Market Roundup
- Sino-U.S. trade-row impact on China's capital flows can be controlled - regulator
- China says ready to deal with any fallout from U.S. trade row
- China cuts commercial electricity prices by 10 pct to reduce company costs
- Australia Mar Employment, 4.9k, 21k eyed, 17.5k last, -6.3k r'vsd
- Australia Mar Unemployment Rate, 5.5%, 5.5% eyed, 5.6% last, 5.5% r'vsd
- New Zealand Q1 CPI YY 1.1%, 1.1% eyed, 1.6% last
- Trump, Japan's Abe agree to intensify trade talks
- Trump hopes for successful N. Korea summit, but warns he could walk away
- HKMA says has confidence in local currency's peg to U.S. dollar
- Merkel, Macron meet to plot euro zone reform road map
- European Union urges "cool heads" in global trade dispute
Economic Data Ahead
- (0400 ET/0800 GMT) EZ Feb Current Account SA, EUR, 37.6bln last
- (0430 ET/0830 GMT) Great Britain Mar Retail Sales YY, 2.0% eyed, 1.5% last
Key Events Ahead
- (0610 ET/1010 GMT) Bank of England Executive Director, Financial Stability Strategy and Risk, speaks-London
- (0800 ET/1200 GMT) Federal Reserve Board Governor Lael Brainard speaks on "Regulatory Reform" before the 2018 Global Finance Forum-Washington, D.C.
- (0845 ET/1245 GMT) IMF Managing Director Christine Lagarde holds a news conference ahead of the spring meeting of the IMF and World Bank-Washington,D.C.
- (0915 ET/1315 GMT) Bank of England Executive Director,Banking, Payments and Financial Resilience speaks-London
- (0930 ET/1330 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles testifies before a Senate Banking Committee hearing-Washington, D.C.
- (1200 ET/1600 GMT) Governor of Norges Bank Oystein Olsen speaks for the financial markets association-Oslo
- (1230 ET/1630 GMT) Bank of England Deputy Governor for Financial Stability speaks-Washington, D.C.
- (1230 ET/1630 GMT) Eurogroup head Mario Centeno speaks on "Completing the European Project"-Washington, D.C.
- (1700 ET/2100 GMT) UK Finance Minister Philip Hammond and South African President Cyril Ramaphosa speak at a dinner hosted by the City of London Corporation-London
- (1845 ET/2245 GMT) Federal Reserve Bank of Cleveland President Loretta Mester speaks -Pittsburgh, Pennsylvania
- N/A EBRD 3-year USD global benchmark via BNP Paribas, BAML, HSBC, MS.
FX Beat
DXY: The dollar index rose, extending gains for the third consecutive session, supported by higher long-term U.S. Treasury yields. The greenback against a basket of currencies trades 0.1 percent up at 89.66, having touched a low of 89.23 on Tuesday, its lowest since Mar. 27. FxWirePro's Hourly Dollar Strength Index stood at 24.68 (Neutral) by 0500 GMT.
EUR/USD: The euro consolidated within narrow ranges, as diverging interest rate views drove the spread between U.S. and German 10-year government bond yields above 230 basis points, the highest since late December 2016. The European currency traded 0.05 percent up at 1.2377, having touched a high of 1.2413 on Tuesday, its highest since Mar. 28. FxWirePro's Hourly Euro Strength Index stood at 79.82 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on the Eurozone current account figures, ahead of the U.S. unemployment benefit claims, Fed's Brainard, Mester and Quarles 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 1.2355 (5-DMA), a break below could drag it lower 1.2331 (21-DMA).
USD/JPY: The dollar rallied to a 3-day high as U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe agreed to intensify trade consultations between the two longtime allies. However, lingering concerns over U.S.-China trade tensions limited the upside. The major was trading 0.2 percent up at 107.43, having hit a high of 107.77 on Friday, its highest since Feb. 21. FxWirePro's Hourly Yen Strength Index stood at -136.00 (Highly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, Fed's Brainard, Mester and Quarles 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 eased, extending losses for the third straight session, as an unexpected soft reading on UK inflation led the market to reconsider the likely pace of future rate rises from the Bank of England. Moreover, weaker-than-expected UK retail price index also continued to undermine the bid tone around the British pound. The major traded 0.05 percent down at 1.4195, having hit a high of 1.4376 on Tuesday, it’s highest since June 2016. FxWirePro's Hourly Sterling Strength Index stood at -125.91 (Highly Bearish) by 0400 GMT. Investors’ focus will remain on the UK retail sales, ahead of U.S. fundamental drivers and Fed official speeches. Immediate resistance is located at 1.4257 (5-DMA), a break above could take it near 1.4380. On the downside, support is seen at 1.4173 (Previous Session Low), a break below targets 1.4138 (21-DMA). Against the euro, the pound was trading flat at 87.15 pence, having hit a low of 87.22 pence the day before, it’s lowest since Apr. 12.
AUD/USD: The Australian dollar rallied to an over 1-month high after data showed domestic unemployment rate fell to 5.5 percent in March from previous 5.6 percent, in line with estimates. However, a drop in the full-time employment and the downward revision of the previous month's jobs number limited the upside in the major. The Aussie trades 0.3 percent up at 0.7805, having hit a high of 0.7812; it’s highest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at 169.72 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7739 (Apr. 11 Low), a break below targets 0.7717 (21-DMA). On the upside, resistance is located at 0.7819 (Feb. 28 high), a break above could take it near 0.7842 (Mar. 6 High).
NZD/USD: The New Zealand dollar rebounded after falling to a 1-week low in the previous session on data that showed the consumer price index fell to 1.5 year low of 1.1 percent in the first quarter and neared the lower end of the RBNZ target range of 1 to 3 percent. The Kiwi trades 0.2 percent up at 0.7327, having touched a low of 0.7303 the day before, its lowest level since Apr. 10. FxWirePro's Hourly Kiwi Strength Index was at -26.67 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7372 (Apr. 17 High), a break above could take it near 0.7409 (Feb. 19 High). On the downside, support is seen at 0.7303 (Previous Session Low), a break below could drag it below 0.7286 (21-DMA).
Equities Recap
Asian shares rallied, boosted by resource stocks as oil prices hit its highest since late 2014, while the greenback rose as the 10-year Treasury note yield climbed more than 5 basis points overnight for its biggest one-day surge since March 2.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 percent.
Tokyo's Nikkei rose 0.2 percent to 22,191.18 points, Australia's S&P/ASX 200 index surged 0.3 percent to 5,881.00 points and South Korea's KOSPI advanced 0.2 percent to 2,485.57 points.
Shanghai composite index gained 0.8 percent to 3,113.70 points, while CSI300 index was trading 1.03 percent up at 3,805.14 points.
Hong Kong’s Hang Seng was trading 1.1 percent higher at 30,614.54 points. Taiwan shares added 1.1 percent to 10,971.22 points.
Commodities Recap
Crude oil prices rallied, hovering towards 2014-highs as U.S. crude inventories declined and as top exporter Saudi Arabia pushes for prices of $80 to $100 per barrel by continuing to withhold supplies. International benchmark Brent crude was trading 0.2 percent up at $73.89 per barrel by 0441 GMT, having hit a high of $73.97 earlier, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.1 percent up at $68.82 a barrel, after rising as high as $68.93 earlier, its highest since Nov. 2014.
Gold prices rose for the fifth consecutive session, as lingering U.S.-China trade tensions kept the greenback's gains in check. Spot gold was trading at 0.1 percent up at $1,351.52 per ounce at 0446 GMT, having hit a high of $1,365.16 an ounce last week, its highest since Jan. 25. U.S. gold futures fell 0.1 percent to $1,352 per ounce.
Treasuries Recap
The Japanese government bonds edged lower as investors shifted to riskier assets including oil and equities. Investors are now awaiting Japan’s national consumer price inflation (CPI) data for the same period, due today by 23:30GMT. The yield on the benchmark 10-year JGBs, which moves inversely to its price, rose 1/2 basis point to 0.04 percent, the yield on the long-term 30-year note also edged slightly higher to 0.70 percent and the yield on short-term 2-year traded 1 basis point higher at -0.13 percent.
The New Zealand government bonds slumped at the time of closing after the country’s consumer price inflation (CPI) for the first quarter of this year, topped market expectations, which added bearishness to the safe-haven debt market. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, jumped 2-1/2 basis points to 2.86 percent, the yield on the long-term 20-year note edged tad higher to 3.44 percent and the yield on short-term 2-year closed 1/2 basis point up at 1.96 percent.
The Australian government bonds slumped despite March employment report disappointed investors, but it follows the weakness in the U.S. Treasuries. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 2-1/2 basis points to 2.771 percent, the yield on the long-term 30-year Note jumped 2-1/2 basis points to 3.344 percent and the yield on short-term 2-year also surged nearly 1/2 basis point to 2.121 percent.
The Canadian government bond prices were mixed across the yield curve, with the two-year flat to yield 1.885 percent and the 10-year falling 28 Canadian cents to yield 2.282 percent. The two-year yield reached its highest intraday level since June 2011 at 1.920 percent, before the Bank of Canada announcement.
