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America's Roundup: Dollar jumps as U.S. 10-year bond yields approach 3 percent, Wall Street little changed, Gold slips, Oil settles higher,fears of Iran sanctions end early slide-April 24th, 2018

Market Roundup

• U.S. Mar Existing Home Sales, 5.60 mln, 5.54M forecast mln, 5.54M previous mln.

• U.S. Mar Existing Home Sales % Chg, 1.1%, 0.2% forecast, 3.0% previous.

• U.S. Apr Markit Comp Flash PMI, 54.8, 54.2 previous.

• U.S. Apr Markit Mfg PMI Flash, 56.5, 55.1 forecast, 55.6 previous.

• U.S. Apr Markit Svsc PMI Flash, 54.4, 54.0 forecast, 54.0 previous.

• CA Feb Wholesale Trade MM, -0.8%, 0.6% forecast, -1.40% previous.

• Trump's revenge: U.S. oil floods Europe, hurting OPEC and Russia.

• U.S. allies press Trump to keep Iran nuclear deal alive .

• More Democrats back Pompeo for U.S. State Dept, confirmation likely.

• Britain hails new optimism about Brexit deal for financial services.

• PM May suffers another defeat in Britain's upper house over EU rights.

• ECB's government debt pile shrinks for first time as debt matures.

• Euro zone debt, deficit drop in 2017 as economy grows.

Looking Ahead - Economic Data (GMT)

• 12:30 Australia Q1 CPI, 0.5% q/q, 2.0% y/y forecast; 0.6%, 1.9% previous

• 12:30 Australia Q1 RBA Weighted Median CPI, 0.5% q/q, 1.9% y/y forecast; 0.4%, 2.0% previous

• 12:30 Australia Q1 RBA Trimmed Mean CPI, 0.5% q/q, 1.8% y/y forecast; 0.4%, 1.8% previous

Looking Ahead - Events, Other Releases (GMT)

• 24 Apr N/A European Commission's Valdis Dombrovskis speaks on financial stability and the financial services industry ahead of Brexit in London

• 24 Apr 08:20 Bank of England's Andrew Hauser participates in a panel discussion at the SWIFT Business Forum in London

• 24 Apr 10:35 Norges Bank's Jon Nicolaisen participates in a panel debate at "City week 2018" hosted by The international 

Currency Summaries

EUR/USD is likely to find support at 1.2183 levels and currently trading at 1.2206 levels. The pair has made session high at 1.2245 and hit lows at 1.2200 levels. Euro slipped lower against the dollar on Monday as rise in U.S. Treasury yields to 3 percent supported the greenback, while a mixed picture from euro zone business surveys failed to help the single currency at the start of a busy week. The 10-year yield hit its highest in over four years at 2.998 percent, driven by worries about the growing supply of government debt and accelerating inflation as oil and commodity prices climb. But although traders got close, the 3 percent barrier continued to hold late into Monday's session. The strong dollar also reflected an improved outlook on trade. U.S. Treasury Secretary Steven Mnuchin said on Saturday he may travel to China, a move that could ease tensions between the world's two largest economies. Against a basket of currencies the dollar index rose 0.7 percent to 90.960, its highest level since Jan. 18.The euro fell by 0.7 percent to a two-month low of $1.2200, not helped by a survey showing business activity in April stabilizing across the euro zone. The euro had enjoyed a strong rally until February before finding itself stuck in a trading range with the dollar after the European Central Bank cautioned investors expecting it to raise rates sooner than expected. The ECB holds its monetary policy meeting on Thursday.

GBP/USD is supported in the range of 1.3380 levels and currently trading at 1.3942 levels. It reached session high at 1.3977 and dropped to session low at 1.3922 levels. The British declined to hit two-week low against the dollar on Monday as investors questioned whether the Bank of England would raise interest rates in May following weaker-than-expected economic data and cautious comments from governor Mark Carney. The pound has been one of the best performing major currencies in 2018 and last week surged to its highest level since the Brexit referendum in June 2016. But weaker-than-expected wage growth and inflation, and comments by Carney that the data was "mixed" hit the currency hard, sending it down almost 1.7 percent for the week as investors rushed to price in the possibility the BoE could delay raising rates until later in the year. Analysts on Monday said they would watch gross domestic product figures due later in the week for signs of how the economy was holding up and whether it pointed to a BoE ready to hike rates. The pound last traded down 0.48 percent at $1.3997, as broad dollar strength kept the pound under pressure. Against the euro, the pound recovered and rose 0.3 percent to 87.515 pence.

USD/CAD is supported at 1.2748 levels and is trading at 1.2846 levels. It has made session high at 1.2854 and lows at 1.2772 levels. The Canadian dollar fell to a nearly 3-week low against its broadly firmer U.S. counterpart on Monday, pressured by weaker-than-expected domestic data and dovish comments over the weekend from Bank of Canada Governor Stephen Poloz. Poloz said he expects the inflation rate to be above 2 percent in 2018, but he is comfortable with that as long as the long-term trend is steady, according to media reports published on Sunday. Data on Friday showed that Canada's annual inflation rate in March edged up to 2.3 percent, the highest in more than three years. Investors have been weighing whether higher inflation will prompt the central bank to raise interest rates further over the coming months. The U.S. dollar rallied to a seven-week high after a rise in the 10-year U.S. Treasury yield to within a whisker of the psychologically important 3-percent level prompted buying of the greenback. The price of oil, one of Canada's major exports, turned positive in volatile trade. U.S. crude oil futures settled 0.4 percent higher at $68.64 a barrel. The Canadian dollar was last trading 0.2 percent lower at C$1.2845 to the greenback. The currency, which fell 1.2 percent last week, touched its weakest level since April 9 at C$1.2858.

AUD/USD is supported around 0.7577 levels and currently trading at 0.7603 levels. It hit session high at 0.7647 and made session lows at 0.7603 levels. The Australian dollar traded near multi-week lows against US dollar on Monday as the greenback rose higher amid rising inflation expectations in the United States. The Australian dollar held at $0.7676 after hitting a two-week trough of $0.7655 on Friday. The currency slipped 1.3 percent last week, its biggest weekly fall since mid-March. Investors looked ahead to Australian consumer price data due Tuesday with March quarter core inflation seen at 1.8 percent, below the central bank's target band of 2-3 percent. Traders say the Aussie could fall below critical chart support of $0.7650 if the inflation figures miss forecasts amid bets the Reserve Bank of Australia (RBA) will prolong its spell of stable rates. The RBA has held interest rates at a record low 1.50 percent since August 2016 and is widely expected to extend the stretch for another year. The antipodean’s stable policy outlook contrasts with the U.S. Federal Reserve which is expected to raise rates at least two more times this year. Inflation expectations got a boost last week when oil prices, hit a more than 3-1/2-year peak, sending 10-year Treasury yields to levels not seen since early 2014. The last time yields neared the critical 3 percent barrier in 2013 it ruptured risk appetite and sent stocks sliding.

Equities Recap

European shares edged up on Monday as a rise in U.S. Treasury yields helped lift bank stocks to nearly 5-week highs, more than offsetting a disappointing update from UBS and losses among bond-proxy sectors.

UK's benchmark FTSE 100 closed up by 0.49 percent, the pan-European FTSEurofirst 300 ended the day up by 0.32 percent, Germany's Dax ended up by 0.37 percent, France’s CAC finished the day up by 0.52 percent.

Wall Street struggled for direction on Monday, ending the session largely unchanged, as signs of waning smartphone demand weighed on the Nasdaq and as rising bond yields offset earnings optimism.

Dow Jones closed down by 0. 08 percent, S&P 500 ended down 0. 00 percent, Nasdaq finished the day down by 0.26 percent.

Treasuries Recap 

U.S. bond prices fell on Monday, with the 10-year yield hitting its highest in over four years amid worries about the growing supply of government debt and accelerating inflation as oil and commodity prices climb.

The yield on 10-year Treasury notes was 2.971 percent, up 2 basis points from late on Friday. It touched 2.998 percent earlier Monday, which was the highest since January 2014.

Commodities Recap

Gold prices slipped to their lowest level in nearly two weeks in range-bound trade on Monday, as the dollar rose on the back of climbing U.S. Treasury yields and as global political concerns eased.

Spot gold dropped 0.9 percent to $1,323.40 per ounce, having touched a more than two-week low of $1,322.81. U.S. gold futures for June delivery settled down $14.30, or 1.1 percent, at $1,324 per ounce.

Oil prices rebounded from an early slide to finish higher and strengthen further in post-settlement trade, as investors feared U.S. sanctions could dampen Iran's output.

Brent crude futures  settled up 65 cents, or 0.9 percent, to $74.71 a barrel, after falling as low as $73.13. U.S. West Texas Intermediate crude futures  rose 24 cents to $68.64 a barrel, rebounding from a session low of $67.14. 

By Srikanth G
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