (1600 ET/2000 GMT) Treasury STRIPS
Key Events Ahead
- (1045 ET/1445 GMT) FedTrade Operation 30-year Fannie Mae/Freddie Mac (max $1.6 bn)
- (1145 ET/1545 GMT) FedTrade Operation 15-year Fannie Mae/Freddie Mac (max $575 mn)
FX Beat
DXY:
The index recovered slightly till 99.46 today and once again shown a selling from the high. On the higher side, near term resistance is around 99.65 (21- EMA) and any close above will take the index till 100.03 (Apr 21st high)/100.33 (55- EMA).
Minor trend reversal only above 100.05.The near term support is around 98.70 and any break below will drag the index down till 98.
EURUSD:
EUR/USD extends choppy trade above 200-DMA. The major hit session highs above 1.0900, reversing most of the previous session's losses supported by softer tone around the buck. Upbeat Eurozone PMI data supporting the single currency.
On the lower side, minor weakness can be seen only below 1.08500 bottom formed after French election will drag the pair down till 1.08200/1.07850 (61.8% retracement of 1.06822 and 1.09508)/1.0745 (21 EMA).
The near term major resistance 1.09780 (50% retracement of 1.16163 and 1.03400) and any violation above will take the pair till 1.1000/1.1045.The minor resistance is around 1.09329 (61.8% retracement of 1.1299 and 1.03400).
GBP/USD:
The British Pound failed to benefit much from the better-than-expected construction PMI and upbeat manufacturing PMI data. Investors still dealing with latest worries over a possible 'hard Brexit' scenario. Cable had shown a minor weakness during Asian session, but has since pared losses. The pair has edged higher from session lows at 1.2830 to trade at 1.2886 at the time of writing.
Major resistance is seen around 1.29655 high made on Apr 28th 2017 and any violation above will take the pair till 1.3000. Bullish continuation can be seen only above 1.3000 level. On the lower side, near term support is around 1.28500 and any break the support will drag the pair till 1.27549 (Apr 21st low).
USD/JPY:
The Japanese Yen remained on the back foot despite mildly weaker sentiment surrounding global equity markets. Wednesday's FOMC statement, which downplayed concerns over slowing economic growth during Q1 2017, lifted the UST yields and thereby the dollar.
USD/JPY price action has broken into daily cloud, but upside seems to struggling to break past cloud top. We find strong resistance at 112.80/90 levels, only break above could see further gains. Momentum studies are still bullish, RSI is strong at 66 levels with scope to run further.
50-DMA at 111.68 is strong support on the downside and we see weakness and chance of bearish reversal only below. On the higher side, breakout above cloud top could see upside upto 113.40 levels.
USD/CHF:
USD/CHF struggled to extend Wednesday's sharp recovery from the lowest level since March 28. The pair retraced most of previous session's gains and traded with mild negative bias on Thursday, flirting with session lows around 0.9917 at the time of writing.
The near term resistance is around 1.000 and any break above target 1.0024. Any break above 1.0024 will take the pair till 1.00413 (61.8% retracement of 1.03435 and 0.98135)/ 1.0120/ 1.0170. On the lower side, support stands at 0.9860 and any decline below that will drag the pair till 0.9800.
AUD/USD:
Aussie on the back foot following the release of dismal Australian trade balance and Chinese services PMI data. AUD/USD consolidates Wednesday's slump, finds respite from Governor Lowe's comments. The pair edged higher from lows near 0.7394 to currently trade around 0.7417 levels.
Technical studies are bearish. Price has shown breakout below major trendline support. RSI and Stochs are biased lower. We see drag till 0.7385 which is 61.8% Fib retrace of 0.7160 to 0.7749 rally likely.
Equities Recap
European shares to 20-month high buoyed by solid debate performance by centrist Emmanuel Macron. STOXX 600 hit its highest since August 2015. France's stock market surged as investors closed out bets on rising French political risk on Thursday.
France's benchmark CAC 40 index hit a nine-and-a-half-year high, up 0.9 percent on the day and outperforming a less than half percent rise in Europe's broader STOXX 600 index of leading shares. Germany's DAX was up 0.87 percent at 12,636.50 points, while Italy's FTSE MIB was trading 1.55 percent higher at 21,080.50 points.
Australia's S&P/ASX 200 index unofficially closed down 0.35 percent at 5,871.60 points. Taiwan stocks closed up 0.1 percent at 9,967.64 points
Commodities Recap
Oil prices extended slump for the fourth consecutive day on Thursday weighed by lower than expected decline in U.S. inventories and stronger US dollar. Brent crude oil futures were down 32 cents at $50.47 a barrel by 0957 GMT, while U.S. West Texas Intermediate (WTI) futures were also down 32 cents at $47.50 a barrel.
Rising prospects of U.S. Federal Reserve rate hike pushed gold prices to a six-week low on Thursday. Spot gold fell 0.3 percent to $1,234.52 per ounce by 0724 GMT, after hitting its lowest since March 21 at $1,232.60 earlier in the session. U.S. gold futures fell more than 1 percent to $1,235.40 an ounce.
Spot silver rose 0.2 percent to $16.42, while platinum was up 0.4 percent at $896.15. Palladium fell 0.2 percent to $797.50, extending its nearly 2 percent drop from the previous session.
Treasuries Recap
U.S.: The U.S. Treasuries traded lower ahead of the country’s labor market report for the month of April, scheduled to be released on May 5. The yield on the benchmark 10-year Treasury jumped 3-1/2 basis points to 2.34 percent, the super-long 30-year bond yields also climbed nearly 3-1/2 basis points to 2.98 percent while the yield on short-term 2-year note traded 1-1/2 basis point higher at 1.31 percent.
UK: The UK gilts traded plunged after reading the country’s higher-than-expected services PMI for the month of April. The yield on the benchmark 10-year gilts, rose nearly 3 basis points to 1.10 percent, the super-long 30-year bond yields jumped 2-1/2 basis points to 1.75 percent and the yield on the short-term 2-year traded 2 basis points higher at 0.09 percent.
German: The German bunds slumped after reading the Eurozone’s wider-than-expected retail sales for the month of March, besides, the country’s upbeat April Purchasing Managers’ Index (PMI) for April that waned investors away from safe-haven assets. The yield on the benchmark 10-year bond, jumped 4 basis points to 0.36 percent, the long-term 30-year bond yields climbed 3-1/2 basis points to 1.14 percent and the yield on the short-term 2-year bond traded 1-1/2 basis points higher at -0.71 percent.
NZD: The New Zealand bonds remained flat at the time of closing Thursday as investors remain sidelined amid a muted trading session that witnessed data of least economic significance. At the time of closing, the yield on the benchmark 10-year bond, which moves inversely to its price, closed flat at 3.05 percent, the yield on 7-year note rose 1/2 basis point to 2.72 percent while the yield on short-term 2-year note also remained steady at 2.10 percent.
AUS: The Australian government bonds plunged as investors booked profits towards the end of the trading week despite comments by the Reserve Bank of Australia (RBA) Governor Philip Lowe, who remained cautious in his economic outlook, citing higher housing prices that pose near-term risks to the economy. The yield on the benchmark 10-year Treasury note, jumped 4 basis points to 2.64 percent, the yield on 15-year note also climbed 4 basis points to 3.06 percent and the yield on short-term 2-year traded nearly 4 basis points higher at 1.72 percent.
