Market Roundup
- EUR/USD -0.05%, USD/JPY +0.4%, GBP/USD -0.05%, AUD/USD -0.5%
- DXY +0.1%, DAX +0.3%, FTSE flat, Copper +1.3%, Gold -0.6%
- EUR/USD hits three-week high at 107.37
- Sterling holds close to 6-month high on prospect of snap British election
- Aussie lower on falling iron ore prices. AUD/USD hits 0.7505 low
- UK's May says early election averts clash with end of Brexit talks
- EZ Mar Inflation 1.5% y/y vs 1.5% forecast
- Eurozone Feb unadjusted trade surplus 17.8 bln euros vs previous -0.6bln. 16.2bln forecast
- ECB Hansson: Need more incoming data before considering concrete policy action
- Germany defends surplus, urges ECB to tighten policy
- South Africa's finance minister Gigaba rules out nationalization of mines, banks
- Macron, Le Pen cling on to first round lead in French election race - Le Monde/Cevipof poll
Economic Data Ahead
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending April 14.
- (1400 ET/1800 GMT) The Fed issues its Beige Book, a summary of anecdotes on the health of the economy.
- (1845 ET/2245 GMT) The Statistics New Zealand is likely to report that consumer price index rose at an annualized rate of 2 percent in the first quarter, while on a quarterly basis it is expected to increase 0.8 percent, after rising 0.4 percent in the previous quarter.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports merchandise trade balance for the month of March. The economy's trade surplus is expected to narrow to 575.8 billion yen from 813.4 billion yen in February.
- (1950 ET/2350 GMT) Japan's Ministry of Finance will report foreign bond investment for the week ending April 14.
- (1950 ET/2350 GMT) Japan's Ministry of Finance reports foreign investment in domestic stocks for the week ending April 14.
Key Events Ahead
- (1045 ET/1445 GMT) FedTrade operation 30-year Fannie Mae/Freddie Mac (max $1.450 bn)
- (1045 ET/1445 GMT) FedTrade operation 30-year Ginnie Mae (max $1.200 bn)
- (1230 ET/1630 GMT) Federal Reserve Bank of Boston President Eric Rosengren is scheduled to give a luncheon speech before the Levy Economics Institute of Bard College 26th Annual Minsky Conference, in Annandale-on-Hudson, New York.
- (1400 ET/1800 GMT) The Bretton Woods Committee will conduct its 34th Annual Meeting at the IMF headquarters in Washington.
FX Beat
DXY: The dollar rebounded from recent lows versus its major peers, amid mild risk on market sentiment. The dollar against a basket of currencies traded 0.1 percent up at 99.61, having hit a low of 99.47 on Tuesday, its lowest since Mar. 28. FxWirePro's Hourly Dollar Strength Index stood at -67.15 (Bearish) by 1100 GMT.
EUR/USD: The euro edged down after rising to a fresh 3-week high, despite the final inflation figures showing consumer prices rose at an annualized 1.5 percent, in line with the preliminary readings, while on a monthly basis, prices grew 0.8 percent. Separate data showed the continent's trade surplus came in at €17.8 billion in February, beating estimates and reversing January’s €0.6 billion deficit. The European currency traded 0.05 percent down at 1.0724, retreating from a high of 1.0736 touched earlier, its highest since Mar. 30. FxWirePro's Hourly Euro Strength Index stood at 82.12 (Slightly Bullish) by 1000 GMT. On the lower side, major support is around 1.0665 (21- day EMA) and any break below will drag it till 1.0600/1.05694 (Apr 10 low)/1.05250. The near term resistance is around 1.0773 (61.8% retracement of 1.0905 and 1.05694) and any break above will take it till 1.0800/1.08298.
USD/JPY: The dollar rose, reversing most of its previous session losses, amid mild positive sentiment surrounding European equity markets. However, the recovery appears to be fragile as escalating tensions over North Korea and upcoming French and UK elections boosted investor demand for the safe-haven asset. The major traded 0.4 percent up at 108.88, having touched a low of 108.13 earlier in the week, its lowest since Nov. 15. FxWirePro's Hourly Yen Strength Index stood at -127.15 (Highly Bearish) by 1000 GMT. On the higher side, any break above 109.25 (7- day MA) and break above will take the pair till 109.85 (daily Tenken-Sen)/110.64 (21- day EMA). The near term support is around 108 and any break below will drag it till 106.32.
GBP/USD: Sterling eased after rising to a six-and-a-half month high against the dollar in the previous session, in the wake of persisting broad-based U.S. dollar recovery from three-week troughs. However, the major found some support as latest comments from Britain PM Theresa May on the upcoming general elections continued to underpin the sentiment around the British pound. Sterling trades 0.04 percent down at 1.2840, having hit a high of 1.2901 on Tuesday, its highest since Oct. 3. FxWirePro's Hourly Sterling Strength Index stood at 110.08 (Highly Bullish) by 1000 GMT. On the lower side, near term support is around 1.2700 (23.6% retracement of 1.21325 and 1.29018) and any break below will drag the pair down till 1.2630 (200 –day MA)/1.2490 (100- day EMA). Any break above the high made yesterday will take the pair till 1.3000. Against the euro, the pound traded flat at 83.54 pence, having hit a high of 82.99 in the previous session, its strongest since July 22.
USD/CHF: The Swiss franc declined after rising to a fresh 3-week high, as the greenback rebounded from recent lows. The major traded 0.03 percent up at 0.9962, hovering away from a low of 0.9953 hit earlier, its weakest since Mar. 30. FxWirePro's Hourly Swiss Franc Strength Index stood at 83.17 (Slightly Bullish) by 1000 GMT. The minor resistances are at 1.0027 (55- day EMA) /1.0060/1.0120 and any break above will take the pair till 1.03435. The near term support is around 0.9940 (200- day MA) and any break below will drag it till 0.98600/0.9800.
AUD/USD: The Australian dollar tumbled, extending losses for the second consecutive day as cautious RBA meeting minutes coupled with a slump in iron ore prices continued to weigh on the major. The Aussie trades 0.4 percent lower at 0.7524, having hit a peak of 0.7610 on Monday, it’s highest since Apr. 4. FxWirePro's Hourly Aussie Strength Index stood at -73.51 (Bearish) by 1000 GMT. On the lower side, any break below 0.7450 confirms minor weakness, a decline till 0.7380/0.7325 likely. The major resistance is around 0.7600 and a break above will take the pair till 07680/0.7745.
Equities Recap
European shares retreated from recent lows, following a rebound in banking stocks and some positive first-quarter results, while sterling traded near 6-month high following Tuesday's surprise news of an early general election for June 8.
The pan-European STOXX 600 index rose 0.38 percent to 377.80 points, while the FTSEurofirst 300 index advanced 0.3 percent to 1,483.25 points.
Britain's FTSE 100 trades 0.01 percent down at 7,145.45 points, while mid-cap FTSE 250 rallied 0.9 percent to 19,486.19 points.
Germany's DAX rose 0.3 percent at 12,035.10 points; France's CAC 40 trades 0.29 percent higher at 5,004.45 points.
Tokyo's Nikkei rose 0.07 percent to 18,432.20 points, Australia's S&P/ASX 200 index fell 0.54 percent to 5,805.40 points. South Korea's KOSPI lost 0.47 percent to 2,138.40 points.
Shanghai composite index eased 0.8 percent to 3,170.69 points, while CSI300 index plunged 0.5 percent to 3,445.88 points. Hong Kong’s Hang Seng shed 0.4 percent to 23,825.88 points.
Commodities Recap
Crude oil prices steadied after tumbling to an over 1-week low in the previous session, as OPEC said it was committed to draw down a global supply overhang that has weighed on markets since 2014. International benchmark Brent crude was trading 0.5 percent up at $55.06 per barrel by 0920 GMT, having hit a low of $54.59 the day before, its weakest since Apr. 6. U.S. West Texas Intermediate rose 0.3 percent to $52.51 a barrel, after declining as low as $52.07 on Tuesday, its lowest since Apr. 7.
Gold prices declined on mild profit-taking, however, geopolitical concerns about North Korea and cautious tone ahead of the French presidential election supported the safe-haven asset. Spot gold eased 0.5 percent to $1,282.30 per ounce as of 0929 GMT, after advancing to its highest since early November at $1,295.38 on Monday. U.S. gold futures were 0.6 percent lower at $1,288.80.
Treasuries Recap
The U.S. Treasuries slumped ahead of the Federal Open Market Committee (FOMC) member Eric Rosengren’s speech, scheduled to be held later in the day. The yield on the benchmark 10-year Treasury jumped 3 basis points to 2.87 percent, the super-long 30-year bond yields also climbed 3 basis points to 2.87 percent and the yield on short-term 2-year note traded nearly 2 basis points higher at 1.18 percent.
The UK gilts plunged as investors wait to watch the country’s retail sales during the month of March, scheduled to be released on April 21. Further, Prime Minister Theresa May said that a snap election is needed for Brexit 'stability'. The yield on the benchmark 10-year gilts, jumped nearly 3-1/2 basis points to 1.04 percent, the super-long 30-year bond yields climbed 3 basis points to 1.64 percent while the yield on the short-term 2-year traded nearly 4-1/2 basis points higher at 0.13 percent.
The German bunds traded higher after reading the Eurozone’s March steady consumer price inflation (CPI) data. Also, investors are eyeing the country’s manufacturing PMI for the month of April, scheduled to be released on April 21 for further direction in the debt market. The yield on the benchmark 10-year bond, rose nearly 1 basis point to 0.18 percent, the long-term 30-year bond yields also climbed nearly 1 basis point to 0.90 percent and the yield on short-term 2-year bond also jumped nearly 3 basis points to -0.82 percent.
The 10-year Japanese government bond yields touched 5-month low as investors poured into safe-haven instruments on growing speculation about a global reflation trade amid the United States President Donald Trump administration’s ability to push through its pro-business reforms as well as geopolitical tensions related to North Korea. The benchmark 10-year bond yield, hovered around 0.01 percent, the long-term 30-year bond yields fell nearly 1 basis point to 0.76 percent and the yield on the short-term 2-year note traded 1 basis point lower at -0.22 percent.
The New Zealand bonds modestly gained Wednesday as investors are curiously eyeing the country’s consumer price inflation (CPI) for the first quarter of this year, scheduled to be released on April 20. The yield on the benchmark 10-year bond, which moves inversely to its price, fell 1 basis point to 2.93 percent, the yield on 7-year note slipped 1/2 basis point to 2.64 percent and the yield on short-term 2-year note slumped 2-1/2 basis points to 2.12 percent.
The Australian 10-year government bond yields dived to over 5-month low on rising global tensions and geopolitical uncertainties amid losses in riskier assets. The yield on the benchmark 10-year Treasury note, plunged 4-1/2 basis points to 2.45 percent, the yield on 15-year note also slumped 4-1/2 basis points to 2.85 percent and the yield on short-term 2-year traded nearly 4 basis points lower at 1.60 percent.
