Market Roundup
- Top U.S. officials to hold trade talks in China next week
- Treasury's Mnuchin misses congressional deadline to hand over Trump tax returns
- China to recalibrate Belt and Road, defend scheme against criticism
- Australia Q1 CPI Index, 114.1, 114.1 prev
- Australia Q1 CPI QQ, 0.0%, 0.2% f'cast, 0.5% prev
- Australia Q1 CPI YY, 1.3%, 1.5% f'cast, 1.8% prev
Economic Data Ahead
- (0400 ET/0800 GMT) Germany Apr Ifo Business Climate New, 99.9 f'cast, 99.6 prev
- (0400 ET/0800 GMT) Germany Apr Ifo Curr Conditions New, 103.6 f'cast, 103.8 prev
Key Events Ahead
- (0915 ET/1315 GMT) British Finance Minister Philip Hammond speaks to lawmakers on parliament's Treasury Committee about the Spring Statement budget update he announced in March in London
- (1000 ET/1400 GMT) Bank of Canada to announce its key policy interest rate and Monetary Policy Report in Ottawa
- (1115 ET/1515 GMT) Bank of Canada Governor Stephen Poloz and Bank of Canada Senior Deputy Governor Carolyn Wilkins will hold a press conference to discuss the content of the Monetary Policy Report in Ottawa
FX Beat
DXY: The dollar index surged after overnight data showed U.S. sales of new single-family homes jumped to a near 1-1/2-year high in March added to recent positive readings. The greenback against a basket of currencies traded 0.1 percent up at 97.70, having touched a high of 97.78 on Tuesday, its highest since June. 2017. FxWirePro's Hourly Dollar Strength Index stood at 39.91 (Neutral) by 0500 GMT.
EUR/USD: The euro eased, hovering towards a 3-week low touched in the previous session, amid worries about the heavily indebted Italian economy's weak growth and concerns about a growing budget deficit that raised fears about Italy's ratings outlook. The European currency traded 0.1 percent down at 1.1217, having touched a low of 1.1192 on Tuesday, its lowest since Apr. 2. FxWirePro's Hourly Euro Strength Index stood at 44.22 (Neutral) by 0500 GMT. Investors’ attention will remain on the German Ifo survey, amid a lack of significant economic data from the U.S. docket. Immediate resistance is located at 1.1287 (Apr. 10 High), a break above targets 1.1331 (Mar. 25 High). On the downside, support is seen at 1.1176 (Mar. 7 Low) a break below could drag it till 1.1154.
USD/JPY: The dollar declined, extending previous session losses, as investor risk sentiment weakened on concerns that Beijing may slow the pace of policy easing following stronger-than-expected first-quarter economic growth. The major was trading 0.05 percent down at 111.80, having hit a low of 111.65 on Tuesday, its lowest since Apr. 12. FxWirePro's Hourly Yen Strength Index stood at 20.85 (Neutral) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, as U.S. economic calendar remains absolutely data empty. 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 steadied after plunging to a 2-month low amid fading hopes for a breakthrough in Brexit talks between the ruling Conservative party and the opposition Labour party. The major traded 0.1 percent up at 1.2937, having hit a low of 1.2926 earlier; it’s lowest since Feb. 19. FxWirePro's Hourly Sterling Strength Index stood at -17.27 (Neutral) 0500 GMT. Investors’ attention will remain on the UK fundamental drivers, amid a lack of data from the U.S. docket. Immediate resistance is located at 1.2984 (5-DMA), a break above could take it near 1.3026 (10-DMA). On the downside, support is seen at 1.2891 (Feb. 18 Low), a break below targets 1.2832 (Feb. 12 Low). Against the euro, the pound was trading 0.1 percent up at 86.68 pence, having hit a low of 86.81 on Tuesday, it’s lowest since Mar. 22.
AUD/USD: The Australian dollar slumped to a 6-week low, as soft domestic inflation reinforced prospects of monetary easing. The economy's inflation slowed sharply last quarter to the lowest in three years on weak petrol prices and a stubborn lack of wage pressure, strengthening the case of an interest rate cut likely as soon as May. The Aussie trades 0.9 percent down at 0.7037, having hit a low of 0.7027 earlier; it’s lowest since Mar. 11. FxWirePro's Hourly Aussie Strength Index stood at -46.70 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7003 (Mar. 8 Low), a break below targets 0.6981 (Jan. 2 Low). On the upside, resistance is located at 0.7131 (Apr. 1 High), a break above could take it near 0.7174 (Apr. 10 High).
NZD/USD: The New Zealand dollar tumbled to a 4-month low amid worries that China has put any further stimulus on hold as the Chinese economy shows signs of regaining momentum. The Kiwi trades 0.5 percent down at 0.6620, having touched a low of 0.6613, its lowest level Jan. 3. FxWirePro's Hourly Kiwi Strength Index was at -49.95 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6694 (Apr. 19 High), a break above could take it near 0.6758 (Apr. 9 High). On the downside, support is seen at 0.6585 (Jan. 3 Low), a break below could drag it below 0.6514 (Nov. 1 Low).
Equities Recap
Asian shares plunged amid concerns that Beijing may slow the pace of policy easing after the growth data reduced the urgency for action.
MSCI's broadest index of Asia-Pacific shares outside Japan consolidated fell 0.5 percent.
Tokyo's Nikkei declined 0.3 percent to 22,200.00 points, Australia's S&P/ASX 200 index rose 0.9 percent to 6,382.10 points and South Korea's KOSPI eased 0.8 percent to 2,201.05 points.
Shanghai composite index fell 0.05 percent to 3,198.50 points, while CSI 300 index traded 0.1 percent up at 4,023.94 points.
Hong Kong’s Hang Seng traded 0.4 percent lower at 29,841.78 points. Taiwan shares added 0.1 percent to 11,027.64 points
Commodities Recap
Crude oil prices declined after rising to a near 6-month peak amid signs that global markets remain adequately supplied. International benchmark Brent crude was trading 0.3 percent lower at $74.13 per barrel by 0459 GMT, having hit a high of $74.71 on Tuesday, its highest since Nov. 1, 2018. U.S. West Texas Intermediate was trading 0.3 percent down at $65.93 a barrel, after rising as high as $66.58 on Tuesday, its highest since the Oct. 31, 2018.
Gold prices slumped, hovering towards a 4-month low touched in the previous session, as the greenback gained after strong U.S. housing data dampened concerns about an economic slowdown in the country. Spot gold was trading 0.2 percent down at $1,269.90 per ounce by 0502 GMT, having touched a low of $1,266.18 on Tuesday, its lowest since Dec. 27. U.S. gold futures were 0.2-percent lower at $1,270.70 an ounce.
Treasuries Recap
The U.S. benchmark 10-year Treasury notes yielded 2.5596 percent compared with a U.S. close of 2.57 percent on Tuesday, while the two-year yield slipped to 2.3496 percent, compared with a U.S. close of 2.364 percent.
The Japanese government bond prices edged higher, with the five-year JGB yield falling half a basis point to minus 0.160 percent. The 10-year yield declined 1 basis point to minus 0.045 percent and the 30-year yield fell 1.5 basis points to 0.555 percent.
The Australian three-year bond contract surged to a record high of 98.750 sending yields below the cash rate to 1.25 percent.
The New Zealand government bonds were slightly higher with yields down about 5 basis points at the long end of the curve.
The Canadian government bond prices were higher across the yield curve. The two-year rose 8.5 Canadian cents to yield 1.576 percent and the 10-year was up 27 Canadian cents to yield 1.758 percent. Canada's two-year yield fell 1.9 basis points further below the yield on the equivalent U.S. bond to a spread of -78.8 basis points, its widest since March 22.
