Market Roundup
- EUR/USD 0.07%, USD/JPY 0.19%, GBP/USD -0.56%, EUR/GBP 0.61%
- DXY 0.08%, DAX 0.07%, FTSE 0.88%, Brent 1.15%, Gold 0.17%
- South Korea says discussing peace deal with N.Korea ahead of summit
- Strong China Q1 GDP growth supported by construction, manufacturing, hi-tech
- Inflation-busting pay hikes highlight German shift towards consumption
- Italy president summons senate speaker to break deadlock over new govt
- EZ Mar HICP Final MM, 1.0%, 1.0% forecast, 0.2% previous
- EZ Mar HICP Final YY, 1.3%, 1.4% forecast, 1.4% previous
- EZ Mar HICP ex F&E YY, 1.3%, 1.3% forecast, 1.3% previous
- May rate rise less certain after UK inflation cools to one-year low
- Great Britain Mar CPI YY, 2.5%, 2.7% forecast, 2.7% previous
- Great Britain Mar Core CPI YY, 2.3%, 2.5% forecast, 2.4% previous
- Great Britain Mar RPI YY, 3.3%, 3.6% forecast, 3.6% previous
- Great Britain Mar PPI Core Output YY NSA, 2.2%, 2.2% forecast, 2.4% previous, 2.5% revised
- Great Britain Mar PPI Core Output MM NSA, 0.1%, 0.2% forecast, 0.2% previous, 0.3% revised
Economic Data Ahead
- (1000 ET/1400 GMT) Bank of Canada will meet to announce its benchmark interest rate, where it is expected to hold interest rates at 1.25 percent.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending April 13.
- (1400 ET/1800 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
Key Events Ahead
- (1115 ET/1515 GMT) Bank of Canada Governor Stephen S. Poloz and Senior Deputy Governor Carolyn Wilkins will hold a press conference to discuss the Monetary Policy Report.
- (1515 ET/1915 GMT) Federal Reserve Bank of New York President William Dudley speaks on "The U.S. Economic Outlook and the Implications for Monetary Policy" -Bronx, New York
- (1615 ET/2015 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles participates in a discussion, "Navigating New Opportunities: Transatlantic Regulatory Reform"-Washington, D.C.
FX Beat
DXY: The dollar index gained as U.S. markets were buoyed by strong corporate earnings and easing trade war concerns, while investors awaited the Federal Open Market Committee’s (FOMC) members Dudley and Quarles deliver their speeches. The greenback against a basket of currencies trades 0.1 percent up at 89.55, having touched a low of 89.23 on Tuesday, its lowest since Mar. 27. FxWirePro's Hourly Dollar Strength Index stood at 69.42 (Bullish) by 1000 GMT.
EUR/USD: The euro consolidated within narrow ranges as inflation in Eurozone rose by less than previously estimated in March, as unprocessed food prices increased by less than previously thought. The economy's consumer price index rose by 1.3 percent in March, compared to the same period last year, down from the previous estimate of 1.4 percent. The European currency traded flat at 1.2366, having touched a high of 1.2413 on Tuesday, its highest since Mar. 28. FxWirePro's Hourly Euro Strength Index stood at 117.01 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.2421 (Mar. 28 High), a break above targets 1.2476 (Mar. 27 High). On the downside, support is seen at 1.2354 (5-DMA), a break below could drag it lower 1.2260 (Apr. 6 Low).
USD/JPY: The dollar rallied against the Japanese yen as Japan's exports rose less than expected in March due to a strong yen, raising some concern about the outlook for shipments on Washington's criticism of the nation's large trade surplus with the U.S. Moreover, ongoing peace talks between South and North Korea also receded fears and curbed the safe-haven bids. The major was trading 0.2 percent up at 107.22, having hit a high of 107.77 on Friday, its highest since Feb. 21. FxWirePro's Hourly Yen Strength Index stood at -4.34 (Neutral) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Fed's William Dudley and Quarles speech. Immediate resistance is located at 107.90 (Feb. 21 High), a break above targets 108.50. On the downside, support is seen at 106.77 (Apr. 6 Low), a break below could take it lower 106.26 (Mar. 29 Low).
GBP/USD: Sterling slumped to a 1-week low below the 1.4200 handle as British inflation unexpectedly cooled to a one-year low in March, raising doubts over expectations the Bank of England will raise interest rates in May. The economy's annual consumer price inflation fell to 2.5 percent from 2.7 percent in February, well below expectations to hold at 2.7 percent. The major traded 0.6 percent down at 1.4205, having hit a high of 1.4376 the day before, it’s highest since June 2016. FxWirePro's Hourly Sterling Strength Index stood at -107.43 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.4344, a break above could take it near 1.4380. On the downside, support is seen at 1.4129 (10-DMA), a break below targets 1.4078. Against the euro, the pound was trading 0.6 percent down at 87.07 pence, having hit a high of 86.20 pence the day before, it’s highest since May 2017.
USD/CHF: The Swiss franc declined to an over 3-month low as trade war concerns waned and firm U.S. economic data boosted the greenback. The major trades 0.2 percent up at 0.9680, having touched a high of 0.9698 earlier, it’s highest since Jan. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at 22.45 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9748 (Dec 29 High) and any break above will take the pair to next level till 0.9816 (Jan 11 High). The near-term support is around 0.9615 (5-DMA) and any close below that level will drag it till 0.9561 (21-DMA).
Equities Recap
European shares surged, supported by well-received company results, while the greenback rallied against a basket of currencies on easing trade war concerns.
The pan-European STOXX 600 index traded flat at 380.70 points, while the FTSEurofirst 300 index advanced 0.05 percent to 1,492.30 points.
Britain's FTSE 100 trades 0.8 percent up at 7,280.27 points, while mid-cap FTSE 250 gained 0.4 percent to 19,901.24 points.
Germany's DAX fell 0.05 percent at 12,580.18 points; France's CAC 40 trades 0.3 percent higher at 5,367.12 points.
Commodities Recap
Crude oil prices rose, bolstered by a reported decline in U.S. crude inventories and the risk of supply disruptions. International benchmark Brent crude was trading 0.6 percent up at $72.11 per barrel by 1029 GMT, having hit a high of $73.05 last week, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.8 percent up at $67.13 a barrel, after rising as high as $67.42 last week, its highest since Nov. 2014.
Gold prices declined after rising for three straight sessions as the dollar held its gains on the back of upbeat U.S. economic data. Spot gold was down 0.1 percent at $1,346.37 per ounce at 1033 GMT, having hit a high of $1,365.16 an ounce last week, its highest since Jan. 25. U.S. gold futures for June delivery fell 0.2 percent to $1,346.30 per ounce.
Treasuries Recap
The U.S. Treasuries slumped as investors wait to watch the Federal Open Market Committee’s (FOMC) members Dudley and Quarles deliver their speeches, later in the day. The yield on the benchmark 10-year Treasuries jumped 3 basis points to 2.84 percent, the super-long 30-year bond yields surged nearly 3-1/2 basis points to 3.03 percent and the yield on the short-term 2-year traded 2 basis points higher at 2.40 percent.
The UK gilts jumped during European session after the country’s consumer price inflation data for the month of March disappointed market participants. The yield on the benchmark 10-year gilts, slumped nearly 3 basis points to 1.41 percent, the super-long 30-year bond yields plunged close to 2 basis points to 1.80 percent and the yield on the short-term 2-year traded 3-1/2 basis points lower at 0.85 percent.
The New Zealand government bonds closed Wednesday’s session on a higher note as investors have largely shrugged-off the rise in global dairy prices at the overnight GlobalDairyTrade (GDT) price auction. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.83 percent, the yield on the long-term 20-year note slumped 2 basis points to 3.41 percent and the yield on short-term 2-year closed flat at 1.95 percent.
The Japanese government bonds gained as investors have largely shrugged-off the better-than-expected reading of the country’s trade balance data for the month of March, released late Tuesday. As of Wednesday, the yield on the benchmark 10-year JGBs, which moves inversely to its price, remained tad lower at 0.03 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.70 percent and the yield on short-term 2-year hovered around at -0.14 percent.
The Australian government bonds gained as investors moved into safe-haven buying following rising trade tensions between two world’s biggest economies. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 2 basis points to 2.744 percent, the yield on the long-term 30-year Note dipped 2-1/2 basis points to 3.327 percent and the yield on short-term 2-year also slumped nearly 2 basis points to 2.112 percent.
