Market Roundup
• US durable goods orders rise less than expected (0.8% vs 1.8% forecast).
• US consumer confidence falls to 94.2 from 96.2, missing forecast at 96.0.
• Atlanta Fed’s GDPNow: US economy on track to grow 0.4% in Q! ’16 vs +0.3% estimate on Apr 19.
• US Fed’s Nowcast sees Q1 GDP 0.8% from 1.1%, 1.2% from 1.9% in Q2 ’16.
• US Apr Markit composite flash PMI 51.7 vs 51.3 previous, Svcs PMI 52.1 vs 51.7 previous.
• ECB Weidmann: defends easy mon policy, rejects targeted bond buys.
• BoC’s Poloz: unclear when time will be right to tighten, negative rates are having effects globally but not large.
• Narrow lead for Brexit ahead of EU referendum - ICM poll.
• Sterling reaches 12-week high as funds trim Brexit bets.
• Spain's King says will not put forward candidate to be Prime Minister.
• Brazil's VP eyes ex-central bank chief Meirelles as possible finance minister.
Looking Ahead - Economic Data (GMT)
• 22:45 New Zealand Trade Balance YY* Mar forecast -3.56b, -3.32b-previous
• 22:45 New Zealand Trade - Exports* Mar forecast 4.83b, 4.25b- previous
• 01:30 Australia CPI QQ* Q1 forecast 0.3%, .40%- previous
• 01:30 Australia CPI YY* Q1 forecast 1.8%, 1.70%- previous
• 01:30 Australia RBA Weighted Median CPI QQ Q1 forecast 0.5%, 0.50%- previous
• 01:30 Australia RBA Trimmed Mean CPI QQ Q1 forecast 0.5%, 0.60%- previous
• 01:30 Australia RBA Trimmed Mean CPI YY Q1 forecast 2%, 2.10%- previous
• 01:30 Australia CPI Index Number* Q1 108.4- previous
Looking Ahead - Events, Other Releases (GMT)
• --:-- Japan- Bank of Japan monetary policy meeting (to April 28).
Currency Summaries
EUR/USD is likely to find support at 1.1255 levels and currently trading at 1.1298 levels. The pair has made session high at 1.1340 and hit lows at 1.1278 levels. Euro rose against US Dollar on Tuesday as the data showed U.S core durables weakened in March. Weaker than expected U.S economic data boosted expectations that weak economic data would lead the Fed to strike a dovish tone in a policy statement on Wednesday. U.S. durable goods orders rebounded less than expected in March and US consumer confidence missed expectations, adding to a slew of weak data on the U.S. economy in the first quarter. The euro was last up 0.30 percent against the dollar at $1.1320 after U.S. March durable goods orders and April consumer confidence data came in below the expectations.
GBP/USD is supported in the range of 1.4487 levels currently trading at 1.4575 levels. It reached session high at 1.4637 and hit low at 1.4563 levels. Sterling rose sharply against US dollar on Tuesday, broadly supported by renewed expectations that Britain will vote to remain in the European Union, driving the currency back to levels last seen before the setting of a date for the Brexit referendum. The pound initially as reached as high as $1.4635 against weaker dollar. However the pair retreated from highs as a new ICM poll showed gains for the out camp took some strength out of sterling in afternoon US session. Investors worry that a vote for a Brexit in June would leave Britain exposed to a further slide by the pound. The pound was up 0.7 percent against the dollar at $1.4588. Against the euro it gained 0.4 percent to 77.52 pence , having reached as high as 77.35 pence.
USD/CAD is supported at 1.2590 levels and is trading at 1.2603 levels. It has made session high at 1.2652 and lows at 1.2606 levels. The Canadian dollar firmed against U.S dollar on Tuesday as negative US economic data and rally in oil prices supported Canadian dollar ahead to a rate decision from the Federal Reserve. Investors are betting that the Fed will strike a dovish tone in its policy statement to be released on Wednesday, but the uncertainty around the announcement kept moves limited in the currency pair. Crude futures rose from early in the session as the dollar fell for a second straight day. The currency's strongest level of the session was C$1.2653, while its weakest was C$1.2592.
USD/JPY is supported around 110.66 levels and currently trading at 111.29 levels. It hit session high at 111.48 levels and made session lows at 110.84 levels. The U.S. dollar edged up against the yen on Tuesday as traders took bearish bets on Japanese yen ahead of the BOJ meeting. The Japanese currency weakened on speculation that BOJ would introduce more easing measures. Meanwhile, the Fed, which will release its post-meeting statement at 2 p.m. EDT on Wednesday, is expected to hold interest rates steady, but investors will be watching for changes to its assessment on the U.S. economy. The yen was flat , as investors waited with anxiety to know monetary stimulus this week from the Bank of Japan, which begins a two-day meeting on Wednesday.
Equities Recap
European shares ended slightly higher on Tuesday, supported by firmer oil prices and encouraging company results, with pulp and paper maker UPM and oil major BP rallying on better-than-expected figures.
Britain's blue-chip FTSE 100 index closed up by 0.45 percent, France's benchmark CAC-40 index closed down by 0.24 percent, Germany's DAX ended down 0.22 percent, meanwhile the pan-European Eurofirst 300 index was up by 0.30 percent.
US stocks ended up on Tuesday , buoyed by gains in energy sector ,even though lackluster economic data weakened US dollar.
Dow Jones closed up by 0.04 percent, S&P 500 ended up by 0.16 percent, Nasdaq finished the day down by 0.17 percent.
Treasuries Recap
U.S. Treasury prices scaled back their losses on Tuesday as an earlier spike in yields drew decent demand for a $34 billion auction of five-year government debt, reviving bids for other maturities.
Benchmark 10-year Treasury notes R were down 8/32 in price with a yield of 1.932 percent, up 3 basis points from late on Monday. Earlier Tuesday, the 10-year yield reached a five-week high of 1.941 percent.
Commodities Recap
Crude oil prices rose about 3 percent on Tuesday on the back of a rally in the gasoline market and as a tumbling dollar boosted commodities denominated in the greenback after bets the Federal Reserve will hold U.S. interest rates where they are.
Brent crude futures finished up $1.26, or 2.8 percent, at $45.74 a barrel.
U.S. crude futures settled up $1.40, or 3.3 percent, at $44.04.
Gold rebounded on Tuesday after weaker-than-expected U.S. durable goods data knocked the dollar to a session low against the euro, but prices remained hemmed into a narrow range as a two-day Federal Reserve policy meeting began.
Spot gold was up 0.3 percent at $1,241.66 an ounce at 2:08 p.m. EDT (1808GMT), while U.S. gold futures for June delivery settled up 0.3 percent at $1,243.40 an ounce.
