Market Roundup
- EUR/USD flat, USD/JPY +0.1%, EUR/JPY +0.1%, DXY -0.05%
- DAX +0.15%, FTSE +0.3%, Brent +0.6%, Copper -0.9%, Gold -0.05%
- Sterling firms after UK wage growth beats expectations
- Brent oil rises for 8th day on possible extension to supply cut
- Gold hits 5-month peak as geopolitical tensions drive flight to safety
- World trade seen growing 2.4 percent in 2017, uncertainty weighs - WTO
- EU's Juncker says Italy going in right direction - newspaper
- IMF's Lagarde: protectionist 'sword' hangs over firming growth
- US policy uncertainty, Brexit cloud German outlook -economic institutes
- UK Mar Claimant count +25.5k vs -3.0K forecast. Largest increase since July 2011
- UK ILO jobless -45,000 in 3 months to Feb to 1.559mln, unemployment rate 4.7%
- UK Average weekly earnings +2.3% y/y in 3 months to Feb vs 2.2% forecast
- Germany Mar Wholesale price index 0.0% m/m, 4.7% y/y vs previous 0.5%/5.0%
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Labor Department publishes import and export prices index for the month of March. The import prices are likely to have declined 0.2 percent after rising 0.2 percent in February, while exports are expected to have edged up 0.1 percent after increasing 0.3 percent in the prior month.
- (1000 ET/1400 GMT) Bank of Canada will meet to announce its benchmark interest rate, where it is expected to hold interest rates at 0.50 percent.
- (1400 ET/1800 GMT) The U.S. reports its monthly budget statement for the month of March. The government is likely to show budget deficit narrowed to $167 billion after posting a deficit of $192 billion in the previous month.
- (1830 ET/2230 GMT) New Zealand will release its Business PMI index for the month of April. The index stood at 55.2 in the previous month.
- (1845 ET/2245 GMT) Statistics New Zealand will release food price index for the month of March. The indicator posted a rise of 0.2 percent in the prior month.
- (1901 ET/2301 GMT) The Royal Institution of Chartered Surveyors (RICS) will report Britain's Housing Price Balance for the month March. The indicator is expected to have decreased to 22 percent from 24 percent in February.
- (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending April 7.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending April 7.
Key Events Ahead
- (1000 ET/1400 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in a moderated question-and-answer session before the Cornerstone Credit Union League Annual Meeting, in Fort Worth, Texas.
- (1115 ET/1515 GMT) Bank of Canada Governor Stephen S. Poloz and Deputy Governor Carolyn Wilkins' presser.
- (1245 ET/1645 GMT) FedTrade 15-yr Fannie Mae/Freddie Mac securities (max $525 mn)
- (1615 ET/2015 GMT) Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins will testify before a House of Commons committee on finance.
FX Beat
DXY: The dollar steadied versus most of its major peers amid intensifying geopolitical tensions. The dollar against a basket of currencies traded flat at 100.71, having hit a high of 100.34 on Monday, its highest since Mar. 15. FxWirePro's Hourly Dollar Strength Index stood at 41.69 (Neutral) by 1000 GMT.
EUR/USD: The euro steadied above the 1.0600 handle as comments from Eurogroup President Jeroen Dijsselbloem, noting that the ECB’s broad monetary policy can be phased out, boosted the bid tone behind the major. However escalating geo-political tensions over Syria weakened market sentiment. The European currency traded flat at 1.0603, having touched a low of 1.0596 on Monday, its lowest since Mar. 9. FxWirePro's Hourly Euro Strength Index stood at -125.34 (Highly Bearish) by 1000 GMT. The near term resistance is around 1.06480 (23.6% retracement of 1.09058 and 1.05695) and any break above targets 1.0678 (21- day EMA)/1.07020. On the lower side, any break below 1.05250 will drag the pair down till 1.04950/1.0340.
USD/JPY: The dollar rebounded after falling to a to a near 5-month low earlier in the day on the back of rising geopolitical tensions and worries over France's presidential election. The pair fell over 1 percent on Tuesday, with the dollar tumbling below 110 yen for the first time since mid-November, and it extended those losses on Wednesday. The major traded flat at 109.64, retreating from an early low of 109.34, its lowest since Nov. 17. FxWirePro's Hourly Yen Strength Index stood at 149.22 (Slightly Bullish) by 1000 GMT. On the higher side, any break above 111.65 (21- day EMA) and will take the pair till 112.49 (55- day EMA)/113.44. The near term support is around 108.50 (20- day MA) and any break below will drag it till 106.32.
GBP/USD: Sterling rose to its highest level in over a week after data on British wage growth surpassed expectations. The economy's unemployment rate stood steady at an almost 12-year low of 4.7 percent, in line with estimates and previous reading, while the workers' total earnings including bonuses rose by an annual 2.3 percent in the three months to February, above forecasts of 2.2 percent. Sterling trades flat at 1.2490, having touched a high of 1.2517 earlier, its highest since Apr. 3. FxWirePro's Hourly Sterling Strength Index stood at 84.76 (Slightly Bullish) by 1000 GMT. The minor bullishness can be seen above 1.2640 (200- day MA). The near term resistance is around 1.2550-55/1.2600. On the lower side, near term support is around 1.24800 (100- day EMA) and any break below will drag the pair down till 1.2430 (21- day EMA)/1.2400/1.23650 (Apr 7th low). Against the euro, the pound was unchanged at 84.88 pence, having hit a 6-week high of 84.77 earlier in the session.
USD/CHF: The Swiss franc edged down as the greenback steadied following a slight rebound in the U.S. Treasury yields. The major traded up at 1.0076, hovering towards a high of 1.0107 hit on Monday, its strongest since Mar. 14. FxWirePro's Hourly Swiss Franc Strength Index stood at -11.04 (Neutral) by 1000 GMT. On the lower side, the pair broke 1.0070 trend line support and any break below 1.00700 (trend line joining 0.9834 and 1.00144) will drag the pair down till 1.000/0.9960/0.9934 (200- day MA).The jump from 0.95493 and 1.03435 will come to end if the pair breaks below 0.9800 level. The near term resistance is around 1.0120 (76.4% retracement of 1.0170 and 0.98135) and any break above targets 1.0170 (Mar 7 low). Any close above 1.0170 will take the pair till 1.03450.
AUD/USD: The Australian dollar eased, extending losses below the 0.7500 handle as geopolitical worries and downbeat Chinese consumer price index data underpinned the safe-haven assets. The Aussie trades 0.1 percent down at 0.7489, having hit a low of 0.7474 in the previous session, its lowest since Jan. 17. FxWirePro's Hourly Aussie Strength Index stood at -85.33 (Slightly Bearish) by 1000 GMT. On the lower side, any break below 0.7490 confirms minor weakness, a decline till 0.7450/0.7380 likely. The major resistance is around 0.7554 (200- day MA) and a break above will take the pair till 0.7605 (21- day EMA) /07680/0.7745.
Equities Recap
European shares rallied, strengthened by gains in financials stocks, while investors' flight-to-safety underpinned traditional safe-haven assets like the yen, gold, and top-rated government bonds.
The pan-European STOXX 600 index advanced 0.4 percent to 382.95 points, while the FTSEurofirst 300 index gained 0.4 percent to 1,507.92 points.
Britain's FTSE 100 trades 0.1 percent up at 7,372.84 points, while mid-cap FTSE 250 rose 0.4 percent to 19,377.89 points.
Germany's DAX edged up 0.3 percent at 12,184.48 points; France's CAC 40 trades 0.38 percent higher at 5,121.42 points.
Tokyo's Nikkei fell 1.24 percent to 18,552.61 points, Australia's S&P/ASX 200 index rose 0.04 percent to 5,931.70 points. South Korea's KOSPI jumped 0.24 percent to 2,128.91 points.
Shanghai composite index eased 0.5 percent to 3,273.83 points, while CSI300 index lost 0.2 percent to 3,509.83 points. Hong Kong’s Hang Seng added 0.9 percent to 24,313.50 points.
Commodities Recap
Crude oil prices rallied to fresh 1-month high as Saudi Arabia was reported to be lobbying OPEC and other producers to extend a production cut beyond the first half of 2017. International benchmark Brent crude was trading 0.6 percent up at $56.60 per barrel by 1011 GMT, having hit an early high of $56.61, its strongest since Mar. 7. U.S. West Texas Intermediate crude gained 0.6 percent to $53.69 a barrel, after rising as high as $53.71 earlier, its highest since Mar. 7.
Gold prices eased on profit taking after rising to a 5-month high earlier in the session, as investors shifted to safe-haven assets amid tensions rising over the United States' relations with North Korea and Russia. Spot gold edged down 0.1 percent to $1,273.37 per ounce by 1014 GMT after hitting its strongest since Nov. 10 at 1,279.65 earlier. U.S. gold futures rose 0.2 percent to $1,276.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.298 percent lower by 0.017 bps, while 5-year yield was 0.002 bps down at 1.830 percent.
The German government bunds traded flat as investors wait to watch the country’s consumer price inflation for the month of March, scheduled to be released on April 13. The yield on the benchmark 10-year bond hovered around 0.21 percent, the long-term 30-year bond yields traded flat at 0.96 percent and the yield on the short-term 2-year bond held at -0.84 percent.
The UK gilts continued to fall after reading the country’s unemployment report, for the month of February. The yield on the benchmark 10-year gilts rose 1 basis point to 1.05 percent, the super-long 30-year bond yields also jumped over 1 basis point to 1.66 percent while the yield on the short-term 3-year traded 1/2 basis point higher at 0.19 percent.
The Japanese government bonds firmed, with the benchmark 10-year yield edging down to a four-month low. The benchmark 10-year JGB yield fell 1.5 basis points to 0.020 percent, its lowest since Dec. 1, while 10-year JGB futures ended up 0.22 point at 150.90 after earlier touching 150.97, their highest since Nov. 15. In the superlong zone, the 20-year yield fell 2.5 basis points to 0.585 percent, its lowest since mid-January. The 30-year yield also shed 2.5 basis points to 0.810 percent after falling as low as 0.805 percent earlier, its deepest trough since late February.
The Australian bonds gained, with yields on 10-year government bonds at their lowest since Nov.10. The three-year futures contract added 2 ticks to 98.21, while the 10-year contract rose 3.5 ticks to 97.475.
The New Zealand bonds jumped following firmness in the U.S. Treasuries. The yield on the benchmark 10-year bond slumped 1 basis point to 3.08 percent at the time of closing, the yield on 7-year note remained also plunged 3-1/2 basis points to 2.69 percent and the yield on short-term 2-year note also traded 1/2 basis point lower at 2.09 percent.
