Market Roundup
- China Apr Caixin Mfg PMI Final, 51.1, f'cast 50.9, last 51.0
- Fed likely to keep rates steady; investors bet on June hike
- Trump trade chief wants to open China, not change its economic system
- Mueller raises possibility of Trump subpoena -former Trump lawyer
- Japan final April factory PMI points to domestic bounce, export weakness
- China c.bank lowers yuan midpoint to weakest in more than 3 months
- UK shop prices fall again ahead of Bank of England meeting - BRC
- S.Korea says it wants U.S. troops to stay regardless of any treaty with N.Korea
- Pushing to bury Iran deal, Israel says no one wants war with Tehran
- New Zealand wage growth tepid in Q1, even as unemployment falls to 9-yr low
Economic Data Ahead
- (0350 ET/0750 GMT) France Apr Markit Mfg PMI, f'cast 53.4, last 53.4
- (0355 ET/0755 GMT) Germany Apr Markit/BME Mfg PMI, f'cast 58.1, last 58.1
- (0400 ET/0800 GMT) EZ Apr Markit Mfg Final PMI, f'cast 56.0, last 56.0
- (0430 ET/0830 GMT) Great Britain Apr Markit/CIPS Cons PMI, f'cast 50.5, last 47.0
- (0500 ET/0900 GMT) EZ Q1 GDP Flash Prelim YY, f'cast 2.5%, last 2.7%
- (0500 ET/0900 GMT) EZ Q1 GDP Flash Prelim QQ, f'cast 0.4%, last 0.6%
- (0500 ET/0900 GMT) EZ Mar Unemployment Rate, f'cast 8.5%, last 8.5%
- (0500 ET/0900 GMT) Italy Q1 GDP Prelim YY, f'cast 1.4%, last 1.6%
Key Events Ahead
- (0630 ET/1030 GMT) Germany's Scholz presents his budget plans for 2018 and 2019 during a news conference
- (0740 ET/1140 GMT) ECB Supervisor Ignazio Angeloni speaks in London
- (1400 ET/1800 GMT) FOMC announces decision on interest rate, followed by statement
FX Beat
DXY: The dollar index held firm near a 4-month peak, supported by the outlook for a strong U.S. economy and rising yields. The greenback against a basket of currencies trades 0.05 percent up at 92.47, having touched a high of 92.57 on Tuesday, its highest since Jan. 10. FxWirePro's Hourly Dollar Strength Index stood at 97.67 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling to a near 4-month low in the previous session as the greenback slightly eased from recent peaks. Investors’ attention will now shift to the Eurozone Q1 preliminary GDP numbers, which is expected to slow down to 2.5 percent from previous 2.7 percent. The European currency traded 0.1 percent up at 1.1999, having touched a low of 1.1981 the day before, its lowest since Jan. 12. FxWirePro's Hourly Euro Strength Index stood at -82.65 (Slightly Bearish) by 0500 GMT. Investors’ attention will remain on Eurozone Q1 prelim GDP figures, ahead of the U.S. ADP employment change and FOMC policy statement. Immediate resistance is located at 1.2092 (5-DMA), a break above targets 1.2190 (10-DMA). On the downside, support is seen at 1.1955, a break below could drag it till 1.1910.
USD/JPY: The dollar eased after rising to a near 3-month peak on expectations that the Federal Reserve will keep the benchmark interest rate on hold at its policy meeting ending on Wednesday. However, the central bank looks certain to hike it up next month, given signs of possible acceleration in the U.S. economy. The major was trading 0.1 percent down at 109.77, having hit a high of 109.91 earlier, its highest since Feb. 5. FxWirePro's Hourly Yen Strength Index stood at -1.24 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. ADP employment change and FOMC policy statement. Immediate resistance is located at 110.48 (Feb. 2 High), a break above targets 111.17 (Jan. 23 High). On the downside, support is seen at 109.38 (5-DMA), a break below could take it lower 108.66 (10- DMA).
GBP/USD: Sterling declined, having touched a near 4- month low below the 1.3600 handle in the previous session after survey data showed British manufacturing growth sliding to a 17-month low. Moreover, recent weak economic data further reduced the prospects of a rate hike from the Bank of England when it meets next week. The major traded 0.1 percent down at 1.3603, having hit a low of 1.3588 the day before, it’s lowest since Mar. 1. FxWirePro's Hourly Sterling Strength Index stood at -76.83 (Slightly Bearish) by 0500 GMT. Investors’ focus will remain on the UK construction PMI, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3687, a break above could take it near 1.3749. On the downside, support is seen at 1.3550, a break below targets 1.3510. Against the euro, the pound was trading 0.2 percent down at 88.21 pence, having hit a low of 88.26 pence on Monday, it’s lowest since Mar. 16.
AUD/USD: The Australian dollar steadied after data showed China April factory growth edged up marginally, while export orders eased. The Chinese Caixin Manufacturing PMI came in at 51.1 versus the expected contraction of 50.9 and the previous reading of 51.0. The Aussie trades 0.2 percent up at 0.7503, having hit a low of 0.7472 the day before; it’s lowest since June. FxWirePro's Hourly Aussie Strength Index stood at 6.47 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7457 (June. 6 Low), a break below targets 0.7422 (June 5 Low). On the upside, resistance is located at 0.7543 (5-DMA), a break above could take it near 0.7606 (Apr. 25 High).
NZD/USD: The New Zealand dollar consolidated near 4-month month lows, as the jobless rate declined to a 9-year trough of 4.4 percent but low wage growth left the central bank all but certain to hold rates again next week. The Kiwi trades 0.05 percent up at 0.7007, having touched a low of 0.6990 on Tuesday, its lowest level since Dec. 22. FxWirePro's Hourly Kiwi Strength Index was at 4.19 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7051 (5-DMA), a break above could take it near 0.7157. On the downside, support is seen at 0.6970, a break below could drag it below 0.6940.
Equities Recap
Asian shares nudged down, while the greenback traded near a 4-month high as markets await the Federal Reserve's policy statement for clues on the future pace of U.S. monetary tightening.
MSCI's broadest index of Asia-Pacific shares outside Japan edged down 0.1 percent.
Tokyo's Nikkei eased 0.3 percent to 22,448.14 points, Australia's S&P/ASX 200 index surged 0.6 percent to 6,052.50 points and South Korea's KOSPI declined 0.7 percent to 2,503.85 points.
Shanghai composite index fell 0.4 percent to 3,069.17 points, while CSI300 index was trading 0.2 percent down at 3,749.06 points.
Hong Kong’s Hang Seng was trading 0.5 percent lower at 30,669.59 points. Taiwan shares shed 0.4 percent to 10,618.81 points.
Commodities Recap
Crude oil prices declined, extending previous session losses on surging U.S. supplies, while concerns that the United States may re-impose sanctions on major exporter Iran capped downside. International benchmark Brent crude was trading 0.2 percent down at $73.17 per barrel by 0424 GMT, having hit a high of $75.58 on Monday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.05 percent down at $67.45 a barrel, after rising as high as $69.53 in mid-April, its highest since Nov. 2014.
Gold prices rebounded after declining almost one percent to a 4-month low in the previous session on the back of a stronger U.S. dollar. Spot gold was up 0.5 percent at $1,310.49 per ounce at 0428 GMT, having eased to $1,301.70 on Tuesday, their lowest level since Dec 29. U.S. gold futures GCcv1 for June delivery rose about 0.1 percent to $1,307.60 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.979 percent higher by 0.003 bps, while 5-year yield was 0.001 bps up at 2.820 percent.
The Australian government bond futures slipped, with the three-year bond contract off half a tick at 97.775. The 10-year contract fell 3 ticks to 97.20.
The New Zealand government bonds eased, sending yields 1.5 basis points higher on the long-end of the curve.
The Canadian government bond prices were lower across the yield curve, with the two-year down 8 Canadian cents to yield 1.935 percent and the 10-year falling 34 Canadian cents to yield 2.347 percent.
