Market Roundup
- Japan PM Abe – We must definitely avoid competitive FX devaluation, refrain from arbitrary intervention, FX stability important.
- Japan LDP Yamamoto – Consumer spending similar to post-Lehman crisis period, Japan should lower and not up sales tax, ChiefCabSec Suga disagrees.
- Japan Inc busier issuing USD bonds – Mizuho $4 bln 5-yr, ORIX 5-yr.
- China March Caixin services PMI 52.2, Feb 51.2 but full employment down to 48.9, first contraction since August ’13.
- Concerns grow as China SAFE joins national team tasked with propping up stock market – South China Morning Post.
- China GDP to slow to 6.6% in Q1, long “zombie” battle ahead – Nikkei.
- Ted Cruz wins Wisconsin Republican primary, Saunders Democratic – media.
- BoC Dep Gov Wilkins – China slowing to more sustainable pace is inevitable and desirable, problems possible.
- New Zealand March QV residential property index +11.4% y/y, +35% above previous ’07 peak.
Economic Data Ahead
- (0410 ET/0810 GMT) Euro retail PMI, previous 50.1.
Key Events Ahead
- N/A Sweden SEK10 and 5 bln 103 and 166 Treasury bill auctions.
- N/A Norway NOK3 bln 1.5% NST478 2026 government bond auction.
- (0315 ET/0715 GMT) SNB press conference on new CHF50 note.
- (0510 ET/0910 GMT) Greece E875 mln 26-week Treasury bill auction.
- (0600 ET/1000 GMT) Riksbank Gov Ingves speech in Stockholm.
- (0630 ET/1030 GMT) Germany E4 bln zero% 2018 Schatz auction.
- N/A New York Women in the World Summit, IMF Lagarde to speak (till tom).
- (1220 ET/1620 GMT) Cleveland Fed Mester speech at Cleveland luncheon.
- (1400 ET/1800 GMT) FOMC March meeting minutes.
- (1830 ET/2230 GMT) St Louis Fed Bullard speaks at St Louis event.
FX Recap
USD: The dollar hovered near a 17-month low against the yen on Wednesday after taking a fresh knock overnight on comments by Japan's prime minister which suggested that authorities were cautious towards arresting the yen's appreciation. The dollar has lost more than one percent against the yen so far this week, and appears on track to post its third weekly loss in four.
EUR/USD: The euro managed to touch a 5-1/2-month high of $1.1438 last Friday after U.S. central bank chair Janet Yellen indicated she was in no hurry to tighten monetary policy last week. Pair remains well supported below $1.14 marks and trading around $1.1370 mark. Intraday bias remains bearish till the time pair holds key resistance level at $1.1402. A daily close above key resistance at 1.1402 will drag the parity up towards $1.1469 marks. On the down side, key support level is seen at $1.1159/ $1.1057 marks.
USD/JPY: The Japanese Yen erases previous gain against US dollar and recovers from October 2014 low. Pair is currently trading around 110.34 levels. A daily close below key support level at 109.94 will drag the parity down towards at 108.75/107.51 marks thereafter. On the top side, key resistance levels are seen at 112.60/114.87/115.96 levels.
GBP/USD: The Sterling skidded to its weakest against the euro since September 2014 on Wednesday; while the cost of hedging against volatility against the dollar over the next three months hit a six-year high on worries Britain could vote to leave the EU in June. Pair breaks key support at $1.4216 marks and trading around $1.4174 levels. A sustained break below key support $1.4108 level will drag the parity down at $1.4057 marks. A daily close above $1.4357 will take the parity up towards key resistances at $1.4504/$1.4602.
AUD/USD: The Australian dollar staged a modest bounce on the back of a rebound in commodity prices, rising 0.3 percent to $0.7565 after losing 0.7 percent overnight. The Aussie was hurt earlier this week by a dent in global risk appetite and slide in commodities. Intraday bias remains bullish till the time pair holds key support at $0.7510 levels. On the other side, a sustained close above $0.7672 will drag the parity up towards $0.7725 levels. On the downside, a sustained break below $0.7433 support levels will turn bias back to the downside for retesting 0.7365 low.
NZD/USD: The Kiwi edged up against the US dollar and remains supported above $0.68 marks. Other commodity-linked currencies also benefited as crude oil rebounded from one-month lows. Short term bias remains bullish till the time pair holds key support at $0.6758. Key support was found at $0.6750, with resistance at $0.7002 levels.
Equities Recap
Japan's Nikkei 225 index rose 0.28% to 15,777.75 points and the broader Topix index tracked 0.81% lower to 1,258.08 points.
Hong Kong's Hang Seng index was trading flat at 20,189.00 points, while the Shanghai Composite fell 0.45% to 3,039.35 points, and South Korea's Kospi index traded 0.35% higher at 1,969.04 points.
Australia's benchmark S&P/ASX 200 index gained 0.56% to trade at 4,952.00 points in Sydney on Wednesday morning.
New Zealand's S&P/NZX 50 index fell 0.26% to 6,698.14 points in Wellington on Wednesday afternoon.
Commodities Recap
Crude futures jumped on Wednesday as hopes for an agreement among exporters to freeze output underpinned the market, although a persistent global oversupply and Iran's plans to boost production pressured physical oil prices. U.S. crude futures jumped around a dollar, or 2.8 percent, to $36.87 per barrel at 0419 GMT. International Brent futures rose 1.8 percent at $38.55 a barrel.
Gold held sharp overnight gains on Wednesday as disappointing global economic data and a tumble in equities sent investors scurrying towards the safe-haven metal. Investors were awaiting the release of the minutes of the Federal Reserve's March policy meeting, due later in the session, to gauge the outlook of the U.S. central bank's monetary policy. Spot gold was little changed at $1,229.60 an ounce by 0324 GMT on profit-taking, but retained most of its 1.3-percent gain from Tuesday.
Treasuries Recap
BOJ offers to lend Y23.6 bln of JGBs on spot basis through 4/7 as a secondary source of JGBs.
China finance ministry auctions 1-year bonds at 2.1026 pct yield (market expected 2.06 pct). China finance ministry auctions 10-year bonds at 2.8632 pct yield (market expected 2.84 pct).
South Korea Central bank says sells 2-year monetary stabilisation bonds at yield of 1.46 pct.
