Market Roundup
- BOJ commits to very low rates through early 2020, gives timeframe for 1st time
- S.Korea economy unexpectedly contracts in Q1, worst since global financial crisis
- Bank of England to refrain from rate hike until August 2020-NIESR
- Moore, under fire from Democrats, remains Trump's Fed pick
- China c. bank has no intent to tighten or relax monetary policy - vice gov
Economic Data Ahead
- No major economic data releases
Key Events Ahead
- (0230 ET/0630 GMT) Bank of Japan Governor Haruhiko Kuroda press conference
- (0330 ET/0730 GMT) Swedish Central Bank to announce interest rate decision and will publish Monetary Policy Report in Stockholm
- (0830 ET/1230 GMT) Participation by ECB Vice President Luis de Guindos in a roundtable at "Europe at crossroads" event organised by the European American Chamber of Commerce in New York
- (1100 ET/1500 GMT) Federal Reserve Bank of Kansas City issues Manufacturing Survey for April in Kansas City
FX Beat
DXY: The dollar index rallied to multi-month peaks, as inventors’ expect the U.S. GDP to have grown an annualised 2.1 percent in the first three months of this year, largely keeping the pace from 2.2 percent expansion in the preceding quarter. The greenback against a basket of currencies traded 0.05 percent up at 98.10, having touched a high of 98.19 on Wednesday, its highest since May 2017. FxWirePro's Hourly Dollar Strength Index stood at 145.89 (Highly Bullish) by 0400 GMT.
EUR/USD: The euro eased, hovering towards a 22-month low hit in the prior session on data that showed German business morale deteriorated in April, as trade tensions hurt the industrial engine of Europe's largest economy. The European currency traded 0.05 percent down at 1.1151, having touched a low of 1.1140 on Wednesday, its lowest since June 2017. FxWirePro's Hourly Euro Strength Index stood at 52.07 (Bearish) by 0400 GMT. Investors’ attention will remain on data out of Eurozone economies, ahead of U.S. unemployment benefit claims, durable goods orders and Kansas Fed Manufacturing Activity report. Immediate resistance is located at 1.1184 (23.6% retracement of 1.1323 and 1.1140), a break above targets 1.1210 (38.2% retracement). On the downside, support is seen at 1.1096 (May. 2017 Low) a break below could drag it till 1.1030.
USD/JPY: The Japanese yen surged, reversing some of its previous session losses after The Bank of Japan kept monetary policy steady and pledged to keep interest rates extremely low at least through early 2020, giving a specific timeframe for the first time on how long borrowing costs will remain low. The major was trading 0.2 percent down at 111.97, having hit a high of 112.40 on Wednesday, its highest since Dec. 20. FxWirePro's Hourly Yen Strength Index stood at 57.80 (Bullish) by 0400 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of U.S. unemployment benefit claims, durable goods orders and Kansas Fed Manufacturing Activity report. Immediate resistance is located at 112.60 (Dec. 20 High), a break above targets 113.24 (Dec. 5 High). On the downside, support is seen at 111.20 (Apr. 3 Low), a break below could take it lower at 110.53 (Mar. 20 Low).
GBP/USD: Sterling consolidated near a 2-month low touched in the prior session after the National Institute of Economic and Social Research stated that the Bank of England is likely to keep interest rates on hold until August 2020 because of a slower global economy and prolonged Brexit uncertainty. The major traded flat at 1.2902, having hit a low of 1.2887 on Wednesday; it’s lowest since Feb. 15. FxWirePro's Hourly Sterling Strength Index stood at -38.59 (Neutral) 0400 GMT. Investors’ attention will remain on the UK CGB industrial Trends Survey-orders, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2957 (5-DMA), a break above could take it near 1.3008 (10-DMA). On the downside, support is seen at 1.2854 (Feb. 7 Low), a break below targets 1.2818 (Jan. 14 Low). Against the euro, the pound was trading flat at 86.44 pence, having hit a low of 86.81 on Tuesday, it’s lowest since Mar. 22.
AUD/USD: The Australian dollar steadied after falling to a 4-month low on weaker-than-expected domestic inflation numbers released yesterday that heightened the prospect of an interest rate cut. The Aussie trades 0.1 percent up at 0.7020, having hit a low of 0.7004 earlier; it’s lowest since Jan. 4. FxWirePro's Hourly Aussie Strength Index stood at -113.93 (Highly Bearish) by 0400 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6981 (Jan. 2 Low), a break below targets 0.6950. On the upside, resistance is located at 0.7051 (Mar. 7 High), a break above could take it near 0.7097 (Mar. 14 High).
NZD/USD: The New Zealand dollar consolidated near to a 5-month low as the greenback surged to multi-month peaks. The Kiwi trades 0.05 percent up at 0.6598, having touched a low of 0.6581 on Wednesday, its lowest level Nov. 1. FxWirePro's Hourly Kiwi Strength Index was at -105.51 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6694 (Apr. 19 High), a break above could take it near 0.6758 (Apr. 9 High). On the downside, support is seen at 0.6562, a break below could drag it below 0.6514 (Nov. 1 Low).
Equities Recap
Asian shares slumped as an unexpected deterioration in German and South Korean economic data stoked fears of slowing global growth.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent.
Tokyo's Nikkei rose 0.5 percent to 22,320.76 points, and South Korea's KOSPI eased 0.4 percent to 2,191.38 points.
Shanghai composite index fell 1.2 percent to 3,162.54 points, while CSI 300 index traded 1.1 percent up at 3,987.62 points.
Hong Kong’s Hang Seng traded 0.1 percent lower at 29,779.42 points. Taiwan shares added 0.1 percent to 11,039.86 points
Commodities Recap
Crude oil prices surged, hovering towards a near 6-month peak amid tighter U.S. sanctions on Iran and producer cartel OPEC's continued curbs on supply. International benchmark Brent crude was trading 0.1 percent higher at $74.58 per barrel by 0445 GMT, having hit a high of $74.71 on Tuesday, its highest since Nov. 1, 2018. U.S. West Texas Intermediate was trading 0.1 percent up at $65.79 a barrel, after rising as high as $66.58 on Tuesday, its highest since the Oct. 31, 2018.
Gold prices steadied as weak data from Germany and a fall in equities raised flags about the pace of global economic growth. Spot gold was trading flat at $1,275.41 per ounce by 0447 GMT, having touched a low of $1,266.18 on Tuesday, its lowest since Dec. 27. U.S. gold futures slipped 0.1 percent to $1,278 an ounce.
Treasuries Recap
The yield on the benchmark 10-year JGB note, which moves inversely to its price, plunged nearly 3-1/2 basis points to -0.032 percent, the yield on the long-term 30-year surged 1-1/2 basis points to 0.574 percent and the yield on short-term 2-year remained flat at -0.148 percent.
The Canadian government bond prices were higher across the yield curve, with the two-year up 11.5 Canadian cents to yield 1.511 percent and the 10-year rising 72 Canadian cents to yield 1.674 percent. The 10-year yield fell 2.8 basis points further below the yield on the equivalent U.S. bond to a spread of -84.8 basis points, its widest since March 25.
