Market Roundup
- European powers say they are nearing plan to save Iran nuclear pact
- S. Korea's Moon to meet N. Korea's Kim at border for summit
- Australia Q1 Export Prices, 4.9%, last 2.8%
- Australia Q1 Import Prices, 2.1%, last 2.0%
- U.S. Congress girds for fight over expected Trump spending cuts
- Moody's affirms United States' top-notch credit rating
- Canada sees progress on NAFTA auto rules; steel tariffs loom
- Bank of Canada governor says economy is 'finally positive'
- Fitch Affirms Japan At 'A' Outlook Stable
- South Korean economy rebounds in Q1 on exports, govt spending
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Q1 Unemployment Rate, f'cast 16.20%, last 16.55%
- (0430 ET/0830 GMT) UK Mar UK Finance Mortgage Apps, last 38.120k
- (0600 ET/1000 GMT) UK Apr CBI Distributive Trades, f'cast 5, last -8
- (0745 ET/1145 GMT) EZ Apr ECB Refinancing Rate, f'cast 0.00%, last 0.00%
- (0745 ET/1145 GMT) EZ Apr ECB Deposit Rate, f'cast -0.40%, last -0.40%
- (1901 ET/2301 GMT) UK Apr GfK Consumer Confidence, f'cast -7, last -7
Key Events Ahead
- N/A Bank of Japan holds Monetary Policy Meeting (to April 27) - Tokyo
- (0330 ET/0730 GMT) Riksbank interest rate decision and monetary policy report - Stockholm
- (0415 ET/0815 GMT) BoE's David Rule will speak at 2018 Conference on Bulk Annuities and Longevity Risk Transfer - London
- (0430 ET/0830 GMT) BoE's Alex Brazier will participate in London Business School's Asset Management Conference 2018 – London
- (0500 ET/0900 GMT) Riksbank's Stefan Ingves, Jesper Hansson will participate in a press conference on the interest rate decision - Stockholm
- (0745 ET/1145 GMT) ECB Governing Council meeting, followed by interest rate announcement - Frankfurt
- (0830 ET/1230 GMT) ECB's Mario Draghi holds a press conference after an interest rate meeting - Frankfurt
FX Beat
DXY: The dollar index slightly edged down after rallying to a 3-1/2 month high in the previous session on rising U.S. Treasury yields, while investors eyed the U.S. GDP figures due on Friday. The greenback against a basket of currencies trades 0.1 percent down at 91.14, having touched a high of 91.26 the day before, its highest since Jan. 12. FxWirePro's Hourly Dollar Strength Index stood at 136.37 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro rebounded from a near 2-month low touched in the previous session, as investors expect the European Central Bank to keep policy unchanged at its rates review due later, and leave the door open to end its bond purchase program by the end of the year. The European currency traded 0.1 percent up at 1.2176, having touched a low of 1.2159 the day before, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at -34.59 (Neutral) by 0400 GMT. Investors’ attention will remain on ECB interest rate decision, ahead of the U.S. unemployment benefit claims, wholesale inventories, good trade balance and durable goods orders. Immediate resistance is located at 1.2246 (5-DMA), a break above targets 1.2290 (Apr. 6 High). On the downside, support is seen at 1.2154 (Mar. 1 Low), a break below could drag it lower 1.2100.
USD/JPY: The dollar edged down after rising to an 11-week peak earlier in the day, bolstered by higher U.S. Treasury yields, with the 10-year benchmark breaching the 3 percent level for the first time in four years. The major was trading 0.1 percent down at 109.34, having hit a high of 109.46 earlier, its highest since Feb. 8. FxWirePro's Hourly Yen Strength Index stood at -56.62 (Bearish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, wholesale inventories, good trade balance and durable goods orders. Immediate resistance is located at 109.75 (Feb. 1 High), a break above targets 110.28 (Feb. 2 High). On the downside, support is seen at 108.38 (5-DMA), a break below could take it lower 107.78 (10- DMA).
GBP/USD: Sterling traded near 5-week lows, weighed down by a stronger U.S. dollar, a slew of economic figures that have missed the forecast, and an uncertain Bank of England. Investors remain cautious ahead of British first-quarter economic growth numbers due on Friday and the BoE's Monetary Policy Committee meeting early next month. The major traded 0.1 percent up at 1.3942, having hit a low of 1.3918 on Tuesday, it’s lowest since Mar. 19. FxWirePro's Hourly Sterling Strength Index stood at 57.81 (Bullish) by 0400 GMT. Investors’ focus will remain on the UK CBI Distributive Trades survey, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.4031 (Apr. 23 High), a break above could take it near 1.4110 (21-DMA). On the downside, support is seen at 1.3910, a break below targets 1.3874 (Mar. 13 Low). Against the euro, the pound was trading 0.05 percent down at 87.32 pence, having hit a high of 87.27 pence on Wednesday, it’s highest since Apr. 19.
AUD/USD: The Australian dollar steadied near 4-month lows after data showed domestic import price index rose 2.1 percent in the first quarter from 2.0 percent, while export price index increased 4.9 percent from a prior reading of 2.8 percent. The Aussie trades 0.1 percent up at 0.7573, having hit a low of 0.7552; it’s lowest since Dec. 13. FxWirePro's Hourly Aussie Strength Index stood at -80.21 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7519 (Dec. 12 Low), a break below targets 0.7501 (Dec 8 Low). On the upside, resistance is located at 0.7634 (5-DMA), a break above could take it near 0.7680.
NZD/USD: The New Zealand dollar tumbled to a 4-month low as rising Treasury yields supported its U.S. counterpart. Investors now await New Zealand's March Trade Balance, which is expected to print at $200 million, a slight decline from the previous figure's $217 million trade surplus. The Kiwi trades 0.1 percent down at 0.7061, having touched a low of 0.7058 earlier, its lowest level since Dec. 28. FxWirePro's Hourly Kiwi Strength Index was at -163.57 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7131, a break above could take it near 0.7162 (5-DMA). On the downside, support is seen at 0.7050, a break below could drag it below 0.7010.
Equities Recap
Asian shares advanced as robust corporate earnings boosted Wall Street, while the dollar hovered near 3-1/2-month highs against a basket of currencies following a surge in U.S. bond yields.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 percent.
Tokyo's Nikkei rose 0.5 percent to 22,325.68 points, Australia's S&P/ASX 200 index eased 0.2 percent to 5,911.50 points and South Korea's KOSPI surged 1.2 percent to 2,476.65 points.
Shanghai composite index fell 1.03 percent to 3,085.22 points, while CSI300 index was trading 1.6 percent down at 3,768.33 points.
Hong Kong’s Hang Seng was trading 0.9 percent lower at 30,052.81 points. Taiwan shares shed 0.7 percent to 10,488.58 points.
Commodities Recap
Crude oil prices rallied, supported by an expectation that the United States will re-impose sanctions against Iran and a decline in output in Venezuela. International benchmark Brent crude was trading 0.6 percent up at $74.43 per barrel by 0441 GMT, having hit a high of $75.44 on Tuesday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.6 percent up at $68.38 a barrel, after rising as high as $69.53 last week, its highest since Nov. 2014.
Gold prices remained close to 5-week lows touched in the previous session, weighed down by a stronger dollar and a rise in U.S. Treasury yields. Spot gold was trading flat at $1,323.33 per ounce at 0446 GMT, having hit a low of $1,318.69 an ounce on Wednesday, its lowest since March 21. U.S. gold futures gained 0.1 percent at $1,324.60 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 3.020 percent lower by 0.004 bps, while 5-year yield was 0.009 bps down at 2.831 percent.
The Japanese 10-year government bond yield climbed to over 7-week high during late Asian session after the United States counterpart breached the 3.00 psychological mark overnight, owing to rising expectations of higher inflationary pressures and hopes of a faster pace of interest rate hikes by the Federal Reserve this year. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 0.06 percent, the yield on the long-term 30-year note jumped nearly 2 basis points to 0.76 percent and the yield on short-term 2-year hovered around 1 basis point to trade at -0.12 percent.
The Australian government bonds slumped following heavy sell-off in the U.S. Treasuries, pushing the U.S. 10-year Note yield above 3 percent mark for the first time in 4-1/2 years. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 3-1/2 basis points to 2.879 percent, the yield on the long-term 30-year Note also surged 3 basis points to 3.443 percent and the yield on short-term 2-year up over 1 basis point to 2.124 percent.
The Canadian government bond prices were lower across a steeper yield curve in sympathy with U.S. Treasuries. The two-year fell 2.5 Canadian cents to yield 1.932 percent and the 10-year declined 15 Canadian cents to yield 2.375 percent. The 10-year yield touched its highest intraday since Feb. 15 at 2.376 percent.
