Market Roundup
- EUR/USD 0.02%, USD/JPY 0.26%, GBP/USD 0.21%, EUR/GBP -0.19%
- DXY -0.01%, DAX 1.11%, FTSE 0.53%, Brent 1.25%, Gold -0.06%
- China's Xi renews pledges to open economy, cut tariffs this year
- Chinese investment into U.S. slumps in 2017 on policy changes - report
- Dallas Fed's Kaplan is hopeful rhetoric in U.S.-China trade dispute will de-escalate
- Fed has to be gradual, patient in raising rates- Dallas Fed’s Kaplan
- Normalisation of ECB policy should start now - Nowotny
- Trade war could have negative impact on exchange rates - ECB's Nowotny
- Bank of England mustn't dally over next rate hike - McCafferty
- Russian rouble narrows losses, falls by more than 2 pct
Economic Data Ahead
- (0815 ET/1215 GMT) Canadian Mortgage and Housing Corp will report housing starts for the month of March. The indicator is expected to rise at a seasonally adjusted annualized rate of 219,000 after increasing 229,000 in the previous month.
- (0830 ET/1230 GMT) The U.S. producer price index is likely to have increased 0.1 percent in March, while in the 12 months through the same period, it is expected to have advanced 2.9 percent. PPI excluding food and energy probably edged up 0.2 percent after posting similar gains in February.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that building permits rose 1.3 percent in February, after rising 5.6 percent in January.
- (1000 ET/1400 GMT) The U.S. Census Bureau is likely to report that wholesale inventories rose 0.9 percent in February after posting a gain of 1.1 percent in the prior month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- (0900 ET/1300 GMT) Governor of Norges Bank Oystein Olsen speaks to Foreign Embassy Representatives-Oslo
- (1130 ET/1530 GMT) U.S. Treasury auctions $45 bn 4-week bills (size cut by $10 bn)
- (1300 ET/1700 GMT) U.S. Treasury auctions $30 bn 3-year notes
- (1430 ET/1830 GMT) U.S. FedTrade 15-year Fannie Mae / Freddie Mac (max $195 mn)
- (1830 ET/2230 GMT) Atlanta Fed President Raphael Bostic speaks about fair housing in a lecture at his alma mater Harvard University.
FX Beat
DXY: The dollar index steadied after falling to a near 2-week low earlier in the day on Federal Reserve Bank of Dallas President Robert Steven Kaplan’s comments, citing that Fed has to be gradual and patient in raising rates. The greenback against a basket of currencies trades 0.05 percent up at 89.86, having touched a high of 90.60 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at -46.87 (Neutral) by 1000 GMT.
EUR/USD: The euro rallied to a fresh 1-week peak after data showed French industrial production rose 1.2 percent in February from the previous month, as the exceptionally cold weather during February had led to higher production of electricity. The European currency traded 0.05 percent up at 1.2326, having touched a low of 1.2215 on Friday, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at -20.27 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2345 (Apr. 2 High), a break above targets 1.2388 (Mar. 22 High). On the downside, support is seen at 1.2277 (5-DMA), a break below could drag it lower 1.2218 (Apr. 5 Low).
USD/JPY: The dollar rose, halting its two-day losing streak as Chinese President Xi Jinping refrained from increasing the tension between Washington and Beijing, and appeared to give clear backing for open economies. However, concerns that U.S.-Russia relations could worsen over the Syria issue undermined the bid tone around the pair. The major was trading 0.3 percent up at 107.03, having hit a high of 107.49 on Thursday, its highest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at -115.05 (Highly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. producer price index, wholesale inventories and Fed official speeches. Immediate resistance is located at 107.46 (Apr. 6 High), a break above targets 107.90 (Feb. 21 High). On the downside, support is seen at 106.51 (10-DMA), a break below could take it lower 106.22 (2-DMA).
GBP/USD: Sterling surged to a near 2-week peak after Bank of England policymaker Ian McCafferty said that the central bank should not delay in raising interest rates after a recent strong pick-up in the world economy. The BoE raised rates for the first time in more than a decade in November and recent series of strong data has cemented the expectations for a second rate increase in May. The major traded 0.2 percent up at 1.4157, having hit a high of 1.4179 earlier, it’s highest since Mar. 28. FxWirePro's Hourly Sterling Strength Index stood at 106.95 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.4200 (Mar. 28 High), a break above could take it near 1.4244 (Mar. 26 High). On the downside, support is seen at 1.4070 (5-DMA), a break below targets 1.4012 (Mar 30 Low). Against the euro, the pound was trading 0.2 percent up at 87.00 pence, having hit a high of 86.92 pence earlier, it’s highest since Mar 22.
USD/CHF: The Swiss franc edged down after rising to a 1-week high earlier in the day, as investors’ risk appetite improved after Chinese President Xi Jinping's promise to cut import tariffs. The major trades 0.05 percent up at 0.9561, having touched a high of 0.9649 on Friday, it’s highest since Jan. 18. FxWirePro's Hourly Swiss Franc Strength Index stood at -68.69 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9684 (Jan 15 High) and any break above will take the pair to next level till 0.9748 (Dec 29 High). The near-term support is around 0.9526 (21-DMA) and any close below that level will drag it till 0.9500.
Equities Recap
European shares advanced in early deals, boosted by gains among automakers, while the greenback steadied after Chinese President Xi Jinping promised a considerable reduction in import tariffs this year.
The pan-European STOXX 600 index surged 0.7 percent to 377.95 points, while the FTSEurofirst 300 index rallied 0.6 percent to 1,481.34 points.
Britain's FTSE 100 trades 0.5 percent up at 7,227.45 points, while mid-cap FTSE 250 gained 0.6 percent to 19,595.42 points.
Germany's DAX rose 1.1 percent at 12,397.80 points; France's CAC 40 trades 0.7 percent higher at 5,301.07 points.
Commodities Recap
Crude oil prices rose by more than 1 percent, extending previous session gains, on hopes a trade dispute between the United States and China may be resolved without greater damage to the global economy. International benchmark Brent crude was trading 1.4 percent up at $69.47 per barrel by 0952 GMT, having hit a low of $66.86 on Wednesday, its lowest since Mar. 20. U.S. West Texas Intermediate was trading 1.5 percent up at $64.19 a barrel, after falling as low as $61.84 on Friday, its weakest since Mar. 19.
Gold prices slumped after Chinese President Xi Jinping promised to lower import tariffs on certain products, helping ease fears over an escalating trade row with the United States. Spot gold was down 0.1 percent at $1,335.00 an ounce as of 0959 GMT, after rising to a high of $1,338.00 earlier, its highest since Apr. 4. U.S. gold futures dropped 0.2 percent to $1,337.80 an ounce.
Treasuries Recap
The U.S. Treasuries traded tad lower as investors wait to watch the short-term 3-year note auction and the producer price index (PPI) data, scheduled to be released today 10 by 17:00GMT and 12:30GMT respectively. The yield on the benchmark 10-year Treasuries rose nearly 1 basis point to 2.79 percent, the super-long 30-year bond yields remained also climbed nearly 1 basis point to 3.02 percent and the yield on the short-term 2-year hovered around 3.02 percent.
The UK gilts nose-dived during European session as investors wait to watch the country’s manufacturing production for the month of February, scheduled to be released on April 11 by 08:30GMT. The yield on the benchmark 10-year gilts, rose 1-1/2 basis points to 1.42 percent, the super-long 30-year bond yields jumped nearly 2-1/2 basis points to 1.80 percent and the yield on the short-term 2-year traded nearly 2 basis points higher at 0.89 percent.
The German bunds continued to fall as investors wait to watch the country’s 30-year auction, due to be held on April 11 and the European Central Bank (ECB) President Mario Draghi’s speech, scheduled to be released on the same day by 11:00GMT. The German 10-year bond yields, which move inversely to its price, slipped 1 basis point to 0.49 percent, the yield on 30-year note also fell nearly 1 basis point to 1.16 percent and the yield on short-term 2-year traded tad lower at -0.56 percent.
The Japanese government bonds traded narrowly higher as investors wait to watch the country’s 30-year auction, scheduled to be held on April 12 by 03:45GMT. The yield on the benchmark 10-year Treasury note, 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 0.73 percent and the yield on short-term 2-year also edged slightly lower at -0.14 percent.
The Australian government bonds slumped following weakness in the U.S. Treasuries as investors’ risk appetite improved on optimism in Wall Street after the United States President Donald Trump tried to appease China on trade worries. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, rose nearly 3 basis points to 2.695 percent, the yield on the long-term 30-year note climbed 2-1/2 basis points to 3.290 percent and the yield on short-term 2-year also surged nearly 2 basis points to 2.053 percent.
