Market Roundup
- France's Macron visits Trump as Iran nuclear deal hangs in balance
- Trump says may tie Mexican immigration control to NAFTA
- Australia Q1 CPI QQ, 0.4%, f'cast 0.5%, last 0.6%
- Australia A1 CPI YY, 1.9%, f'cast 2.0%, last 1.9%
- Australia Q1 RBA Weighted Medn CPI YY, 2.0%, f'cast 1.9%, last 2.0%
- Australia Q1 RBA Trimmed Mean CPI YY, 1.9%, f'cast 1.8%, last 1.8%
- Australia's central bank in 'no particular rush' to raise rates
- Australians facing interest-only loan expiries, risks small -RBA
- Bank of Canada sees economy improving, plays down inflation risk
- Japan's EconMin Motegi – Japan-US ministerial meeting on trade after mid-June
Economic Data Ahead
- (0245 ET/0645 GMT) France Apr Business Climate Mfg, f'cast 110, last 111
- (0400 ET/0800 GMT) Germany Apr Ifo Business Climate, f'cast 102.7, last 114.7
- (0400 ET/0800 GMT) Germany Apr Ifo Current Conditions, f'cast 106.0, last 125.9
- (0400 ET/0800 GMT) Germany Apr Ifo Expectations, f'cast 99.5, last 104.4
- (0400 ET/0800 GMT) Italy Apr MFG Business Confidence, f'cast 108.7, last 109.1
- (0400 ET/0800 GMT) Italy Apr Consumer Confidence, f'cast 116.9, last 117.5
- (0430 ET/0830 GMT) UK Mar PSNB Ex Banks, GBP, f'cast 3.250 bln, last 1.340 bln
- (0430 ET/0830 GMT) UK Mar PSNB, GBP, f'cast 1.600 bln, last -0.272 bln
- (0430 ET/0830 GMT) UK Mar PSNCR, GBP, last 18.629 bln
- (0600 ET/1000 GMT) UK Apr CBI Trends - Orders, f'cast 6, last 4
- (0600 ET/1000 GMT) Italy Mar Flash Trd Bal Non-EU EUR, last 1.99 bln
Key Events Ahead
- N/A EU General Affairs Council meets to discuss Brexit - Luxembourg
- N/A City Lecture and lunch discussion with Bank of France's François Villeroy de Galhau - London
- N/A European Commission's Valdis Dombrovskis speaks on financial stability and the financial services industry ahead of Brexit - London
- (0400 ET/0800 GMT) ECB policymaker and French central bank governor Francois Villeroy de Galhau speaks at two events on Europe beyond Brexit - London
- (0420 ET/0820 GMT) BoE's Andrew Hauser will participate in a panel discussion at the SWIFT Business Forum – London
- (0635 ET/1035 GMT) Norges Bank's Jon Nicolaisen participates in a panel debate at "City week 2018" hosted by The International Financial Services Forum - London
FX Beat
DXY: The dollar index retreated after rallying to a 4-1/2 month high earlier, as the U.S. 10-year Treasury yield hit its highest in over four years at 2.998 percent. The greenback against a basket of currencies trades 0.1 percent up at 90.86, having touched a high of 91.08, its highest since Jan. 12. FxWirePro's Hourly Dollar Strength Index stood at 137.08 (Highly Bullish) by 0500 GMT.
EUR/USD: The euro steadied after falling to a near 2-week earlier in the day as investors awaited German IFO readings that could provide clues further direction. The European currency traded 0.1 percent up at 1.2215, having touched a low of 1.2184 earlier, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at 65.35 (Bullish) by 0500 GMT. Investors’ attention will remain on series of data from Eurozone economies, ahead of the U.S. housing price index and new homes sales data. Immediate resistance is located at 1.2250, 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 rallied to a fresh 2-1/2 month peak as the U.S. 10-year Treasury yield climbed toward the psychologically key 3 percent level, driven by concerns about the growing supply of government debt and inflationary pressures from increasing oil prices. The major was trading 0.1 percent up at 108.77, having hit a high of 108.86 earlier, its highest since Feb. 12. FxWirePro's Hourly Yen Strength Index stood at -49.06 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. housing price index and new homes sales data. Immediate resistance is located at 109.13 (Feb. 9 High), a break above targets 109.50. On the downside, support is seen at 107.57 (5-DMA), a break below could take it lower 106.86 (21- Low).
GBP/USD: Sterling edged up after falling to a 1-1/2 month low earlier in the day on doubts whether the Bank of England would raise interest rates in May following weaker-than-expected economic data and cautious comments from governor Mark Carney. The major traded 0.05 percent down at 1.3945, having hit a low of 1.3918 earlier, it’s lowest since Mar. 19. FxWirePro's Hourly Sterling Strength Index stood at -48.40 (Neutral) by 0500 GMT. Investors’ focus will remain on the UK CBI trends Survey, ahead of U.S. fundamental drivers. Immediate resistance is located at 1.4031 (Previous Session High), a break above could take it near 1.4102 (10-DMA). On the downside, support is seen at 1.3900, a break below targets 1.3874 (Mar. 13 Low). Against the euro, the pound was trading 0.05 percent up at 87.61 pence, having hit a low of 87.91 pence on Friday, it’s lowest since Mar. 27.
AUD/USD: The Australian dollar steadied after slumping to a 4-1/2 month trough on data that showed domestic consumer prices stayed soft last quarter as core inflation began a third year below the central bank's target. The economy's annual CPI inflation came in at 1.9 percent, cementing expectations the RBA will stand pat in the short term. The Aussie trades 0.1 percent up at 0.7610, having hit a low of 0.7576; it’s lowest since Dec. 13. FxWirePro's Hourly Aussie Strength Index stood at -124.00 (Highly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7576 (Session Low), a break below targets 0.7540. On the upside, resistance is located at 0.7650, a break above could take it near 0.7665.
NZD/USD: The New Zealand dollar tumbled to fresh 3-week low on expectations that the Reserve Bank of New Zealand would stay pat after leaving rates at all-time lows since late 2016. The Kiwi trades 0.5 percent down at 0.7114, having touched a low of 0.7113 earlier, its lowest level since Apr. 1. FxWirePro's Hourly Kiwi Strength Index was at -170.88 (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 0.7176, a break above could take it near 0.7257 (5-DMA). On the downside, support is seen at 0.7100, a break below could drag it below 0.7072 (Jan. 4 Low).
Equities Recap
Asian shares rebounded from near two-week lows, while the greenback rallied to its highest level since Jan. 12 as U.S. bond prices nudged closer to the key psychological barrier of 3 percent, a level last seen since early 2014.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 percent.
Tokyo's Nikkei rallied 0.9 percent to 22,296.39 points, Australia's S&P/ASX 200 index surged 0.6 percent to 5,921.60 points and South Korea's KOSPI tumbled 0.3 percent to 2,467.55 points.
Shanghai composite index rose 1.9 percent to 3,126.25 points, while CSI300 index was trading 2.01 percent up at 3,842.15 points.
Hong Kong’s Hang Seng was trading 1.0 percent higher at 30,549.67 points. Taiwan shares shed 1.1 percent to 10,579.50 points.
Commodities Recap
Crude oil prices eased after rising to its highest level since Nov 2014 on expectations that supplies will tighten because fuel is increasing, and the United States may impose sanctions against Iran. International benchmark Brent crude was trading 0.1 percent up at $74.86 per barrel by 0446 GMT, having hit a high of $75.17 earlier, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.05 percent up at $68.91 a barrel, after rising as high as $69.53 on Thursday, its highest since Nov. 2014.
Gold prices steadied after falling to a two-week low earlier as a stronger dollar, rising U.S. Treasury yields and receding geopolitical worries dented safe-haven demand. Spot gold edged up 0.1 percent to $1,326.35 per ounce by 0449 GMT, having hit a low of $1,322.11 an ounce, its lowest since Apr. 6. U.S. gold futures rose 0.3 percent to $1,327.80 per ounce.
Treasuries Recap
The Japanese government bonds remained narrowly mixed during Asian session as investors refrained from any major trading activity amid lack of economically significant data. The yield on the benchmark 10-year JGBs, which moves inversely to its price, hovered around 0.05 percent, the yield on the long-term 30-year note rose 1 basis point to 0.75 percent and the yield on short-term 2-year traded 1 basis point lower at -0.13 percent.
The Australian government bonds gained following weaker-than-expected Q1 CPI inflation data, which could hold the Reserve Bank of Australia (RBA) to keep its interest rate unchanged this year. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 1-1/2 basis points to 2.854 percent, the yield on the long-term 30-year Note also dipped 1-1/2 basis points to 3.424 percent and the yield on short-term 2-year down nearly 2 basis points to 2.131 percent.
The New Zealand’s long-term bond yields slumped at the time of closing after the United States Treasuries started to recover post a day of recognition as yields braced to touch the 3.00 psychological mark for the first time since January 2014. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, slumped 2 basis points to 2.91 percent, the yield on the long-term 20-year note plunged 3 basis points to 3.48 percent and the yield on short-term 2-year too closed 3 basis points lower at 1.93 percent.
