Market Roundup
- China hammers U.S. goods with tariffs as 'sparks' of trade war fly
- China tariffs on U.S. ethanol to cut off imports in short-term
- Russian manufacturing growth in March capped by a drop in new orders - PMI
- Oil creeps up towards $70 on lower U.S. drilling, Iran sanctions concern
- Gold rises on renewed U.S.-China trade tensions
- Saudi Arabia seen cutting May crude prices to Asia: Survey
Economic Data Ahead
- (0930 ET/1330 GMT) The Markit will release Canada's Manufacturing PMI for the Month of March. The indicator stood at 55.6 in the prior month.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of March. The index is likely to show a final reading of 55.7 after posting similar gains in the previous month.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index eased to 60.0 in March from a revised 60.8 in February.
- (1000 ET/1400 GMT) The Commerce Department is likely to report that U.S. construction spending increased 0.6 percent in February after staying flat in the previous month.
Key Events Ahead
- (1800 ET/2200 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari's speech
FX Beat
DXY: The dollar index extended previous session losses as China imposed addtional tariff on U.S. products in response to U.S. duties on imports of aluminum and steel. The greenback against a basket of currencies trades 0.1 percent down at 89.91, having touched a high of 90.18 on Thursday, its highest since Mar. 21.
EUR/USD: The euro rose, extending previous session gains, amid lack of any fresh fundamental drivers and holiday-thinned trading conditions, with key markets from Germany and the UK closed for Easter Monday celebrations. The European currency traded 0.1 percent up at 1.2330, having touched a high of 1.2476 last week, its highest since Feb. 16. Immediate resistance is located at 1.2355 (5-DMA), a break above targets 1.2421 (Mar. 28 High). On the downside, support is seen at 1.2283 (Mar. 29 Low), a break below could drag it lower 1.2258 (Mar. 19 Low).
USD/JPY: The dollar steadied against the yen on hopes for a diplomatic breakthrough over North Korea’s nuclear program. However, China’s announcement to impose extra tariffs of up to 25 percent on 128 U.S. products in response to U.S. duties on imports of aluminium and steel limited gains in the major. The major was trading flat at 106.29, having hit a high of 107.01 on Wednesday, its highest since Mar. 13. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. construction spending and manufacturing PMI by both Markit and ISM. Immediate resistance is located at 106.64 (Mar. 21 High), a break above targets 107.05 (Mar. 9 High). On the downside, support is seen at 106.07 (21-DMA), a break below could take it lower 105.88 (10-DMA).
GBP/USD: Sterling extended gains, amid broad-based US dollar weakness and on growing expectations that the Bank of England could soon raise interest rates this year. The British pound rebounded after slumping to an over 1-week low last week on data showing the economy expanded by 1.8 percent between 2016 and 2017, slightly less than the 1.9 percent seen between 2015 and 2016. The major traded 0.2 percent up at 1.4061, having hit a low of 1.4011 last week, it’s lowest since Mar. 21. Immediate resistance is located at 1.4102 (5-DMA), a break above could take it near 1.4171 (Mar. 23 High). On the downside, support is seen at 1.3982 (Mar 20 Low), a break below targets 1.3931 (Feb. 20 Low). Against the euro, the pound was trading 0.1 percent up at 87.67 pence, having hit a low of 87.97 pence last week, it’s lowest since Mar 20.
USD/CHF: The Swiss franc rose, extending gains for the third consecutive session, as lingering concerns over a U.S.-China trade war supported risk-off market sentiment. The major trades 0.05 percent down at 0.9530, having touched a high of 0.9583 on Thursday, it’s highest since Jan. 23. On the higher side, near-term resistance is around 0.9600 and any break above will take the pair to next level till 0.9640 (Jan 22 High). The near-term support is around 0.9511 (10-DMA) and any close below that level will drag it till 0.9472 (21-DMA).
Equities Recap
European markets remained closed on account of Easter Monday holiday.
Commodities Recap
Crude oil prices rallied, boosted by a drop in U.S. drilling activity and on expectations that the United States could re-introduce sanctions against Iran. The U.S. drillers cut seven oil rigs in the week to March 29, getting the total count down to 797. International benchmark Brent crude was trading 0.7 percent up at $69.90 per barrel by 0850 GMT, having hit a low of $68.21 on Friday, its lowest since Mar. 21. U.S. West Texas Intermediate was trading 0.6 percent up at $65.30 a barrel, after rising as high as $65.33 earlier, its strongest since Mar. 27.
Gold prices rose as the dollar declined amid renewed concerns over a trade war after China imposed extra tariffs of up to 25 percent on 128 U.S. products in response to U.S. duties on imports of aluminium and steel. Spot gold rose 0.5 percent to $1,331.50 per ounce at 0905 GMT, after touching a low of $1,321.12 on Friday, its lowest since Mar. 21. U.S. gold futures rose 0.6 percent to $1,334.90 an ounce.
Treasuries Recap
The 10-year U.S. Treasury yield last stood at 2.760 percent, after having set a 7-week low of 2.739 percent on Thursday.
The 10-year Japanese Treasury yield stood at 0.046 percent, down by 0.004 bps.
