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America's Roundup: Dollar index steady, supported by higher U.S. yields, Wall Street tumbles, Gold prices dips, Oil pulls back from gains; OPEC says glut nearly gone-April 20th 2018

Market Roundup

• U.S.-China trade row threatens global confidence -IMF's Lagarde.

• U.S. Senate committee to vote on bill to protect Mueller next week.

• N. Korea seeks 'complete denuclearisation,' Moon says; U.S. vows pressure.

• U.S. w/e Initial Jobless Claims, 232k, 230k forecast 233k

• U.S. w/e Jobless Claims 4-Wk Avg, 231.25k, 233k previous

• U.S. w/e Continued Jobless Claims, 1.863 mln, 1.848 mln forecast, 1.871 mln previous (1.878 mln)

• U.S. Apr Philly Fed Business Index, 23.2, 20.1 forecast, 22.3 previous

• Trudeau says recognises NAFTA timeline, will stick up for Canada

• Canada adds 42,800 jobs in March -ADP

• BoE's Carney dampens expectations for May rate hike, sees "mixed" data

• OPEC, non-OPEC panel finds oil glut virtually eliminated

• Merkel urges compromise, Macron wants solidarity on euro zone reforms

Looking Ahead - Economic Data (GMT)

• 19 Apr 23:30 Japan Mar CPI, Core Nationwide y/y, 0.9% forecast, 1.0% previous

• 19 Apr 23:30 Japan Mar CPI, Overall Nationwide, 1.5% previous

Looking Ahead - Events, Other Releases (GMT)

• 04:00 Riksbank's Stefan Ingves and Per Jansson participate in the IMF and World Bank Spring Summit in Washington

• 09:30 Bank of England's Michael Saunders speaks at the Fraser of Allander Institute, University of Strathclyde in Glasgow, Scotland

• 11:30 Bundesbank's Jens Weidmann, Claudia Buch and Andreas Dombret at the Spring Meeting by IMF and World Bank in Washington, D.C.

• 13:40 Chicago Fed President Charles Evans speaks on current economic conditions and monetary policy before the Graaskamp Center Spring Board Conference in Chicago

• 15:00 Riksbank's Stefan Ingves participates in a panel discussion on regulations, guidelines and supervision for creating financial systems that can handle cyber attacks and cybercrises in Washington, D.C.

• 15:25 Bank of Canada's Carolyn A. Wilkins participates in panel discussion at IMF and Toronto Centre in Washington

• 16:45 G20 Finance Ministers hold news conference following their talks on the sidelines of the spring meeting of the IMF and World Bank

Currency Summaries

EUR/USD is likely to find support at 1.2300 levels and currently trading at 1.2349 levels. The pair has made session high at 1.2384 and hit lows at 1.2340 levels. The euro slipped lower against the U.S. dollar on Thursday as rise in long-term U.S. bond yields supported the dollar and pushed the single currency further back into its recent trading range. Given the scale of gains in the 10-year Treasury note yield, which climbed more than 5 basis points overnight for its biggest one-day surge since March 2, the dollar's strength was limited. The modest moves underlined investor caution and that a rally in the euro, which gained at the start of this year, has run out of steam. Investors are growing nervous that the euro zone economy's rebound is nearing the top and the European Central Bank may move more slowly to tighten monetary policy. Broad uncertainty stemming from U.S. President Donald Trump's trade and economic policies, as well as geopolitical events in the Middle East and elsewhere has meanwhile weighed on the dollar. The euro fell 0.3 percent to $1.2339 after earlier hitting $1.24. The dollar index, measuring the U.S. currency against a basket of currencies, traded flat at 89.644. The euro had weakened to a 14-year low the last time the yield spread was at the current width. But it has been relatively immune to the current yield spread widening. The spread has increased more than 30 basis points over the past three months, but the common currency has moved within a relatively narrow $1.2556-$1.2154 range.

GBP/USD is supported in the range of 1.4013 levels and currently trading at 1.4089 levels. It reached session high at 1.4249 and dropped to session low at 1.4078 levels. Britain's pound declined sharply against the dollar on Thursday after British retail sales recorded their biggest quarterly fall in a year during the three months to March after unusually cold weather kept shoppers at home. Sterling also weakened on the back of the comments from Bank of England Governor Mark Carney. British retail sales recorded their biggest quarterly fall in a year during the three months to March, after unusually cold and snowy weather kept shoppers at home. Retail sales volumes in March were 1.2 percent lower than the month before as a period of unseasonal snow and cold weather dubbed 'The Beast from the East' kept shoppers at home, a bigger fall than economists had expected in a poll. Bank of England Governor Mark Carney on Thursday acknowledged the recent mixed domestic economic readings, which reinforced the view the BOE would raise rates gradual over next few years. His comments knocked the pound to near two-week low against the dollar. Sterling was last down 0.85 percent at $1.4085.The pound, among the best-performing G10 currencies this year, rose to a fresh post-Brexit vote high above $1.43 this week but is now flat for the week after data showing slowing retail sales encouraged investors to cut their sterling bets.

USD/CAD is supported at 1.2585 levels and is trading at 1.2655 levels. It has made session high at 1.2676 and lows at 1.2592 levels. The Canadian dollar weakened against its U.S. counterpart on Thursday as the dollar bounced back amid improving appetite for riskier assets and upbeat U.S. economic data. Expectations that Western strikes on Syria last week will not escalate have also supported the greenback. On the data front, Canada added 42,800 jobs in March, led by hiring in the construction industry, according to a report from ADP released on Thursday. The new report, which is jointly developed with Moody's Analytics, is derived from ADP's payrolls data of about 40,000 companies. The price of oil, one of Canada's major exports, softened after having spiked to highs not seen since 2014. OPEC producers told  on Thursday the inventory overhang has largely disappeared, even as production in the United States increases.. The Canadian dollar was last trading 0.2 percent lower at C$1.2655 to the greenback. The currency traded in a range of C$1.25873 to C$1.2675.

USD/JPY is supported around 107.08 levels and currently trading at 107.45 levels. It peaked to hit session high at 107.47 and made session lows at 107.24 levels. The U.S. dollar strengthened against the yen on Thursday as dollar was boosted by higher U.S. bond yields and expectations of more rate increases from the Federal Reserve. Recent economic data suggested business activities overseas may have peaked. This has reduced the appeal of the euro, yen, pound and other currencies which have strengthened against the dollar since 2017 based on the view economies outside the United States had been faring better until recent weeks. The relatively optimistic backdrop in the United States should support the Fed to raise short-term rates at least twice more in 2018. The U.S. economy, while not firing on all cylinders, has remained on a steady growth path which has assured the Fed to stick with its current pace of rate increases. On the other hand, the dollar faces headwinds from the uncertainty stemming from U.S. President Donald Trump's trade and economic policies, as well as political events in the Middle East and elsewhere. An index that tracks the greenback versus the euro, yen, sterling and three other currencies rose 0.28 percent, to 89.877 after touching a one-week peak.

Equities Recap

Advertising group Publicis and industrial stocks led European shares on Thursday as strong results spurred them higher, while the main indexes stalled, showing signs of fatigue after a two-day rally took them to six-week highs.

UK's benchmark FTSE 100 closed by 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.01 percent, Germany's Dax ended down by 0.2 percent, France’s CAC finished the day up by 0.3 percent.

Wall Street's three major indexes declined on Thursday as tobacco stocks led a tumble in consumer staples and concerns about smartphone demand hurt the technology sector while rising bond yields and earnings helped financials rebound.

Dow Jones closed down by 0.33 percent, S&P 500 ended down by 0.57 percent, Nasdaq finished the day down by 0.78 percent.

Treasuries Recap

Yields on longer-dated maturities climbed modestly higher on Thursday after two weeks of rising less than shorter-dated bonds, retracing some of the yield curve's flattening.

The 10-year Treasury yield was up 5 basis points from its last close, to 2.917 percent. The 30-year Treasury yield was up 6.3 basis points from its last close, at 3.109 percent.

Commodities Recap

Gold prices dipped on Thursday, breaking a string of gains for four successive sessions, in response to a decline in global political tensions.

Spot gold lost 0.2 percent at $1,346.20 per ounce by 1:38 p.m. EDT (1738 GMT), while June U.S. gold futures settled down $4.70, or 0.4 percent, at $1,348.80 per ounce.

Oil prices hit highs not seen since 2014, but later gave back gains following a swift rally over the last week, built on the ongoing drawdowns in global supply and as Saudi Arabia looks to push prices higher.

U.S. West Texas Intermediate (WTI) crude futures were down 15 cents at $68.33 as of 1:27 p.m. EDT (1727 GMT), after earlier hitting $69.56, the highest since Nov. 28, 2014. WTI has gained nearly 8 percent in the last eight days of trading.

Brent crude futures were up 96 cents at $74.44. The global benchmark touched $74.74 a barrel, the highest since Nov. 27, 2014 - the day OPEC decided to pump as much as it could to defend market share.

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