Market Roundup
- EUR/USD -0.1%, USD/JPY -0.2%, EUR/JPY -0.1%, DXY -0.1%
- DAX -0.2%, FTSE -0.5%, Brent -0.3%, Copper +0.3%, Gold +0.2%
- EUR/JPY falls to 4-month low at 116.88, recovers to 117.30s
- Yen gains as N. Korea, Syria spark geopolitical jitters
- EZ Feb Ind production -0.3% m/m, 1.2% y/y vs previous 0.3%/0.2% revised 0.1%/2.0% forecast
- Germany Apr ZEW Economic sentiment 19.5 vs previous 12.8. 14.0 forecast
- Germany Apr ZEW Current conditions 80.1 vs previous 77.3. 77.7 forecast
- UK Mar CPI +0.4% m/m, +2.3% y/y vs previous 0.7%/2.3%. 0.3%/2.3% forecast
- UK Mar PPI core output +0.3% m/m, +2/5% vs previous 0.0%/2.4%. 0.2%/2.5% forecast
- UK Mar BRC Retail sales -1.0% y/y vs previous -0.4%
- Swedish Mar CPIF 1.5% y/y vs +1.7% y/y forecast
- German GDP growth seen topping estimates in 2017, 2018 - sources
- Explosion rocks southeastern Turkish city of Diyarbakir - witness
- Melenchon ahead of Fillon in new Ifop first round French election poll
Economic Data Ahead
- (0900 ET/1300 GMT) Mexico will release its industrial output data for the month of February. The economy's industrial production is expected to fall 0.1 percent after rising by 0.1 percent in January.
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of February. The report is expected to show job openings rose to 5.655 million from 5.626 million in January.
- (1300 ET/1700 GMT) The Federal Reserve district banks are scheduled to release its "2016 Small Business Credit Survey: Report on Employer Firms".
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1850 ET/2350 GMT) Japan's machinery orders are likely to have increased 2.7 percent for the month of February after posting a decline of 3.2 percent in January.
Key Events Ahead
- (1245 ET/1645 GMT) FedTrade 30-year Fannie Mae/Freddie Mac securities (max $1.275 bn)
- (1345 ET/1745 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari will speak.
FX Beat
DXY: The dollar slumped versus the yen as investors turned to the safe-haven assets on heightened tensions in the Korean peninsula and the Middle East following U.S. missile strikes on Syria. The dollar against a basket of currencies traded 0.1 percent lower at 100.84, hovering away from a high of 101.34 touched on Monday, its highest since Mar. 15. FxWirePro's Hourly Dollar Strength Index stood at 55.68 (Bullish) by 1000 GMT.
EUR/USD: The euro rose above the 1.0600 handle after data showed investor sentiment in the euro zone improved more than expected in April. The European currency traded 0.2 percent up at 1.0613, having touched a low of 1.0596 in the previous session, its lowest since Mar. 9. FxWirePro's Hourly Euro Strength Index stood at -34.90 (Neutral) 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 tumbled against the Japanese yen as concerns mounting about possible U.S. military strikes in the Middle East and the Korean Peninsula strengthened safe-haven assets. The major traded 0.3 percent down at 110.60, hovering towards a low of 110.09 touched on Friday, its lowest since Nov. 18. FxWirePro's Hourly Yen Strength Index stood at 74.91 (Bullish) by 1000 GMT. On the higher side, any break above 111.72 (21- day EMA) and will take the pair till 112.49 (55- day EMA)/113.44. The near term support is around 110 and any break below will drag it till 108.65.
GBP/USD: Sterling rose, extending previous session gains after data showed UK inflation remained steady in March, putting no further pressure on the Bank of England to hike interest rates. The major trades 0.1 percent up at 1.2426, retreating from a low of 1.2365 touched on Friday, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at -44.31 (Neutral) by 1000 GMT. The pair broke support of 1.23750 and this confirms minor weakness, a decline till 1.23200 (Mar 17 low)/1.2260 (61.8% retracement of 1.19860 and 1.27060)/ 1.2200. On the higher side, minor bullishness can be seen only above 1.24800 and any break above targets 1.2520/1.2580/1.2616. The short term bearish invalidation is only above 1.2706. Against the euro, the pound traded 0.1 percent down at 85.41 pence, having hit a high of 85.16 earlier in the day.
USD/CHF: The Swiss franc gained, drifting away from a 4-week low touched in the previous session as investors considered a spectrum of risks including possible U.S. action in Syria and North Korea, which boosted safe-haven assets. The major traded 0.1 percent down at 1.0071, pulling away from a high of 1.0107 hit on Monday, its strongest since Mar. 14. FxWirePro's Hourly Swiss Franc Strength Index stood at 83.21 (Slightly Bullish) by 1000 GMT. On the lower side, any break below 1.0600 (trend line joining 0.9834 and 1.00144) will drag the pair down till 1.000/0.9960/0.9934 (200- day MA). 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 it till 1.03450.
AUD/USD: The Australian dollar extended gains above the 0.7500 handle after the economy posted strong NAB Business Conditions data, recording its highest level since the global financial crisis. The Aussie trades up at 0.7505, having hit a low of 0.7475 in the day before, it’s lowest since Jan. 17. FxWirePro's Hourly Aussie Strength Index stood at -147.99 (Highly Bearish) by 1000 GMT. On the lower side, the next immediate support stands at 0.74910 (Mar 9 low) and any break below will drag the pair down till 0.7450. The major resistance is around 0.7554 (200- day MA) and a break above will take it till 0.7605 (21- day EMA) /07680/0.7745.
Equities Recap
European shares edged up in early trade, boosted by a rise in oil and luxury stocks, while the dollar fell against the yen as concerns mounted about possible U.S. military strikes in the Middle East and the Korean Peninsula.
The pan-European STOXX 600 index advanced 0.1 percent to 381.69 points, while the FTSEurofirst 300 index gained 0.14 percent to 1,503.33 points.
Britain's FTSE 100 trades 0.64 percent up at 7,395.41 points, while mid-cap FTSE 250 rose 0.53 percent to 19,366.95 points.
Germany's DAX edged down 0.10 percent at 12,188.75 points; France's CAC 40 trades 0.09 percent higher at 5,111.98 points.
Tokyo's Nikkei fell 0.27 percent to 18,747.87 points, Australia's S&P/ASX 200 index rose 0.38 percent to 5,935.30 points. South Korea's KOSPI declined 0.44 percent to 2,123.85 points.
Shanghai composite index gained 0.6 percent to 3,288.97 points, while CSI300 index climbed 0.3 percent to 3,517.33 points. Hong Kong’s Hang Seng shed 0.7 percent to 24,088.46 points.
Commodities Recap
Crude oil eased from a five-week high as increasing U.S. shale oil production offset concerns over geopolitical tensions in the Middle East. International benchmark Brent crude was trading 0.3 percent down at $55.79 per barrel by 1030 GMT, having hit an early high of $56.12, its strongest since Mar. 7. U.S. West Texas Intermediate crude fell 0.3 percent to $52.97 a barrel, after rising as high as $53.21 earlier, its highest since Mar. 7.
Gold prices gained as political and security tensions rose over North Korea, the Middle East, and the looming French election boosted safe-assets. Spot gold rose 0.2 percent to $1,257.56 per ounce by 1033 GMT, having touched a high of $1,270.55 on Friday, its highest since Nov. 10. U.S. gold futures rose 0.5 percent to $1,259.50.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.340 percent lower by 0.002 bps, while 5-year yield was 0.03 bps down at 1.871 percent.
The German 10-year bund yields hit lowest since February this year from mounting political uncertainty ahead of a number of crucial elections in the euro zone. The yield on the benchmark 10-year bond fell 1 basis point to 0.20 percent, the long-term 30-year bond yields dipped 1-1/2 basis points to 0.97 percent and the yield on the short-term 3-year bond traded 1 basis point lower at -0.77 percent.
The UK gilts declined after reading a stable consumer price inflation (CPI) during the month of March. Also, investors remain keen to watch the country’s February unemployment rate data, scheduled to be released on April 12. The yield on the benchmark 10-year gilts climbed 1 basis point to 1.09 percent, the super-long 30-year bond yields jumped 2 basis points to 1.71 percent while the yield on the short-term 3-year traded 1 basis point higher at 0.23 percent.
The Australian 10-year bond yields plunged to near 5-month low tracking weakness in the U.S. counterparts, following ongoing political tension and overseas uncertainties. The yield on the benchmark 10-year Treasury note slumped 6 basis points to 2.54 percent, the yield on 15-year note plunged nearly 6 basis points to 2.94 percent and the yield on short-term 2-year traded nearly 3 basis points lower at 1.64 percent.
The New Zealand bonds jumped at the time of closing, is the response to a rise in global demand for safe-haven assets, following overseas uncertainties and political tension. The yield on the benchmark 10-year bond slumped 4 basis points to 3.08 percent, the yield on 7-year note remained also plunged 3-1/2 basis points to 2.72 percent and the yield on short-term 2-year note also traded 4-1/2 basis points lower at 2.08 percent.
