Market Roundup
- Tame inflation keeps pressure on BoJ to maintain stimulus.
- Japan Mar CPI, Core Nationwide YY, 0.9%, 0.9% eyed, 1.0% last
- Japan Mar CPI, Overall Nationwide, 1.1%, 1.5% last
- Reuters Tankan – Apr mfg index +21, non-mfg +36, Mar +28, +35, Jul +23/+35.
- BoE's Carney dampens expectations for May rate hike, sees "mixed" data
- German growth likely to slow in first quarter - finance ministry
- U.S. Treasury weighs emergency powers to curb Chinese investments -official
- China envoy says China will retaliate if U.S. insists on trade war - Xinhua
- China's ZTE slams U.S. ban on sales, says company's survival at risk
- EU, IMF mull Greek debt relief; no talks on bailout extension
- Italy's 5-Star sees chance of government deal with the League
- Fed's Mester wants rate hikes this year and next
- Foreign CB US debt holdings +$13,174 bln to $3.437 tln Apr 18 week
- Treasuries $13,598 bln to $3.083 tln, agencies +$331 mln to $274.252 bln
- U.S. 'junk' bond funds take in most weekly cash since 2016 -Lipper
Economic Data Ahead
- (1000 ET/1400 GMT) EZ Apr Consumer confid, -0.20 eyed, 0.10 last
Key Events Ahead
- (0530 ET/0930 GMT) BoE's Member of the Monetary Policy Committee Michael Saunders will speak at the Fraser of Allander Institute, University of Strathclyde – Glasgow, Scotland
- (0730 ET/1130 GMT) Participation by the president of the German Federal Bank, Jens Weidmann, vice president of the Bundesbank, Claudia Buch and executive board of the Deutsche Bundesbank, Andreas Dombret at the Spring Meeting by IMF and World Bank. Press breakfast with Weidmann and Olaf Scholz, German Minister of Finance – Washington, D.C.
- (0940 ET/1340 GMT) Fed's Charles Evans speaks on current economic conditions and monetary policy before the Graaskamp Center Spring Board Conference - Chicago
- (1245 ET/1645 GMT) G20 Finance Ministers hold news conference following their talks on the sidelines of the spring meeting of the IMF and World Bank - Washington, D.C.
- N/A BoE Deputy Governor Ben Broadbent participates in G7 meetings (final day). - Washington, D.C.
- N/A BoE's Mark Carney participates in IMF meetings (to April 22). - Washington, D.C.
FX Beat
DXY: The dollar index surged to an 11-day peak amid higher yields in the U.S. 10 year treasury's that climbed from 2.86 percent to 2.93 percent. The greenback against a basket of currencies trades 0.1 percent up at 89.97, having touched a high of 90.00 earlier, its highest since Apr. 9. FxWirePro's Hourly Dollar Strength Index stood at 117.37 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro declined, extending previous session losses, as the greenback rallied after new applications for U.S. unemployment benefits fell last week, indicating continued job growth after a slowdown in March. Moreover, higher U.S. Treasury yields boosted the bid tone around the U.S. dollar. The European currency traded 0.05 percent down at 1.2341, having touched a high of 1.2413 on Tuesday, its highest since Mar. 28. FxWirePro's Hourly Euro Strength Index stood at 78.25 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on the Eurozone preliminary consumer confidence, ahead of the Fed's Evan and William speech. Immediate resistance is located at 1.2421 (Mar. 28 High), a break above targets 1.2476 (Mar. 27 High). On the downside, support is seen at 1.2321, a break below could drag it lower 1.2299 (Apr. 12).
USD/JPY: The dollar rallied to a 1-week peak as the 10-year U.S. Treasuries yield hit a 1-month high of 2.934 percent as higher oil prices fanned inflation expectations. Moreover, data showing U.S. initial claims for unemployment benefits fell 1,000 to a seasonally adjusted 232,000 for the week ended April 14 boosted dollar bulls sentiment. The major was trading 0.3 percent up at 107.62, having hit a high of 107.73 earlier, its highest since Apr. 13. FxWirePro's Hourly Yen Strength Index stood at 15.17 (Neutral) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Fed's Evan and William speech. Immediate resistance is located at 107.90 (Feb. 21 High), a break above targets 108.50. On the downside, support is seen at 106.77 (Apr. 6 Low), a break below could take it lower 106.26 (Mar. 29 Low).
GBP/USD: Sterling slumped, having hit a 2-week low in the prior session after Bank of England Governor Mark Carney dampened widespread expectations for an interest rate hike in May. Moreover, disappointing UK retail sales released on Thursday also raised some doubts about the outlook for BoE rate hikes. The major traded 0.05 percent down at 1.4074, having hit a low of 1.4068 on Thursday, it’s lowest since Apr. 6. FxWirePro's Hourly Sterling Strength Index stood at -77.59 (Slightly Bearish) by 0400 GMT. Investors’ focus will remain on MPC member Sauders speech, ahead of the Fed official speeches. Immediate resistance is located at 1.4136 (21-DMA), a break above could take it near 1.4229 (5-DMA). On the downside, support is seen at 1.4021 (Apr. 3 Low), a break below targets 1.3965 (Apr. 5 Low). Against the euro, the pound was trading 0.1 percent down at 87.68 pence, having hit a low of 87.70 pence the day before, it’s lowest since Apr. 2.
AUD/USD: The Australian dollar fell to a 10-day low as domestic inflation remained below the central bank's target range mid-point. The RBA is widely expected to hold interest rates at a record low 1.50 for another year after staying pat for 20 months. The Aussie trades 0.2 percent down at 0.7714, having hit a low of 0.7705; it’s lowest since Apr. 20. FxWirePro's Hourly Aussie Strength Index stood at -24.84 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7686 (Mar. 23 Low), a break below targets 0.7643 (Mar. 29 Low). On the upside, resistance is located at 0.7745 (21-DMA), a break above could take it near 0.7819 (Feb. 28 high).
NZD/USD: The New Zealand dollar slumped to an over 2-week low as the greenback rallied after the two-year U.S. Treasury yield hit fresh 9-year high and the 10-year yield rose higher, which led to the 10-year NZ-US yield spread to hit fresh lifetime lows below zero. The Kiwi trades 0.5 percent down at 0.7235, having touched a low of 0.7235 earlier, its lowest level since Apr. 3. FxWirePro's Hourly Kiwi Strength Index was at -98.45 (Slightly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7288 (21-DMA), a break above could take it near 0.7329 (5-DMA). On the downside, support is seen at 0.7219 (Mar 30 Low), a break below could drag it below 0.7188 (Mar. 29 Low).
Equities Recap
Asian shares plunged, weighed down by a warning on smartphone demand from the world's largest contract chipmaker, while the greenback rallied to an over 2-week peak on higher U.S. Treasury yields.
MSCI's broadest index of Asia-Pacific shares outside Japan slumped 0.6 percent.
Tokyo's Nikkei declined 0.1 percent to 22,162.24 points, Australia's S&P/ASX 200 index eased 0.2 percent to 5,868.80 points and South Korea's KOSPI tumbled 0.5 percent to 2,474.71 points.
Shanghai composite index fell 1.5 percent to 3,073.33 points, while CSI300 index was trading 1.43 percent down at 3,757.92 points.
Hong Kong’s Hang Seng was trading 0.8 percent lower at 30,482.52 points. Taiwan shares shed 1.8 percent to 10,779.38 points.
Commodities Recap
Crude oil prices rose, holding gains near three-year highs hit the day before as ongoing OPEC-led supply cuts gradually cut down excess supplies. International benchmark Brent crude was trading 0.3 percent up at $73.77 per barrel by 0435 GMT, having hit a high of $74.71 on Thursday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.3 percent up at $68.28 a barrel, after rising as high as $69.53 the prior session, its highest since Nov. 2014.
Gold prices declined and were on course for the first weekly fall in three as expectations of higher U.S. interest rates and easing political tensions on the Korean Peninsula and Syria dented demand for the safe-haven assets. Spot gold was down 0.2 percent at $1,342.12 an ounce at 0439 GMT, having hit a high of $1,355.54 an ounce on Wednesday, its highest since Apr. 11. U.S. gold futures fell 0.3 percent to $1,344.50 per ounce.
Treasuries Recap
The Australian government bonds slumped on last trading day of the week following overnight losses in the U.S. Treasuries, UK Gilts, and Germany bunds, where 10-year Note yield breached 2.90 percent. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 3 basis points to 2.882 percent, the yield on the long-term 30-year Note jumped 3 basis points to 3.388 percent and the yield on short-term 2-year also surged nearly 1 basis point to 2.133 percent by 02:50 GMT.
The Canadian government bond prices were lower across the yield curve in sympathy with U.S. Treasuries. The two-year fell 3 Canadian cents to yield 1.908 percent and the 10-year declined 27 Canadian cents to yield 2.323 percent. The 2-year yield touched its highest since June 2011 at 1.926 percent.
