Market Roundup
- Trump and France's Macron seek new measures on Iran as deadline looms
- Trump says NAFTA talks going 'nicely,' Canada sees progress on auto rules
- U.S. senators push banks for information on Russian 'oligarchs'
- U.S. consumer confidence, housing data highlight economy's strength
- Shire says willing to recommend Takeda's $64 bln offer to shareholders
- Ahead of summit with North, S. Koreans hope more for peace than unification
- China issues new rules governing tri-party repos
- Germany lowers growth forecast as business morale weakens - source
Economic Data Ahead
- (0245 ET/0645 GMT) France Apr Consumer Confidence, f'cast 100, last 100
Key Events Ahead
- (0300 ET/0700 GMT) ECB's Francois Villeroy de Galhau opens a conference at the Bank of France entitled "Non-bank finance: trends and alliances" - Paris
- (0300 ET/0700 GMT) Riksbank monetary policy meeting – Stockholm
- (0330 ET/0730 GMT) ECB's Philip Lane speaks on a panel at a Bank of France conference titled "Non-Bank Finance: Trends and Challenges" – Paris
- (0430 ET/0830 GMT) ECB's Klaas Knot speaks at a Bank of France conference entitled "Non-Bank Finance: Trends and Challenges" - Paris
- (1615 ET/2015 GMT) BOC's Stephen Poloz, Carolyn Wilkins will participate in Senate Standing Committee on Banking, Trade and Commerce on Finance - Ottawa
FX Beat
DXY: The dollar index steadied after retreating from a 3-1/2 month peak in the previous session, as the U.S. 10-year bond yield rose above 3 percent to hit its highest level since early 2014. The greenback against a basket of currencies trades 0.2 percent up at 90.94, having touched a high of 91.08 on Tuesday, its highest since Jan. 12. FxWirePro's Hourly Dollar Strength Index stood at 156.37 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro declined as the gap between U.S. and German 10-year government bond yields hit its widest in 29 years. Moreover, talks that European Central Bank policymakers feel it is still too early to announce a timetable for winding down its bond-buying weighed on the major. The European currency traded 0.1 percent down at 1.2218, having touched a low of 1.2181 the day before, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at 16.31 (Neutral) by 0400 GMT. Investors’ attention will remain on series of data from Eurozone economies, ahead of the U.S. M.B.A. Mortgages applications. Immediate resistance is located at 1.2260, a break above targets 1.2290 (Apr. 6 High). On the downside, support is seen at 1.2154 (Mar. 1 Low), a break below could drag it lower 1.2100.
USD/JPY: The dollar rallied to a fresh 2-1/2 month peak as strong data on U.S. consumer confidence and new home sales bolstered the case that the world's biggest economy will continue to grow in the coming quarters. The major was trading 0.1 percent up at 109.06, having hit a high of 109.20 the day before, its highest since Feb. 9. FxWirePro's Hourly Yen Strength Index stood at -150.37 (Highly Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. housing price index and new homes sales data. Immediate resistance is located at 109.31 (Feb. 9 High), a break above targets 109.78 (Feb. 8 High). On the downside, support is seen at 107.94 (5-DMA), a break below could take it lower 107.52 (10- DMA).
GBP/USD: Sterling eased, having rebounded from a 5-week low in the prior session on news about a possible takeover of a British pharmaceutical company and easing concerns about the British economy. The major traded 0.1 percent down at 1.3969, having hit a low of 1.3918 on Tuesday, it’s lowest since Mar. 19. FxWirePro's Hourly Sterling Strength Index stood at 104.21 (Highly Bearish) by 0400 GMT. Investors’ focus will remain on the U.S. fundamental drivers, amid a lack of economic data from the UK docket. Immediate resistance is located at 1.4031 (Apr. 23 High), a break above could take it near 1.4110 (21-DMA). On the downside, support is seen at 1.3910, a break below targets 1.3874 (Mar. 13 Low). Against the euro, the pound was trading 0.1 percent down at 87.45 pence, having hit a low of 87.91 pence on Friday, it’s lowest since Mar. 27.
AUD/USD: The Australian dollar slumped to a 4-1/2 month low as the U.S. dollar continued to get bolstered by rising bond yields, with 10-year Treasuries breaching the 3 percent key level. The Aussie trades 0.4 percent down at 0.7573, having hit a low of 0.7572; it’s lowest since Dec. 13. FxWirePro's Hourly Aussie Strength Index stood at -145.83 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7552 (Dec. 13 Low), a break below targets 0.7501 (Dec 8 Low). On the upside, resistance is located at 0.7625, a break above could take it near 0.7719.
NZD/USD: The New Zealand dollar tumbled, extending losses for the seventh consecutive session, as U.S. 10- years Treasury yields rallied to touch the 3.00 percent mark. Moreover, diverging monetary policy expectations continued to weigh heavily on the major. The Kiwi trades 0.4 percent down at 0.7092, having touched a low of 0.7089 earlier, its lowest level since Apr. 1. FxWirePro's Hourly Kiwi Strength Index was at -134.84 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7156, a break above could take it near 0.7212 (5-DMA). On the downside, support is seen at 0.7072 (Jan. 4 Low), a break below could drag it below 0.7060.
Equities Recap
Asian shares slumped to its lowest level in almost three weeks, while the greenback steadied near a 3-1/2 month high following a rise in U.S. bond yields to 3 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan plunged 0.7 percent.
Tokyo's Nikkei declined 0.3 percent to 22,219.24 points, South Korea's KOSPI tumbled 0.9 percent to 2,440.47 points.
Shanghai composite index fell 0.5 percent to 3,114.68 points, while CSI300 index was trading 0.5 percent down at 3,825.96 points.
Hong Kong’s Hang Seng was trading 1.03 percent lower at 30,319.35 points. Taiwan shares shed 0.2 percent to 10,559.97 points.
Commodities Recap
Crude oil prices declined from more than three-year highs touched the previous session as increasing U.S. fuel inventories and production weighed on market sentiment. International benchmark Brent crude was trading 0.05 percent down at $73.85 per barrel by 0437 GMT, having hit a high of $75.44 on Tuesday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.05 percent down at $67.66 a barrel, after rising as high as $69.53 on Thursday, its highest since Nov. 2014.
Gold prices slumped as the dollar rallied towards more than three-month highs and on easing concerns over North Korea and a Sino-U.S. trade war. Spot gold was down 0.2 percent at $1,327.10 per ounce at 0442 GMT, having hit a low of $1,321.99 an ounce on Monday, its lowest since Apr. 6. U.S. gold futures eased 0.2 percent to $1,330.60 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 3.0015 percent higher by 0.017 bps, while 5-year yield was 0.02 bps up at 2.831 percent.
The Japanese government bonds traded nearly flat ahead of the Bank of Japan monetary policy decision scheduled for Friday. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, traded flat at 0.055 percent, the yield on the long-term 30-year note remained steady at 0.742 percent and the yield on short-term 2-year hovers around -0.133 percent.
The Canadian government bond prices were higher across the yield curve, with the two-year up 1 Canadian cent to yield 1.914 percent and the 10-year rising 5 Canadian cents to yield 2.348 percent. The gap between the 10-year yield and its U.S. counterpart widened by 3.3 basis points to a spread of -65.2 basis points, its widest since March.
