Market Roundup
• Weekly crude stocks off 3.41 million BBLS vs forecast 0.71mn BBL build (EIA).
• BOJ’s Kuroda: BOJ has certainly not run out of ammunition, can still ease if necessary.
• Germany’s Merkel says up to governments to foster growth so ECB can raise rates.
• UK’s Osborne: We have not done a lot of contingency planning around leaving the EU.
• BoC’s Wilkins: focus is on downside risks to econ, because there seems to be so many of them.
• Italy’s Padoan: Brexit is a systemic concern other countries may consider Brexit a example to follow.
• Trump surges in support, almost even with Clinton in national U.S. poll.
• Brazil’s Supreme Court rejects government request to annul impeachment (court spokesman).
• ECB’s Weidmann: ECB must not keep policy ultra-loose for too long.
Looking Ahead - Economic Data (GMT)
• 22:30 New Zealand Manufacturing PMI* Apr 54.7- previous
• 23:50 Japan Bank Lending YY Apr 2%-previous
• 23:50 Japan Foreign Bond Investment w/e 984.7b- previous
• 23:50 Japan Foreign Invest JP Stock w/e 602.0b- previous
• 23:50 Japan Current Account NSA JPY Mar forecast 3004.5b, 2434.9b- previous
• 05:00 Japan Economy Watchers Poll Apr 45.4- previous
Looking Ahead - Events, Other Releases (GMT)
• 05:00 Japan- BOJ Deputy Governor Hiroshi Nakaso gives opening remarks at a BoJ-hosted seminar on Japan's retail settlement system
Currency Summaries
EUR/USD is likely to find support at 1.1388 levels and currently trading at 1.1425 levels. The pair has made session high at 1.1447 and hit lows at 1.14208 levels. The dollar declined on Wednesday, dropping to a 6-day low against the euro as the investors shifted back into the single currency with no major U.S. economic data. The dollar hit 6-day lows versus the euro as traders reversed course that pushed the greenback to lows against the euro. In late trading, the dollar index , which tracks the greenback against a basket of six other currencies, shed 0.5 percent to 93.797, moving away from a two-week high of 94.356 set overnight.Meanwhile,U.S. and European stocks stumbled amid disappointing corporate earnings after big gains a day earlier. The euro rose 0.5 percent against the dollar to $1.1427.
GBP/USD is supported in the range of 1.4374 levels and currently trading at 1.4446 levels. It reached session high at 1.4488 and dropped to session low at 1.4425 levels. Sterling was firmer on Wednesday against the dollar as the tightly fought referendum on European Union membership entered its final six weeks. Since falling 7 percent in the first months of the Brexit campaign proper, the pound has recovered solidly, helped by the intervention last month of U.S. President Barack Obama to note risks in leaving the bloc. But with surveys conducted recently still points towards a very closely fought referendum on June 23. Market is awaiting central bank rate-setting meeting where central bankers may change their view on economy. The BoE's Monetary Policy Committee is widely expected to keep rates unchanged on Thursday.
USD/CAD is supported at 1.2794 levels and is trading at 1.2844 levels. It has made session high at 1.2916 and lows at 1.2829 levels. The Canadian dollar rose against its U.S. counterpart on Wednesday, to its highest level in 6-days, as energy prices rallied as oil jumped after U.S. crude inventories unexpectedly fell for the first time since March. U.S. crude ended up $1.57 at $46.23 a barrel. The gains in oil helped the commodity-sensitive currency rise for the second day in a row after tumbling at the start of the month. Still, that decline gave back only a small part of the about 14 percent gain it made between late January and the end of April. The Canadian dollar ended the North American trading session at C$1.2851 to the greenback, or 77.81 U.S. cents, stronger than Tuesday's close of C$1.2916, or 77.42 U.S. cents.
NZD/USD is supported around 0.6777 levels and currently trading at 0.6818 levels. It hit session high at 0.6845 and made session lows at 0.6802 levels. The jumped against the U.S. dollar on Wednesday, after the Reserve Bank of New Zealand wrong-footed some investors by taking no new steps to curb a hot housing market. The New Zealand dollar was squeezed higher to $0.6820, having gained a full cent from a six-week low touched on Tuesday. Its next big resistance level is $0.6891, the 23.6 percent retracement of the January-April move. In its six-monthly financial stability report, the RBNZ said it was increasingly concerned about the country's overheated housing market, but it stopped short of taking measures to tighten lending, forcing kiwi bears to the exit.
Equities Recap
European ended mixed on Wednesday as some weak earnings reports pushed the market lower after two days of gains.
UK's benchmark FTSE 100 closed up 0.44 percent, the pan-European FTSEurofirst 300 ended the day down 0.44 percent, Germany's Dax ended down by 0.7 percent, France’s CAC finished the day down by 0.5 percent.
U.S. stocks dropped on Wednesday as feeble quarterly reports from Walt Disney, Macy's and Fossil reverberated across the consumer sector.
Dow Jones closed down by 1.20 percent, S&P 500 ended down by 0.95 percent, Nasdaq finished the day down by 1.02 percent.
Treasuries Recap
Treasury yields fell on Wednesday after the U.S. government saw strong demand for its $23 billion auction of 10-year notes, the second sale of $62 billion in new coupon-bearing debt this week.
Benchmark 10-year notes ended up 7/32 in price on the day to yield 1.74 percent, down from 1.76 percent on Tuesday.
Commodities Recap
Gold rebounded from two-week lows on Wednesday as the dollar's rally paused and global shares fell, rekindling investors' appetite for the precious metal.
Spot gold rose 0.8 percent to $1,275.50 an ounce by 2:03 p.m. EDT (1803 GMT), while U.S. gold for June delivery settled up 0.8 percent at $1,275.50 an ounce. The metal touched a low of $1,257.25 on Tuesday, its weakest since April.
Oil jumped on Wednesday, with Brent up more than 4 percent for a second day in a row, after the U.S. government unexpectedly said crude inventories fell the first time since March, adding to concerns over supply outages in Canada and Nigeria.
Oil markets extended gains after the data. Brent crude futures settled up $2.08, or 4.6 percent, at $47.60 per barrel. In the previous session it gained 4.3 percent.
U.S. crude's West Texas Intermediate futures rose $1.57, or 3.5 percent, to settle at $46.23.
