Market Roundup
- U.S. Treasury Sec arrives in Beijing for trade talks, China media cautious
- Fed leaves interest rates unchanged, says inflation near goal
- Trump has all but decided to withdraw from Iran nuclear deal –sources
- China says to play positive role as it seeks N. Korea resolution
- Australia Mar Trade Balance G&S (A$), 1,527 mln, f'cast 650 mln, last 825 mln
- Australia Mar Building Approvals, 2.6%, f'cast 1.0%, last -6.2%
- Australia Mar Private House Approvals, 1.1%, f'cast 1.9%, last 3.1%
- UK small manufacturers report record export growth - CBI
- UK's May faces local election losses as key Brexit tests near
- New Zealand job ads fall 2.1 percent in April -ANZ Bank
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Apr Markit/CIPS Serv PMI, f'cast 53.5, last 51.7
- (0500 ET/0900 GMT) Great Britain Apr HICP Flash YY, f'cast 1.3%, last 1.3%
- (0500 ET/0900 GMT) Great Britain Mar Producer Prices MM, f'cast 0.1%, last 0.1%
- (0500 ET/0900 GMT) Great Britain Mar Producer Prices YY, f'cast 2.1%, last 1.6%
Key Events Ahead
- (0300 ET/0700 GMT) Bank of France Governor Villeroy speaks in Paris
- (0400 ET/0800 GMT) Norway Central Bank announces interest rate decision
- (0700 ET/1100 GMT) ECB's Praet speaks at the OECD Chief Economist Talks, Paris
- (0800 ET/1200 GMT) ECB's Vitor Constancio speaks in Frankfurt
- (0830 ET/1230 GMT) ECB's Coeure speaks at Joint ECB/EC conference in Frankfurt
FX Beat
DXY: The dollar index slightly eased from a 4-month peak after the Federal Reserve kept interest rates steady and said inflation was closer to its target and downplayed a recent slowdown in economic and job growth. The greenback against a basket of currencies trades 0.2 percent up at 92.54, having touched a high of 92.83 on Wednesday, its highest since Dec. 28. FxWirePro's Hourly Dollar Strength Index stood at 26.78 (Neutral) by 0500 GMT.
EUR/USD: The euro rebounded from a near 4-month low hit in the previous session, as investors awaited a preliminary reading of the European CPI figures for April, which is expected to remain steady at 1.3 percent year-on-year, while the Core CPI y/y is forecast to tick upwards to 1.2 percent after staying flat 1 percent in the previous month. The European currency traded 0.3 percent up at 1.1987, having touched a low of 1.1937 the day before, its lowest since Jan. 11. FxWirePro's Hourly Euro Strength Index stood at -12.32 (Neutral) by 0500 GMT. Investors’ attention will remain on Eurozone CPI figures, European Central Bank's Vice President Vitor Constancio and Benoît Cœuré’s speech, ahead of the U.S. unemployment benefit claims, factory orders and service PMI's from both Markit and ISM. Immediate resistance is located at 1.2000, a break above targets 1.2050 (5-DMA). On the downside, support is seen at 1.1915 (Jan. 9 Low), a break below could drag it till 1.1880.
USD/JPY: The dollar eased after rising to a 3-month high above the 110.00 handle in the prior session, as the Federal Reserve left its benchmark overnight lending rate in a target range of between 1.50 percent and 1.75 percent. The major was trading 0.2 percent down at 109.63, having hit a high of 110.03 the day before, its highest since Feb. 5. FxWirePro's Hourly Yen Strength Index stood at 4.05 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, factory orders and service PMI's from both Markit and ISM. Immediate resistance is located at 110.48 (Feb. 2 High), a break above targets 111.17 (Jan. 23 High). On the downside, support is seen at 109.23 (May 1 Low), a break below could take it lower 108.92 (10- DMA).
GBP/USD: Sterling steadied after falling to a 3-1/2 month low in the previous session on concerns about Brexit-related risks and fading expectations of a Bank of England interest rate hike next week. The major traded 0.2 percent up at 1.3601, having hit a low of 1.3555 the day before, it’s lowest since Jan. 12. FxWirePro's Hourly Sterling Strength Index stood at -126.68 (Highly Bearish) by 0500 GMT. Investors’ focus will remain on the UK Service PMI, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.3726 (5-DMA), a break above could take it near 1.3792. On the downside, support is seen at 1.3534 (Jan. 12 High), a break below targets 1.3458. Against the euro, the pound was trading 0.1 percent down at 88.11 pence, having hit a low of 88.30 pence on Wednesday, it’s lowest since Mar. 16.
AUD/USD: The Australian dollar extended previous session gains after domestic data showed a better-than-expected rise in the trade surplus for March while that of February was revised higher. The economy's trade balance widened to 1,527 million surplus, surpassing the previous reading of 825 million and expectations of a final reading of 650 million. The Aussie trades 0.4 percent up at 0.7522, having hit a low of 0.7472 on Tuesday; it’s lowest since June. FxWirePro's Hourly Aussie Strength Index stood at 18.82 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7457 (June. 6 Low), a break below targets 0.7422 (June 5 Low). On the upside, resistance is located at 0.7582 (10-DMA), a break above could take it near 0.7620 (Apr. 24 High).
NZD/USD: The New Zealand dollar consolidated near a 4-month low hit in the previous session, as the U.S. Federal Reserve is expected to go for two more rate hikes, while the Reserve Bank of New Zealand predicted a stable outlook. The Kiwi trades 0.4 percent up at 0.7022, having touched a low of 0.6990 on Tuesday, its lowest level since Dec. 22. FxWirePro's Hourly Kiwi Strength Index was at 4.19 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7089 (Apr. 30 High), a break above could take it near 0.7157. On the downside, support is seen at 0.6970, a break below could drag it below 0.6940.
Equities Recap
Asian shares tumbled as hopes waned for progress in U.S.-China trade talks, while the U.S. dollar held firm near recent peaks after the Federal Reserve reaffirmed the outlook for more rate hikes.
MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.5 percent.
Australia's S&P/ASX 200 index surged 0.8 percent to 6,095.70 points and South Korea's KOSPI declined 0.5 percent to 2,492.72 points.
Shanghai composite index rose 0.3 percent to 3,090.40 points, while CSI300 index was trading 0.3 percent up at 3,776.33 points.
Hong Kong’s Hang Seng was trading 1.3 percent lower at 30,331.89 points. Taiwan shares shed 0.9 percent to 10,514.18 points.
Commodities Recap
Crude oil prices rose on efforts by producer cartel OPEC to cut supplies and prop up prices, however, increasing U.S. crude inventories and record weekly U.S. production limited upside. International benchmark Brent crude was trading 0.1 percent up at $73.15 per barrel by 0430 GMT, having hit a high of $75.58 on Monday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.2 percent up at $67.81 a barrel, after rising as high as $69.53 in mid-April, its highest since Nov. 2014.
Gold prices gained, extending gains for a second session ahead of much awaited U.S.-China trade talks, where a breakthrough deal is viewed as highly unlikely. Spot gold rose 0.3 percent to $1,308.94 per ounce at 0438 GMT, having eased to $1,301.70 on Tuesday, their lowest level since Dec 29. U.S. gold futures for June delivery rose 0.4 percent to $1,310.4 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.970 percent higher by 0.006 bps, while 5-year yield was 0.007 bps up at 2.795 percent.
The Australian government bonds traded nearly flat as investors stayed sidelined amid a lack of any major news. However, Friday’s Reserve Bank of Australia (RBA) policy statement will be closely watched to judge future policy action by the central bank. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, trades flat at 2.805 percent, the yield on the long-term 30-year Note dipped nearly 1/2 basis point to 3.227 percent and the yield on short-term 2-year remained steady at 2.069 percent.
The New Zealand bonds jumped at the time of closing, tracking similar movement in the U.S. Treasuries in the overnight session after the Federal Reserve remained on hold at its monetary policy meeting concluded yesterday, as was widely anticipated but the underlying statement did point towards higher inflationary pressures ahead. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, fell 1-1/2 basis points to 2.83 percent, the yield on the long-term 20-year note also slumped 1-1/2 basis points to 3.38 percent and the yield on short-term 2-year closed 1 basis point lower at 1.91 percent.
The Canadian government bond prices were lower across a steeper yield curve, with the two-year down 1 Canadian cent to yield 1.935 percent and the 10-year falling 19 Canadian cents to yield 2.363 percent. The 10-year yield touched its highest intraday since Feb. 15 at 2.387 percent.
