Market Roundup
- Japan Mar Exports YY 2.1%, 4.7% eyed, 1.8% last
- Japan Mar Imports YY -0.6%, 5.4% eyed, 16.5% last
- Japan Mar Trade Balance (Total Yen) 797.3 bln, 498.3 bln eyed, 3.4 bln last
- China's new home prices edge up, gains extend to larger cities
- China Jan-March fiscal expenditures rise 10.9 pct yr/yr - state media
- China state planner says expects mild consumer price inflation this year
- U.S. Commerce Dept finds aluminum sheet imports from China subsidized
- Trump says on Twitter he does not like TPP for U.S., too many contingencies
- Trump's CIA chief in secret meeting with North Korean leader
- South Korea says discussing peace deal with N. Korea ahead of summit
- Growth in UK firms' marketing budgets slowest since start of 2016
- IMF warns rising trade tensions threaten to derail global growth
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Mar CPI YY, 2.7% eyed, 2.7% last
- (0430 ET/0830 GMT) Great Britain Mar RPI YY, 3.6% eyed, 3.6% last
- (0430 ET/0830 GMT) Great Britain Mar PPI Core Output YY NSA, 2.2% eyed, 2.4% last
- (0500 ET/0900 GMT) EZ Mar HICP Final YY, 1.4% eyed, 1.4% last
Key Events Ahead
- (1000 ET/1400 GMT) Bank of Canada key policy interest rate announcement and monetary policy report-Ottawa
- (1115 ET/1515 GMT) Bank of Canada Governor Stephen Poloz and Bank of Canada Senior Deputy Governor Carolyn Wilkins hold a press conference to discuss the contents of the Monetary Policy Report-Ottawa
- (1400 ET/1800 GMT) U.S. Federal Reserve issues its Beige Book on economic condition-Washington, D.C.
- (1500 ET/1900 GMT) Federal Reserve Bank of New York President William Dudley speaks on "The U.S. Economic Outlook and the Implications for Monetary Policy" -Bronx, New York
- (1615 ET/2015 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles participates a discussion, "Navigating New Opportunities: Transatlantic Regulatory Reform"-Washington, D.C.
- N/A Bank of England Deputy Governor for Financial Stability Jon Cunliffe participates in G20 meetings-Washington, D.C.
- N/A First Deputy Governor at the Bank of Russia, Ksenia Yudayeva, visits Washington
- N/A Greek Finance Minister Euclid Tsakalotos attends IMF spring meetings in Washington (to Apr 21)
FX Beat
DXY: The dollar index gained, having rebounded from a 2-week low hit in the prior session, boosted by upbeat U.S. economic indicators as the market focused on fundamentals, while perceived political risks receded. The greenback against a basket of currencies trades 0.1 percent up at 89.53, having touched a low of 89.23 on Tuesday, its lowest since Mar. 27. FxWirePro's Hourly Dollar Strength Index stood at 50.62 (Bullish) by 0500 GMT.
EUR/USD: The euro steadied after easing from a 3-week high hit in the previous session on a ZEW research institute survey showing German investor morale reached its lowest since November 2012. Investors now await Eurozone consumer price index figures, which is expected to rise at an annualized rate of 1.4 percent in March and on monthly basis, it is likely to rise 1.0 percent. The European currency traded 0.1 percent up at 1.2377, having touched a high of 1.2413 on Tuesday, its highest since Mar. 28. FxWirePro's Hourly Euro Strength Index stood at 81.89 (Slightly Bullish) by 0400 GMT. Investors’ attention will remain on the Eurozone consumer price index and construction output, ahead of Fed's William Dudley and Quarles speech. Immediate resistance is located at 1.2421 (Mar. 28 High), a break above targets 1.2476 (Mar. 27 High). On the downside, support is seen at 1.2354 (5-DMA), a break below could drag it lower 1.2260 (Apr. 6 Low).
USD/JPY: The dollar rose above the 107.00 handle on the back of stronger-than-expected March U.S. housing starts and steady industrial production figures. Moreover, easing risks around U.S.-China trade relations and receding tensions in the Middle East dented the bid tone around the Japanese yen. The major was trading 0.4 percent up at 107.36, having hit a high of 107.77 on Friday, its highest since Feb. 21. FxWirePro's Hourly Yen Strength Index stood at -136.00 (Highly Bullish) by 0400 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Fed's William Dudley and Quarles speech. Immediate resistance is located at 107.90 (Feb. 21 High), a break above targets 108.50. On the downside, support is seen at 106.77 (Apr. 6 Low), a break below could take it lower 106.26 (Mar. 29 Low).
GBP/USD: Sterling steadied after easing from a post-Brexit referendum 22-month high in the prior session, as expectations grew that the central bank will raise interest rates for the second time in seven months. Tuesday's weaker than expected wage data pulled the pound back from recent highs, however, did little to change the likelihood of a May rate increase of a quarter of a percentage point. The major traded 0.1 percent up at 1.4296, having hit a high of 1.4376, it’s highest since June 2016. FxWirePro's Hourly Sterling Strength Index stood at 88.31 (Slightly Bullish) by 0400 GMT. Investors’ focus will remain on the UK retail price index, producer price index and consumer price index, ahead of U.S. fundamental drivers and Fed official speeches. Immediate resistance is located at 1.4380, a break above could take it near 1.4420. On the downside, support is seen at 1.4253 (5-DMA), a break below targets 1.4173 (10-DMA). Against the euro, the pound was trading flat at 86.55 pence, having hit a high of 86.20 pence the day before, it’s highest since May 2017.
AUD/USD: The Australian dollar steadied after easing in the prior session as perceived political risks receded, with Western strikes on Syria not expected to escalate. However, caution over U.S.-China trade tensions continued to linger in the background, confining the major to narrow ranges. The Aussie trades 0.1 percent up at 0.7766, having hit a high of 0.7809 on Friday; it’s highest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at -97.93 (Slightly Bearish) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7739 (Apr. 11 Low), a break below targets 0.7712 (21-DMA). On the upside, resistance is located at 0.7810 (Apr. 13 high), a break above could take it near 0.7838 (Mar. 8 High).
NZD/USD: The New Zealand dollar eased, having touched a 1-week low the day before on the back of lukewarm Chinese economic data. Markets seem to have ignored upbeat milk auction results, which showed the Global Dairy Trade Price Index rose 2.7 percent, while prices for whole milk powder increased 0.9 percent. The Kiwi trades 0.1 percent down at 0.7335, having touched a high of 0.7395 on Friday, its highest level since Feb. 19. FxWirePro's Hourly Kiwi Strength Index was at -46.74 (Neutral) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.7372 (Apr. 17 High), a break above could take it near 0.7409 (Feb. 19 High). On the downside, support is seen at 0.7320, a break below could drag it below 0.7280 (21-DMA).
Equities Recap
Asian shares gained following four straight sessions of losses, while the greenback rebounded from 2-week lows bolstered by stronger-than-expected March U.S. housing starts and steady industrial production figures.
MSCI's broadest index of Asia-Pacific shares outside Japan nudged up 0.5 percent.
Tokyo's Nikkei rose 1.4 percent to 22,161.32 points, Australia's S&P/ASX 200 index surged 0.3 percent to 5,859.30 points and South Korea's KOSPI advanced 0.8 percent to 2,473.48 points.
Shanghai composite index gained 0.7 percent to 3,086.27 points, while CSI300 index was trading 0.5 percent up at 3,765.87 points.
Hong Kong’s Hang Seng was trading 0.9 percent higher at 30,305.69 points. Taiwan shares added 0.4 percent to 10,847.89 points.
Commodities Recap
Crude oil prices edged up, lifted by a reported fall in U.S. crude inventories and by the ongoing risk of supply disruptions. International benchmark Brent crude was trading 0.4 percent up at $71.94 per barrel by 0422 GMT, having hit a high of $73.05 last week, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.4 percent up at $66.86 a barrel, after rising as high as $67.42 last week, its highest since Nov. 2014.
Gold prices slipped, reversing some of its previous session gains, while the dollar held its gains on the back of upbeat March U.S. housing starts and industrial production figures. Spot gold fell 0.2 percent to $1,344.10 per ounce at 0426 GMT, having hit a high of $1,365.16 an ounce last week, its highest since Jan. 25. U.S. gold futures for June delivery dipped 0.2 percent to $1,347.50 per ounce.
Treasuries Recap
The 10-year U.S Treasury yield stood at 2.841 percent higher by 0.027 bps, while 5-year yield was 0.021 bps up at 2.696 percent.
The Japanese government bonds gained as investors have largely shrugged-off the better-than-expected reading of the country’s trade balance data for the month of March, released late Tuesday. However, as of Wednesday, the yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained tad lower at 0.03 percent, the yield on the long-term 30-year note slipped 1/2 basis point to 0.70 percent and the yield on short-term 2-year hovered around at -0.14 percent.
The Australian government bonds gained as investors moved into safe-haven buying following rising trade tensions between two world’s biggest economies. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 2 basis points to 2.744 percent, the yield on the long-term 30-year Note dipped 2-1/2 basis points to 3.327 percent and the yield on short-term 2-year also slumped nearly 2 basis points to 2.112 percent.
The New Zealand government bonds closed Wednesday’s session on a higher note as investors have largely shrugged-off the rise in global dairy prices at the overnight GlobalDairyTrade (GDT) price auction. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.83 percent, the yield on the long-term 20-year note slumped 2 basis points to 3.41 percent and the yield on short-term 2-year closed flat at 1.95 percent.
