Market Roundup
- Oil steadies as China imports rebound
- Gold gains as weak economic data
- Australia trade surplus surges to record on gold rush
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Retail Sales s.a. (MoM)(Mar)
- (0400 ET/0800 GMT) Italy Retail Sales n.s.a (YoY)(Mar)
Key Events Ahead
- No Significant Events Scheduled
FX Beat
DXY: The dollar index held firm near a 1-1/2 week peak, as U.S. Secretary of State Mike Pompeo renewed his aggressive criticism of China. The greenback against a basket of currencies traded 0.05 percent up at 100.20, having touched a low of 98.57 on Monday, its lowest since Mar. 30.
EUR/USD: The euro declined, hovering towards a near 2-week low hit in the previous session after a court decision challenged German participation in the euro zone's stimulus programme. On Tuesday, Germany’s highest court gave the European Central Bank three months to justify purchases under its bond-buying programme, or lose the Bundesbank’s participation in one of its main stimulus schemes. The European currency traded 0.05 percent down at 1.0789, having touched a low of 1.0782 on Wednesday, its lowest since April 24. Investors’ attention will remain on a series of economic data from the Eurozone economies, ahead of the U.S. unemployment benefit claims and consumer credit change. Immediate resistance is located at 1.0818, a break above targets 1.0838. On the downside, support is seen at 1.0768, a break below could drag it below 1.0730.
USD/JPY: The dollar rose, halting a 4-day losing streak after data showed China's exports rose 3.5 percent in April on a year earlier, confounding expectations of a 15.1 percent fall and outweighing a 14.2 percent drop in imports. Investors now await the U.S. weekly initial jobless claims data due later in the day for further direction, while keeping a close watch on developments surrounding U.S.-China relations after President Donald Trump threatened new tariffs on Beijing. The major was trading 0.2 percent up at 106.33, having hit a low of 105.98 on Wednesday, its lowest since Mar. 17. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. ADP employment change. Immediate resistance is located at 106.67 (5-DMA), a break above targets 106.90 (10-DMA). On the downside, support is seen at 105.76, a break below could take it near at 105.34.
GBP/USD: Sterling rebounded from a near 2-week low after Bank of England stated that top banks and building societies could keep lending to an economy hit by anticipated fallout from the coronavirus pandemic. Prime Minister Boris Johnson said that his government would set out details of its plan to ease a lockdown against the coronavirus on Sunday, raising hopes that some measures could come into force the next day. The major traded 0.1 percent up at 1.2355, having hit a low of 1.2310 earlier, it’s lowest since April 24. Investors’ attention will remain on the geopolitical developments ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.2411, a break above could take it near 1.2431 (10-DMA). On the downside, support is seen at 1.2298, a break below targets 1.2274. Against the euro, the pound was trading flat at 87.36 pence, having hit a low of 88.14 on Monday, it’s lowest since April 22.
AUD/USD: The Australian dollar rose, reversing most of its previous session losses after data showed domestic trade surplus surged to a record in March as shipments of iron ore to China increased, while exports of gold more than tripled amid a global rush for the safe-haven metal. The economy's trade surplus swelled 174 percent to A$10.6 billion ($6.79 billion) in March, easily the fattest on record and far above forecasts of A$6.8 billion. The Aussie trades 0.7 percent up at 0.6443, having hit a low of 0.6372 on Monday, it’s lowest since Apr. 24. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate resistance is located at 0.6487, a break above could take it near 0.6512. On the downside, support is seen at 0.6372, a break below targets 0.6337.
Equities Recap
Asian shares trimmed early session losses after Chinese exports proved far stronger than expected.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.3 percent.
Tokyo's Nikkei gained 0.3 percent to 19,674.77 points, Australia's S&P/ASX 200 index fell 0.4 percent to 5,364.20 points. South Korea's KOSPI eased 0.05 percent to 1,928.56 points.
Shanghai composite index declined 0.3 percent to 2,869.74 points, while CSI 300 index traded 0.3 percent down at 3,923.17 points.
Hong Kong’s Hang Seng traded 0.6 percent lower at 23,988.01 points. Taiwan shares added 0.6 percent to 10,842.92 points.
Commodities Recap
Crude oil prices steadied as data showed China’s crude imports rebounded, but market watchers predicted gains could be capped by the ongoing glut in supplies as the coronavirus pandemic crushes global fuel demand. International benchmark Brent crude was trading 0.2 percent lower at $29.76 per barrel by 0544 GMT, having hit a high of $32.20 on Wednesday, its highest since April 14. U.S. West Texas Intermediate was trading 0.1 percent down at $25.47 a barrel, after rising as high as $27.95 on Wednesday, its highest since April 9.
Gold prices surged as downbeat economic data raised doubts about a recovery in the coronavirus-hit global economy even though some countries started to ease lockdown restrictions. Spot gold rose 0.3 percent to $1,689.65 per ounce by 0550 GMT, having touched a low of $1,670.90 on Friday, its lowest since Apr. 21. U.S. gold futures rose 0.4 percent to $1,694.50 per ounce.
Treasuries Recap
On Wednesday, the benchmark 10-year note yields jumped 6 basis points to 0.714 percent, after earlier reaching 0.743 percent, the highest since April 15. Thirty-year bond yields rose 9 basis points to 1.420 percent, after getting as high as 1.446 percent, the highest since March 26. The yield curve between two-year and 10-year notes steepened to 53 basis points, from 47 basis points on Tuesday, and the curve between five-year notes and 30-year bonds steepened to 104 basis points, from 96 basis points.
