Market Roundup
- Dollar index hits 93.248 2016 low: Broad based losses building
- USD/JPY -1.0%, EUR/USD +0.23%, GBP/USD -0.16%
- DAX -0.85%, Brent +0.56%, Gold +1.25%, DXY -0.25%
- Germany Mar Retail Sales -1.1% m/m vs 0.0% revised previous, +0.4% exp
- Switzerland Apr KoF Ind. 102.7 vs 102.8 revised previous, 102.8 exp
- UK Mar BoE Consumer Cr. GBP1.883 bln vs 1.392bln previous, 1.3bln exp
- UK Mar Mtg Lending GBP7.435 bln vs 3.648 bln revised previous, 3.7bln exp
- UK Mar M4 Money Supply -0.4% vs +0.9% previous
- EZ Apr flash inflation -0.2% y/y vs 0.0% previous, -0.1% exp
- EZ Q1 Flash GDP +0.6% q/q vs 0.3% previous, 0.4% exp
- EZ Q1 Flash GDP +1.6% y/y vs 1.6% previous, 1.4% exp
- EZ Mar Unemployment 10.2% vs 10.4% revised previous, 10.3% exp
- UK Apr Cons Conf -3 vs 0 in Mar, Low since Dec 2014 - Gfk (Reuters Poll -1)
- UK Cons Econ Exp next 12mths -14 in Apr vs -12 Mar, Low Since Jun 2013 – Gfk
- New Zealand Business Confidence +6.2% in April Vs +3.2% in Pvs Survey - ANZ
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. personal income is expected to have edged up 0.3 percent in March from 0.2 percent in February.
- (0830 ET/1230 GMT) The U.S. Commerce Department is likely to report that personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, edged up 0.1 percent in March after posting a similar gain in February. While the core PCE is expected to slow in the 12 months through March, after increasing 1.7 percent in February.
- (0830 ET/1230 GMT) The U.S. consumer spending is likely to have edged up 0.2 percent in March after inching up 0.1 percent in February.
- (0830 ET/1230 GMT) The U.S. Labor Department will release its employment cost index for the first quarter. The index is expected to remain steady at 0.6 percent.
- (0830 ET/1230 GMT) Canada's gross domestic product is likely to drop by 0.1 percent in February, after posting a gain of 0.6 percent in January.
- (0830 ET/1230 GMT) The Statistics Canada will release data on producer and raw material prices in March. The raw material price index is likely to have gained 1.5 percent in March after slumping 2.6 percent in the prior month. While industrial product price for the month of March is also expected to gain from a decline of 1.1 percent in February.
- (1000 ET/1400 GMT) The University of Michigan's final reading of the consumer sentiment index for April is likely to be 90.0 compared with the preliminary reading of 89.7.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
No Major Event Scheduled
FX Beat
USD: The dollar continues to trade lower across the board and hit 18-month low against the yen, while against the sterling hit touched 12-weeks low. Against a basket of currencies, the dollar index trades 0.4 percent lower at 93.345, having touched a low of 93.248.
EUR/USD: The euro rose 0.4 percent higher at 1.1393, having touched sessions high of 1.1414. The major was strengthened by upbeat eurozone gross domestic product figures and unemployment data. Euroznes gross domestic product s.a. for the first quarter edged up 0.6 percent, surpassing market expectations 0.4 percent and previous 0.3 percent. On annualized basis it stood unchanged at 1.6 percent for the first quarter. Eurozones unemployment rate for the month of March declined to 10.2 percent against market consensus 10.3 percent and previous 10.4. The short term trend is slightly bullish as long as resistance 1.1320 holds. On the higher side major resistance is around 1.1400 and break above targets 1.14600/1.1500. The major support is around 1.1320 and any violation below targets 1.1270/1.12150 (Apr 24th low)/1.1150. The minor support is around 1.1350. The short term reversal only above 1.1460 level.
USD/JPY: The Japanese yen rallied against the dollar, moving to an 18-month high and on track for its biggest weekly gain since the 2008 financial crisis. The yen rose 3 percent on Thursday after the BoJ held off from expanding monetary stimulus. The Japanese currency trades 0.9 percent higher at 107.03, hovering towards a high of 106.90. The short term trend is slightly bearish as long as resistance 108.50 holds. On the lower side any break below 106.80 will drag the pair down till 106/104.85. The minor resistance is around 108.50 and break above targets 108.85/109.50.
GBP/USD: Sterling soared to 12-week high against the dollar as investors sold the greenback after the Federal Reserve's dovish tone on future interest rates hikes. The pound was on course for a second straight month of gains, since late 2013 and on track for a 1.5 percent weekly gain since early March. The sterling strengthened despite persistent concerns that Britain will vote to leave the European Union in June 23 referendum. The currency rose to a high of 1.4664, before easing back to 1.4604. Against the euro, sterling was a third of a percent weaker at 77.93 pence. The short term trend is bullish as long as support 1.4450 holds. On the higher side major resistance is around 1.46680 and break above targets 1.47000/1.4755/1.4800 levels. On the lower side major support is around 1.4450 and break below targets 1.4400/1.4345 level.
USD/CHF: The Swiss franc trades 0.4 percent higher at 0.9621, having touched sessions high of 0.9606. It continues to rise, drawing closer to a high of 0.9584 struck last week. The short term trend is slightly bearish as long as resistance 0.9700 holds. Any violation above 0.9700 will take the pair to next level till 0.9760/0.9800. On the lower side any break below 0.9630 will drag the pair down till 0.9575/0.9500. The short term trend reversal only below 0.9500 level.
AUD/USD: The Australian dollar edged up to 0.7634, having touched sessions high of 0.7668, pulling away from a a low of 0.7570 on Thursday. The Aussie has slipped 1 percent this week after surprisingly low inflation data for the first quarter signaled markets to price in a greater chance of a cut in interest rates. Markets attention will be on the Reserve Bank of Australia, when its holds its monthly policy meeting on May 3. The short term trend is slightly bearish as long as resistance 0.7760 holds. On the higher side major resistance is around 0.7760 and break above targets 0.7835/0.7850.The minor resistance is around 0.7650/0.7680. The major support is around 0.7500 and break below will drag the pair till 0.7485/0.7435. The minor support is around 0.7540.
NZD/USD: The New Zealand dollar was trading 0.4 percent higher at 0.6984, after going as high as 0.6995 in the session following the Reserve Bank of New Zealand stance to keep rates unchanged on Thursday. The kiwi continues to rise, hovering towards a peak of 0.7054 struck last week and pulling away from a low of 0.6806 hit earlier in the week. It is on course for a monthly rise of nearly 1 percent in the third consecutive month of gains. Immediate resistance is located at 0.7000 level, break above could take the pair near 0.7048 (Apr 20 High). On the downside, support is seen at 0.6923 (10-DMA).
Equities Recap
European shares slumped as the yen rallied to an 18-month high after the Bank of Japan stood pat on its policy decision on Thursday.
The pan-European FTSEurofirst 300 was down 1.2 percent in early trade at 1,357 points, German DAX lost 0.8 pct, France's CAC 40 declined 1.3 pct and Britain's FTSE 100 skidded 0.9 pct.
Shanghai Composite index ended down 0.2 pct at 2,938.32 points and was 0.7 pct down for the week. CSI300 index edged down 0.1 pct at 3,156.75 points and ended the week 0.6 pct down.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5 percent, on track for a decline of 1.7 percent for the week. Hong Kong's Hang Seng index slumped 1.5 pct at 21,067.05 points and was 1.9 pct down for the week, however, up 1.4 pct in April.
Commodities Recap
Oil prices edged up, hovering towards 2016 high of $48.16 struck on Thursday. It was booted by a weak dollar and falling production in the United States, however, looming rise in Middle
East output capped gains. Brent crude futures were trading at $48.05 a barrel at 0948 GMT, up 16 cents from their last close. U.S. crude was up 24 cents at $46.27 a barrel, with both contracts hitting fresh 2016 highs.
Gold advanced to a 7-week high as the dollar slumped on the Bank of Japan and Fed policy decision. Spot gold rose to a high of $1,280.60 an ounce, its highest since March 11. It had pared gains to trade up 0.7 percent at $1,274.30 by 0946 GMT. It is also 3.2 percent up for the week, recording its biggest weekly climb since the week ended Feb. 12.
Treasuries Recap
The 10-year U.S. treasuries yield stood at 1.8404 percent up by 0.002 bps.
The European bonds were trading mixed after receiving mixed bag of economic data. The benchmark German 10-year bonds yield rose 0.40 pct to 0.250 pct, French 10-year bunds yield jumped 2.05 pct to 0.611 pct, Spanish 10-year bonds yield inched down 0.06 pct to 1.583 pct and Portuguese 10-year bonds yield rose 2.44 pct to 3.227 pct.
Gilts opened 16 ticks higher than the settlement of 119.64 as month end and some soft domestic data underpinned.
Australian government bond futures were firm, with the 3-year bond contract up 2 ticks at 98.160. The 10-year contract edged up 1 tick to 97.4950, while the 20-year contract gained 1 tick to 96.9150. New Zealand government bonds gained slightly with yields down 1 to 2 basis points in the middle of the curve.
