Market Roundup
•US Redbook (YoY) 15.2%, 12.7% previous
•US Mar Factory orders ex transportation (MoM) 2.5% ,0.4% previous
•US Mar Durables Excluding Defense (MoM) 1.4% ,1.2% previous
•US Mar JOLTs Job Openings 11.549M ,11.000M forecast, 11.266M previous
•US Mar Factory Orders (MoM) 2.2% ,1.1% forecast,-0.5% previous
•New Zealand GlobalDairyTrade Price Index -8.5% ,-3.6% previous
Looking Ahead - Economic Data (GMT)
•07:00 Australia Mar Retail Sales (MoM) 0.6% forecast, 1.8%previous
•07:00 Australia Invest Housing Finance (MoM) -1.8% previous
•07:00 Australia Home Loans (MoM) -4.7% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro was flat on Tuesday, holding close to a five-year low against the U.S. dollar as markets awaited Fed rate hike decision. Investors expect the Fed to hike rates by half a percentage point on Wednesday, and to detail plans to reduce its $8.9 trillion balance sheet. The U.S. central bank raised its policy interest rate by 25 basis points in March. Comments by Fed Chairman Jerome Powell at the conclusion of the meeting will be scrutinized for any new indications about whether the central bank will continue to hike rates to battle rising price pressures even if the economy weakens. The euro was flat at $1.0525. It had dropped to $1.0470 on Thursday, its lowest since January 2017. Immediate resistance can be seen at 1.0526 (5DMA), an upside break can trigger rise towards 1.0595 (38.2%fib).On the downside, immediate support is seen at 1.0490(23.6%fib), a break below could take the pair towards 1.0400 (Psychological level).
GBP/USD: The British pound initially gained on Tuesday, but gave up ground as traders took profits ahead of both Federal Reserve and Bank of England monetary policy meetings this week. The Bank of England meeting, which is expected to result in a 0.25-percentage-point rise in interest rates on Thursday, is the big event of the week for sterling. In recent weeks the pound has fallen sharply as investors have piled into dollars in expectation that the Federal Reserve will raise rates faster than other central banks and that the U.S. economy will hold up better than others in the face of soaring inflation and slowing economic grow. Immediate resistance can be seen at 1.2535(38.2%fib), an upside break can trigger rise towards 1.2637(50%fib).On the downside, immediate support is seen at 1.2476(23.6%fib), a break below could take the pair towards 1.2407(28th April low).
USD/CAD: The Canadian dollar strengthened against its U.S. counterpart on Tuesday, as the greenback gave back some recent gains against a basket of major currencies and comments by senior Bank of Canada official supported expectations for interest rate hikes. Canada’s currency was up 0.3% at 1.2836 to the greenback, or 77.91 U.S. cents, after trading in a range of 1.2826 to 1.2893. On Monday, the loonie touched its weakest level in more than four months at 1.2913. The price of oil , one of Canada's major exports, settled 2.6% lower at $102.41 a barrel as demand worries due to China's prolonged COVID-19 lockdowns outweighed support from a possible European oil embargo on Russia. Immediate resistance can be seen at 1.2840 (5 DMA), an upside break can trigger rise towards 1.2883 (23.6%fib).On the downside, immediate support is seen at 1.2800 (38.2%fib), a break below could take the pair towards 1.2740 (50%fib).
USD/JPY: The dollar was little changed against dollar on Tuesday as investors evaluated how much of the Fed's expected move to hike rates at the end of a two-day policy meeting on Wednesday and beyond was already priced in. The dollar index hit a 20-year high last week on expectations the U.S. central bank will be more aggressive than peers in tightening policy, with inflation running at its fastest pace in 40 years.But investors are also questioning whether most of the Fed’s hawkishness is already factored in and the dollar’s bull run may be due for a pause. Strong resistance can be seen at 130.52(23.6%fib), an upside break can trigger rise towards 131.53(Higher BB).On the downside, immediate support is seen at 128.99 (11DMA), a break below could take the pair towards 128.19(38.2%fib).
Equities Recap
European stocks rose on Tuesday after a string of upbeat earnings, while banking shares gained as government bond yields hit fresh highs in anticipation of quicker interest rate hikes by global central banks to tackle surging inflation.
UK's benchmark FTSE 100 closed up by 0.22 percent, Germany's Dax ended up by 0.73 percent, France’s CAC finished the day up by 0.79 percent.
Wall Street stocks ended higher on Tuesday after a choppy session in which each of the major indexes fluctuated between gains and losses as a key meeting of the Federal Reserve got under way.
Dow Jones closed up by 0.30% percent, S&P 500 closed up by 0.48 % percent, Nasdaq settled up by 0.22% percent.
Treasuries Recap
U.S. benchmark 10-year Treasury yields backed off the 3% level on Tuesday, as the steep sell-off drew buyers and prompted investors to cover short positions ahead of an expected Federal Reserve decision to deliver an aggressive 50 basis-point interest-rate hike to contain soaring inflation.
U.S. two-year Treasury yields were little changed at 2.729% . U.S. five-year yields were down 5 bps at 2.970% .
Commodities Recap
Gold firmed on Tuesday, tracking a slight retreat in U.S. Treasury yields and dollar, while investors anticipated an aggressive interest rate hike from the Federal Reserve when it concludes a two-day policy meeting.
Spot gold was up 0.4% at $1,870.56 per ounce by 1751 GMT. Prices had touched $1,849.90 earlier in the session, its lowest since Feb. 16.U.S. gold futures settled up 0.4% at $1,870.60 per ounce.
Oil prices fell by more than 2% on Tuesday as demand worries stemming from China's prolonged COVID-19 lockdowns outweighed the prospect of a European embargo on Russian crude.
Brent crude settled down $2.61, or 2.4%, at $104.97 a barrel. U.S. West Texas Intermediate (WTI) crude ended $2.76, or 2.6%, lower at $102.41.
