Market Roundup
- EUR/USD +0.2%, USD/JPY +0.3%, GBP/USD +0.2%, EUR/JPY +0.5%
- DXY flat, DAX +0.2%, FTSE +0.5%, Brent +0.7%, Copper +0.6%
- USD/JPY rises to 6 week high at 112.25
- Sterling, UK yields gain after strong UK manufacturing data
- UK PM May says EU united in getting deal that "works for them" - Rtrs
- Copper continues rise with help of Asia stock gains - Rtrs
- GB Apr Markit/CIPS Mfg PMI 57.3 vs prev 54.2. 54.0 f/c
- EZ Apr Markit Mfg final PMI 56.7 vs prev 56.8. 56.8 f/c
- EZ Mar Unemployment rate 9.5% vs prev 9.5%. 9.4% f/c
- CH Apr Manufacturing PMI 57.4 vs prev 58.6. 58.3 f/c
- Swiss domestic sight deposits fall to 479.458bln fm 480.587 w/e Apr 28
- Germany: Greek deal is important step but work continues - Rtrs
- ECB's Nouy wants Basel deal on bank rules as quickly as possible - Rtrs
- Australia central bank holds rates at 1.5%
- RBA unch policy consistent with sustainable growth/achieving infl target over time
- Saudi finance minister says likely to tap foreign, local bond markets again this yr - Rtrs
Economic Data Ahead
- (09:30 ET - 13:55 GMT) Redbook Weekly Same-Store Sales Index prev +1.7% y/y
- n/a Light Vehicle Sales (Apr) mkt 17.05 mn SAAR, prev 16.62 mn SAAR
- n/a -- Domestic Car Sales (Apr) prev 4.59 mn SAAR
- n/a -- Domestic Light Truck Sales (Apr) prev 8.65 mn SAAR
Key Events Ahead
- (14:00 ET - 18:00 GMT) FOMC begins 2-day policy meeting
- (15:30 ET - 19:30 GMT) FedTrade Operation 30-year Ginnie Mae (max $1.0 bn)
FX Beat
DXY:
The index is facing strong support around 98.70 and any break below confirms further weakness, a decline till 98 is possible. On the higher side, near term resistance is around 99.14 (200- day MA) and any close above will take the index till 99.36 (daily Tenken-Sen)/100.03 (Apr 21st high)/100.33 (55- EMA). Minor trend reversal only above 100.05.
EUR/USD:
EUR/USD is in consolidation phase between 1.08610 and 1.09500 for the past five trading days. Euro is trading on the higher side for the entire Apr series and any break above 1.09780 confirms further bullishness. It is currently trading around 1.08925.
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:
GBP/USD hits high of 1.29648 on Apr 28th 2017 and closed slightly below 1.2900 level yesterday. The pair has shown sort of profit booking after jumping continuously form the low of 1.23650.
The pair has broken minor support of 1.2885 (4H Kijun-Sen) and declined till 1.28699 at the time of writing. Intraday trend is weak as long as resistance 1.29650 holds. Any break below 4H kijun –sen confirms minor weakness, decline till 1.27500 likely. On the higher side, any break above 1.3000 will take the pair to next level till 1.3030.
USD/CHF:
USD/CHF is struggling to close above 200- day MA. It is currently trading around 0.99486 0.14% lower.
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.
USD/JPY:
USD/JPY broken the major resistance of 112 and jumped till 112.30 at the time of writing. The pair has formed a minor bottom around 108.13 and any major weakness can be seen only below that level. It is currently trading around 112.19.
The pair has taken support near 111.40 (100 EMA) and any minor weakness can be seen only below that level. Any break below 111.40 will drag the pair down till 110.85.
On the higher side, any close above 112 will take the pair till 113/113.80.
Equities Recap
As technology industry shares hit record highs on Wall Street, stocks rose in Europe and Asia on Tuesday. The Nasdaq Composite index hit a record high on Monday as leading tech giants – Apple, Alphabet, Microsoft, Amazon, and Facebook – all hit intraday or closing highs.
The pan-European STOXX 600 share index was up 0.2 percent. Italy’s FTSE MIB was up 0.43 percent at 20,697.77 points in early deals; Spain's IBEX was up 0.1 percent, France's CAC 40 was up 0.3 percent, Portugal’s PSI20 was down 0.23 percent At 5,022.33 points.
Japan's Nikkei closes 0.7 percent higher at 19,445.70 points after some robust earnings.
Hong Kong’s Hang Seng index closed up 0.3 percent at 24,696.13 points. Shanghai Composite Index closed down 0.3 percent at 3,143.71 points. China's CSI300 index closes down 0.4 percent at 3,426.58 points.
Britain's FTSE 100 was up 0.3 percent.
Commodities Recap
Oil prices surged higher on Tuesday driven by expectations that output cuts would be extended into latter half of 2017 by major OPEC exporters, which outweighed rising production in the U.S., Canada and Libya.
Benchmark Brent crude oil was trading higher 30 cents at $51.82 a barrel by 0840 GMT. The futures contract plunged to a one-month low of $50.45 last week following the restart of two Libyan oilfields. U.S. light crude was traded higher by 20 cents $49.04.
Diminishing demand for gold on the back of a rally in equities and strengthening of the U.S. dollar against the yen, kept gold near three-week lows. Spot gold remained largely unchanged at $1,255.90 per ounce, as of 0733 GMT. U.S. gold futures traded 0.1 percent higher at $1,256.70 an ounce.
Spot silver was up 0.4 percent to $16.91 an ounce. Silver dropped 2 percent to $16.78 an ounce on Monday. Platinum was up 0.5 percent at $929.50, and Palladium fell about 0.2 percent at $812.88.
Treasuries Recap
U.S.: The U.S. Treasuries lost ground ahead of the country’s non-farm employment change, scheduled to be released on May 3, besides, the Federal Reserve’s interest rate decision, due on the same day. The yield on the benchmark 10-year Treasury rose 1 basis point to 2.34 percent, the super-long 30-year bond yields also climbed nearly 1 basis point to 3.02 percent while the yield on the short-term 2-year note too traded close to 1 basis point higher at 1.29 percent.
UK: The UK gilts slumped after witnessing wider-than-expected manufacturing PMI for the month of April, released today. The yield on the benchmark 10-year gilts, jumped 2-1/2 basis points to 1.11 percent, the super-long 30-year bond yields also climbed nearly 3-1/2 basis points to 1.74 percent while the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 0.08 percent.
German: The German bunds disappointed markets after reading the steady manufacturing PMI for the month of April, as was anticipated, besides the unchanged rate of unemployment during the month of March led to the loss in debt market. The yield on the benchmark 10-year bond, rose 1 basis point to 0.34 percent, the long-term 30-year bond yields jumped 2-1/2 basis points to 1.12 percent and the yield on the short-term 2-year bond traded 1 basis point higher at -0.72 percent.
NZD: The New Zealand bonds rallied at the time of closing as investors wait to watch the country’s GlobalDairyTrade price auction, scheduled to be held later in the day. Also, the country’s first quarter employment report, scheduled to be released on May 3, is awaited by market participants. At the time of closing, the yield on the benchmark 10-year bond, slumped 1-1/2 basis points to 3.04 percent, the yield on 7-year note also slipped 1-1/2 basis points to 2.70 percent while the yield on short-term 2-year note plunged 2 basis points to 2.07 percent.
AUS: The Australian government bonds slumped after the Reserve Bank of Australia (RBA) maintained its benchmark cash rate on hold at its monetary policy meeting held today. The yield on the benchmark 10-year Treasury note, jumped 3 basis points to 2.62 percent, the yield on 15-year note surged 4 basis points to 3.04 percent and the yield on short-term 2-year traded 1-1/2 basis points higher at 1.69 percent.
