Market Roundup
- New RBNZ governor strikes dovish tone, keeps rates on hold.
- China April PPI YY, 3.5%, forecast 3.4%, last 3.1%.
- China April CPI YY, 1.9%, forecast 1.8%, last 2.1%.
- China April CPI MM, -0.1%, forecast -0.2%, last -1.1%.
- China won't change stance on trade talks with U.S. - China commerce ministry.
- Bank of England seen keeping rates steady after data disappointment.
- Singapore likely summit venue after North Korea releases prisoners - U.S. official.
- Pompeo to immediately pursue talks with allies on Iran - US officials.
- Iran targets Israeli positions across Syrian frontier, Israel pounds Syria.
- Malaysia's Najib raises doubt that Mahathir will succeed him.
- BOJ Kuroda signals debate on conditions for stimulus exit.
- Japan March current account surplus Y3.12bln, Y3.01bln eyed, FY’17 surplus largest in decade.
- Japan Foreigners buy Y1.4025 trln J-stocks, Y1.4681 trln JGBs, Y1.6826 trln bills.
Economic Data Ahead
- (0430 ET/0830 GMT) UK March Industrial Output m/m, forecast 0.2%, last 0.1%.
- (0430 ET/0830 GMT) UK March Industrial Output y/y, forecast 3.1%, last 2.2%.
- (0430 ET/0830 GMT) UK March Manufacturing Output MM, forecast -0.2%, last -0.2%.
- (0430 ET/0830 GMT) UK March Manufacturing Output y/y, forecast 2.9%, last 2.5%.
- (0430 ET/0830 GMT) UK March Goods Trade Bal. Non-EU, last -2.24 bln.
- (0430 ET/0830 GMT) UK March Goods Trade Balance GBP, forecast -11.25 bln, last -10.20 bln.
Key Events Ahead
- (0515 ET/0915 GMT) ECB's Draghi and Coeure attend the Charlemagne Prize 2018 award ceremony in Aachen, Germany.
- (0700 ET/1100 GMT) BOE publishes summary and minutes of the Monetary Policy Committee meeting and Inflation Report.
FX Recap
USD: The dollar index against a basket of six major currencies stood at 93.11 after hitting a 4 1/2-month high of 93.42, extending its gains from its April low to 4.7 percent.
EUR/USD: The euro hit a 4-1/2 month low of $1.1822 on Wednesday, having fallen in six of the last seven sessions. It last traded at $1.1875. A consistent close below $1.1850 will drag the parity down towards key support around $1.1745 levels. Alternatively, reversal from key support will take the parity higher towards key resistances around $1.1896, $1.1992, $1.2240 and $1.2345 marks respectively.
USD/JPY: The Japanese yen trades marginally higher in early Asia as BOJ released summary of opinions as well as robust current account data. Pair remained close to its three-month high of 110.05 yen touched on May 2. It made intraday high at 109.92 and low at 109.63 levels. A sustained close above 109.74 is required to take the parity higher towards key resistance around 112.96 marks. Alternatively, a daily close below 109.74 will drag the parity down towards key supports around 108.82, 106.71 and 105.32 marks respectively.
GBP/USD: The British pound hovered above Monday's four-month low as traders expect the Bank of England to keep rates on hold at its meeting later in the day. A recent run of weak UK economic data and renewed worries about Brexit have led markets to price out the possibility of a rate hike this month. The pound last stood flat at $1.3562, not far from $1.3485 touched on Monday. On the top side key resistance was seen at $1.3665 and support was seen at $1.3302 mark.
AUD/USD: The Australian dollar was unchanged at $0.7460 after two straight sessions of losses. It went as low as $0.7413 on Wednesday, a level last visited in June 2017. The Aussie has been on a slippery slope since late April largely due to a surge in the greenback as U.S. economic indicators outpaced much of the advanced world and forced traders to unwind short-dollar positions.
NZD/USD: The New Zealand dollar shed as much as 0.9 percent to a five-month low of $0.6904 after the Reserve Bank of New Zealand held interest rates steady and said the next move in rates could just as easily be a cut as a hike. The RBNZ surprised markets with a slight dovish shift. The kiwi dollar went as deep as $0.6904, a level not seen since early December, after the Reserve Bank of New Zealand held rates at a record low 1.75 percent and trimmed its inflation forecasts a little.
Equities Recap
Japan’s Nikkei was trading 0.35 pct higher at 22,488.55 points.
South Korea’s kospi was trading 0.36 pct higher at 2,452.86 points.
Shanghai composite index to open up 0.3 pct at 3,169.05 points and China's CS300 index to open up 0.3 pct at 3,882.84 points.
Australia's S&P/ASX 200 index was up 0.27 pct at 6,124.50 points in early trade.
Hong Kong’s Hang seng was trading 0.90 pct higher at 30,814.50 points.
Taiwanese stock was trading around 0.43 percent higher at 10,749.75 points.
India’s NSE Nifty was trading around 0.34 percent higher at 10,777.80 points while BSE Sensex was trading 0.45 points higher at 35,464.88 points.
Commodities Recap
Oil prices clocked up more multi-year highs on Thursday as traders adjusted to the prospects of renewed U.S. sanctions against major crude exporter Iran amid an already tightening market. Oil prices rose sharply in response to the announced measures. Brent crude futures, the international benchmark for oil prices, hit their strongest since November 2014 above $77.80 per barrel at 0421 GMT on Thursday. U.S. West Texas Intermediate (WTI) crude futures also marked a November-2014 high, at $71.75 a barrel at that time.
Gold prices nudged lower on Thursday as the dollar held near its 2018-peak on firm U.S. bond yields, with investors also keeping an eye out for any further impact from U.S. President Donald Trump's decision to pull out of a nuclear deal with Iran. Spot gold had fallen 0.1 percent to $1,311.26 per ounce by 0053 GMT. U.S. gold futures for June delivery slipped 0.1 percent to $1,311.40 per ounce.
Treasuries Recap
New Zealand government bonds rose, sending yields down 2.5 basis points at the long-end and 2-3 basis points at the short-end of the curve.
Australian government bond futures slipped, with the three-year bond contract off 1.5 ticks at 97.775. The 10-year contract slipped 2 ticks to 97.1850.
The 10-year U.S. bond yield rose back to the psychologically important 3 percent mark and investors looked to U.S. consumer price data due later to show a acceleration in inflation. The 10-year U.S. bond yield rose above 3 percent on Wednesday, edging near its 2014 peak of 3.041 percent. It last stood at 2.990 percent.
