Market Roundup
- China to allow more foreign investment in financial sector this year-PBOC
- China c. bank governor says will continue to carry out prudent monetary policy
- China Mar PPI 3.1% y/y, 3.2% eyed, 3.7% last
- China Mar CPI 2.1% y/y, 2.6% eyed, 2.9% last
- China to sharply boost daily stock connect quotas from May 1
- China will roll out more tax cuts - vice finmin
- Japan Feb core machinery orders +2.1% m/m, +2.4% y/y, -2.5% and unchanged eyed
- Japan Mar domestic corporate goods prices -0.1% m/m, +2.1% y/y, -0.1/+2.0% eyed
- Japan Mar outstanding bank loans +2.0% y/y, steady rise still, Feb +2.1%
- Australia Apr Consumer Sentiment -0.6%, 0.2% last
- As Trump fumes over FBI raid, White House lawyers urge restraint
- U.S., Russia clash at U.N. over chemical weapons attacks in Syria
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Feb Retail Sales NSA YY, -0.80% last
- (0430 ET/0830 GMT) Great Britain Feb Construction O/P Vol YY -2.5% eyed, -3.9% last
- (0430 ET/0830 GMT) Great Britain Feb Industrial Output YY 2.9% eyed, 1.6% last
- (0430 ET/0830 GMT) Great Britain Feb Manufacturing Output MM 0.2% eyed, 0.1% last
- (0430 ET/0830 GMT) Great Britain Feb Goods Trade Balance GBP -11.95 bln eyed, -12.33 bln last
Key Events Ahead
- (0215 ET/0615 GMT) BOJ Governor Haruhiko Kuroda speaks at an annual trust associations' meeting-Tokyo
- (0630 ET/1030 GMT) ECB Governing Council member Ardo Hansson speaks-Frankfurt
- (0700 ET/1100 GMT) ECB President Mario Draghi speaks followed by a Q&A session with winners of the Generation €uro Students’ Award, organised by the ECB-Frankfurt
- (0900 ET/1300 GMT) ECB Board member Pentti Hakkarainen participates in a panel discussion on "Risks of International Fragmentation" at the 2018 European Bank Executive Committee Forum-Brussels
- (1040 ET/1440 GMT) ECB supervisor Ignazio Angeloni participates in a panel discussion on "The Future of Europe" at the 2018 European Bank Executive Committee Forum-Brussels
- (1200 ET/1600 GMT) Swedish central bank deputy governor Cecilia Skingsley talks about digital currencies-Stockholm
- (1400 ET/1800 GMT) U.S. Federal Reserve's FOMC releases minutes from its March 20-21 policy meeting-Washington, D.C.
- N/A ECB Governing Council meeting. No interest rate announcements scheduled-Frankfurt
- N/A Portugal EUR 15-year benchmark via Barclays, CaixaBI, DB, HSBC, MS, SG CIB.
FX Beat
DXY: The dollar index slumped to a 2-week low as U.S. President Donald Trump's administration edged closer to a coordinated military response to President Bashar Al Assad's alleged use of chemical weapons in Syria. The greenback against a basket of currencies trades 0.1 percent down at 89.53, having touched a low of 89.52 earlier, its highest since Mar. 28. FxWirePro's Hourly Dollar Strength Index stood at -109.82 (Highly Bearish) by 0500 GMT.
EUR/USD: The euro rose, extending gains for the fourth straight session, following European Central Bank policymaker Ewald Nowotny's hawkish comments, citing that the central banks 2.55-trillion euro ($3.15 trillion) bond-buying programme would be wound down by the end of this year. The European currency traded 0.1 percent up at 1.2362, having touched a high of 1.2377 on Tuesday, its highest since Mar. 28. FxWirePro's Hourly Euro Strength Index stood at 38.05 (Neutral) by 0400 GMT. Investors’ attention will remain on ECB non-monetary policy meeting and President Draghi's speech, ahead of the U.S. consumer price index and monthly budget statement. Immediate resistance is located at 1.2388 (Mar. 22 High), a break above targets 1.2421 (Mar. 28 High). On the downside, support is seen at 1.2321 (21-DMA), a break below could drag it lower 1.2260 (Apr. 6 Low).
USD/JPY: The dollar eased, reversing some of its previous session gains, as Syrian headlines flow from the French President putting fighter jets on alert if needed for air strikes on Syria triggered a fresh bout of risk aversion. However, Chinese President Xi Jinping's promise to cut import tariffs eased concerns about a U.S.-China trade conflict. The major was trading 0.1 percent down at 107.04, having hit a high of 107.49 on Thursday, its highest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at 0.60 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. consumer price index and monthly budget statement. Immediate resistance is located at 107.46 (Apr. 6 High), a break above targets 107.90 (Feb. 21 High). On the downside, support is seen at 106.69 (10-DMA), a break below could take it lower 106.26 (21-DMA).
GBP/USD: Sterling rallied to a 2-week peak, as the comments by BoE policymaker Ian McCafferty and strong housing survey boosted expectations the central bank would raise rates in May to curb inflation. Bank of England policymaker Ian McCafferty on Tuesday stated that the central bank should not delay in hiking interest rates after a recent strong pick-up in the world economy. The major traded 0.1 percent up at 1.4188, having hit a high of 1.4190 earlier, it’s highest since Mar. 28. FxWirePro's Hourly Sterling Strength Index stood at 32.55 (Neutral) by 0500 GMT. Investors’ focus will remain on the UK trade balance, manufacturing, and industrial production, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.4200 (Mar. 28 High), a break above could take it near 1.4244 (Mar. 27 High). On the downside, support is seen at 1.4094 (5-DMA), a break below targets 1.4060 (21-DMA). Against the euro, the pound was trading 0.05 percent down at 87.17 pence, having hit a high of 86.92 pence on Tuesday, it’s highest since Mar 22.
AUD/USD: The Australian dollar declined from a 3-week peak hit earlier in the day after Reserve Bank of Australia Governor Philip Lowe warned that serious escalation of international trade tensions would cloud the outlook for the domestic economy and hurt global growth. Moreover, downbeat Chinese CPI and PPI figures intensified the selling pressure around the major. The Aussie trades 0.1 percent down at 0.7752, having hit a high of 0.7769 earlier; it’s highest since Mar. 22. FxWirePro's Hourly Aussie Strength Index stood at 15.70 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7719 (21-DMA), a break below targets 0.7693 (Apr. 10 Low). On the upside, resistance is located at 0.7780 (Mar. 21 high), a break above could take it near 0.7804 (Mar. 16 High).
NZD/USD: The New Zealand dollar plunged after rising to a 1-1/2 month high earlier in the session as softer China consumer price index (CPI) and producer price inflation (PPI) weighed negatively on the bull's sentiment. China's CPI rose 2.1 percent in March against 2.6 percent expected and previous 2.9 percent. While, the PPI eased to 3.1 percent from the previous month's print of 3.7 percent, missing the estimate of 3.2 percent. The Kiwi trades 0.1 percent down at 0.7353, having touched a high of 0.7375, its highest level since Feb. 21. FxWirePro's Hourly Kiwi Strength Index was at -16.38 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7386 (Feb. 21 High), a break above could take it near 0.7411 (Feb. 15 High). On the downside, support is seen at 0.7303 (5-DMA), a break below could drag it below 0.7267 (10-DMA).
Equities Recap
Asian shares rose, reversing earlier session losses, while the greenback declined to a 2-week trough as U.S. and China are still seen needing to clear more obstacles before reaching any sort of settlement over trade issues.
MSCI's broadest index of Asia-Pacific shares outside Japan surged 0.4 percent.
Tokyo's Nikkei declined 0.5 percent to 21,687.10 points, Australia's S&P/ASX 200 index eased 0.5 percent to 5,828.70 points and South Korea's KOSPI fell 0.3 percent to 2,442.69 points.
Shanghai composite index rallied 0.4 percent to 3,203.70 points, while CSI300 index was trading 0.2 percent up at 3,935.16 points.
Hong Kong’s Hang Seng was trading 0.5 percent higher at 30,879.86 points. Taiwan shares added 0.4 percent to 10,974.02 points.
Commodities Recap
Crude oil prices eased, hovering away from 2014 highs reached the previous session as escalating Middle East tensions were offset by rising inventories and production in the United States. International benchmark Brent crude was trading 0.4 percent down at $70.72 per barrel by 0421 GMT, having hit a high of $71.31 on Tuesday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.3 percent down at $65.33 a barrel, after rising as high as $65.83 on Tuesday, its highest since Mar. 27.
Gold prices rose to their highest in a week earlier, as the dollar index hovered near two-week lows and worries about a host of geopolitical tensions stoked demand for the safe-haven assets. Spot gold rose 0.1 percent at $1,341.06 an ounce as of 0431 GMT, having hit a high of $1,342.61 an ounce, its highest since Apr. 4. U.S. gold futures were down 0.1 percent at $1,344 an ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.793 percent lower by 0.003 bps, while 5-year yield was 0.003 bps down at 2.619 percent.
The Japanese government bonds remained flat as investors wait to watch the country’s 30-year auction, scheduled to be held on April 12 by 03:45GMT amid a silent trading week that witnessed data of least economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.03 percent, the yield on the long-term 30-year note slipped 1 basis point to 0.72 percent and the yield on short-term 2-year remained flat at -0.15 percent.
The Australian government bonds traded mixed as investors preferred to stay on the sidelines ahead of the Reserve Bank of Australia (RBA) Financial Stability report. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, traded flat at 2.694 percent, the yield on the long-term 30-year Note dipped 2 basis points to 3.279 percent and the yield on short-term 2-year also surged nearly 1 basis point to 2.040 percent.
The New Zealand government bonds closed higher as investors wait to watch the Reserve Bank of New Zealand (RBNZ) Assistant Governor McDermott’s speech, scheduled to be held today at 23:00GMT. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, fell 1-1/2 basis points to 2.81 percent, the yield on the long-term 20-year note slumped 2-1/2 basis points to 3.40 percent and the yield on short-term 2-year closed 2 basis points lower at 1.92 percent.
The Canadian government bond prices were lower across the yield curve, with the two-year down 5 Canadian cents to yield 1.823 percent and the 10-year falling 31 Canadian cents to yield 2.181 percent. The gap between Canada's 10-year yield and its U.S. equivalent narrowed by 2.5 basis points to a spread of -62.0 basis points.
