Market Roundup
- U.S.: China reneged on trade commitments, sparking Trump tariff hike
- Australia central bank holds rates at 1.5 pct
- RBA says expects economy to grow at 2.75 pct in 2019, 2020
- Australia Mar Retail Sales MM, 0.3%, 0.2% f'cast, 0.8% prev, 0.9% rvsd
- Australia Q1 Retail Trade, -0.1%, 0.3% f'cast, 0.1% prev
- Australia Trade Balance G&S (A$) 4,949 mln, 4,300 mln f'cast, 4,801 mln prev, 5,140 mln rvsd
- U.S. Democrats edge toward court battles over Mueller, Trump's taxes
- Pentagon says U.S. carrier, bombers sent to Middle East on 'credible threat' by Iran
- Japan Apr Nikkei Mfg PMI, 50.2, 49.5 prev
- New Zealand two-year inflation expectations 2.01 pct for Q2 - RBNZ
Economic Data Ahead
- (0245 ET/0645 GMT) France Mar Trade Balance, EUR, SA, -4.00 bln prev
- (0330 ET/0730 GMT) Great Britain Apr Halifax House Prices MM, 0.1% f'cast, -1.6% prev
Key Events Ahead
- (0230 ET/0630 GMT) French Finance Minister Bruno Le Maire hosts a high-level forum on debt, with IMF Managing Director Christine Lagarde, Japan Finance Minister Taro Aso in Paris, France
- (0330 ET/0730 GMT Swedish Central Bank minutes from the monetary policy meeting will be published in Stockholm
- (0520 ET/0920 GMT) Bank of England Deputy Governor Jon Cunliffe speaks at CFO Agenda 2019 in London
- (0615 ET/1015 GMT) Governor of the Swedish National Bank Stefan Ingves will hold a speech at the Swedish Economics Association in Stockholm
- (1135 ET/1535 GMT) Federal Reserve Vice Chair Randal Quarles to speak at Yale University on financial regulation in New Haven
- (1230 ET/1630 GMT) Bank of England Chief Economist and Executive Director, Monetary Analysis & Statistics, Andy Haldane give speech at Sheffield Political Economy Research Institute Annual Lecture 2019 in London
FX Beat
DXY: The dollar index plunged to a near 1-week low after the Federal Reserve in its latest report on financial stability flagged high U.S. business debt and asset prices. The greenback against a basket of currencies traded 0.1 percent down at 97.42, having touched a low of 97.38 earlier, its lowest since May 1. FxWirePro's Hourly Dollar Strength Index stood at -115.99 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro surged, extending previous session gains, after outgoing European Central Bank chief economist Peter Praet stated that the ECB must have a monetary policy case if it is to consider a multi-tier deposit rate. The European currency traded 0.1 percent up at 1.1211, having touched a low of 1.1135 on Friday, its lowest since Apr. 26. FxWirePro's Hourly Euro Strength Index stood at 10.60 (Neutral) by 0500 GMT. Investors’ attention will remain on data from Eurozone economies, ahead of the U.S. JOLTS Job Opening and Fed Quarles' speech. Immediate resistance is located at 1.1229 (April 30 high), a break above targets 1.1262 (April 22 High). On the downside, support is seen at 1.1140 (April 24 Low) a break below could drag it till 1.1096 (May. 2017 Low).
USD/JPY: The dollar declined, hovering towards a 5-1/2 week low hit in the prior session, as worries about U.S.-China trade tensions rekindled fears about the outlook for global growth. On Monday, top U.S. trade officials stated that China backtracked on substantial commitments it made during trade talks, prompting President Donald Trump to impose additional tariffs on Chinese goods slated to go into effect on Friday. The major was trading 0.1 percent down at 110.62, having hit a low of 110.28 on Monday, its lowest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at 62.11 (Bullish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. JOLTS Job Opening and Fed Quarles' speech. Immediate resistance is located at 111.07 (Feb. 27 High), a break above targets 111.46 (Mar. 12 High). On the downside, support is seen at 110.01 (Mar.28 Low), a break below could take it lower at 109.70 (Mar. 25 Low).
GBP/USD: Sterling rose above the 1.3100 handle, amid speculations that the opposition Labour party and PM Theresa May have enough support to ignore backbenchers and get their Brexit deal through the UK parliament. The major traded at 0.2 percent up 1.3123, having hit a high of 1.3176 on Friday; it’s highest since Apr. 4. FxWirePro's Hourly Sterling Strength Index stood at 35.86 (Neutral) 0500 GMT. Investors’ attention will remain on the UK Halifax house prices and Brexit headlines, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3176 (May 3 High), a break above could take it near 1.3223 (Mar. 22 High). On the downside, support is seen at 1.3060 (April 4 Low), a break below targets 1.3022 (Apr. 8 Low). Against the euro, the pound was trading 0.1 percent up at 85.43 pence, having hit a high of 84.88 on Monday, it’s highest since Mar. 27
AUD/USD: The Australian dollar rallied to a near 1-week peak after the Reserve Bank of Australia left its cash rate at 1.5 percent, confounding speculation it may ease policy following downbeat reading of inflation. On Monday, the major plunged to a 4-month low in response to the renewed tensions between Beijing and Washington. The Aussie trades 0.7 percent up at 0.7035, having hit a low of 0.6962 the day before, it’s lowest since Jan. 3. FxWirePro's Hourly Aussie Strength Index stood at 150.11 (Highly Bullish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.6950, a break below targets 0.6921. On the upside, resistance is located at 0.7069 (Apr. 30 High), a break above could take it near 0.7110 (Mar. 19 High).
NZD/USD: The New Zealand dollar rebounded after falling to a near 2-week low earlier in the session on data that showed the economy's two-year inflation expectations eased slightly in the second quarter to 2.01 percent. The Kiwi trades 0.2 percent up at 0.6615, having touched a low of 0.6591 earlier, its lowest level Apr. 25. FxWirePro's Hourly Kiwi Strength Index was at -80.22 (Slightly Bearish) 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 0.6562, a break below could drag it below 0.6514 (Nov. 1 Low).
Equities Recap
Asian shares rebounded from 5-week lows but remained fragile after U.S. President Donald Trump's latest threat to raise tariffs on Chinese goods rattled financial markets.
MSCI's broadest index of Asia-Pacific shares outside Japan rallied 0.5 percent.
Tokyo's Nikkei fell 1.6 percent to 21,894.40 points, Australia's S&P/ASX 200 index gained 0.3 percent to 6,301.80 points and South Korea's KOSPI declined 1.05 percent to 2,173.40 points.
Shanghai composite index declined 0.05 percent to 2,905.73 points, while CSI 300 index traded 0.3 percent up at 3,696.59 points.
Hong Kong’s Hang Seng traded 0.05 percent lower at 29,207.14 points. Taiwan shares added 0.8 percent to 10,987.14 points
Commodities Recap
Crude oil prices declined, amid growing concerns the escalating U.S.-China trade dispute could slow the global economy, however, U.S. sanctions on crude exporters Iran and Venezuela limited the downside. International benchmark Brent crude was trading 0.2 percent lower at $71.26 per barrel by 0447 GMT, having hit a low of $68.82 on Monday, its lowest since Apr, 3. U.S. West Texas Intermediate was trading 0.2 percent down at $62.44 a barrel, after falling as low as $60.02 on Monday, its lowest since the Mar, 29.
Gold prices rose, extending gains for the third straight session, as U.S. President Donald Trump's threat to hike tariffs on Chinese imports re-kindled trade tensions between the two countries. Spot gold was trading 0.2 percent up at $1,282.84 per ounce by 0457 GMT, having touched a high of $1,285.73 on Monday, its highest since May 1. U.S. gold futures were unchanged at $1,283.90 an ounce.
Treasuries Recap
The Japanese government bond prices gained across the board, with the 5-year and 10-year JGB yields each declining by a basis point to minus 0.180 percent and minus 0.060 percent, respectively. The 30-year yield dropped 2 basis points to 0.540 percent.
The Australian government bond futures eased, with the three-year contract off 8.5 ticks at 98.685. The 10-year contract fell 5 ticks to 98.2000. Yields on three-year bonds rose to 1.31 percent, having touched an all-time low of 1.23 percent on Monday.
The Canadian government bond prices were higher across a flatter yield curve. The two-year rose 3.5 Canadian cents to yield 1.624percent and the 10-year gained 26 Canadian cents to yield 1.737 percent. The 10-year yield touched on Friday its highest intraday since April 23 at 1.790 percent.
