Market Roundup
- EUR/USD -0.03%, USD/JPY 0.09%, GBP/USD 0.08%, EUR/GBP -0.11%
- DXY -0.01%, DAX 0.39%, FTSE 0.27%, Brent 0.23%, Gold 0.25%
- Germany Apr Ifo Business Climate, 102.1, 102.7 forecast, 114.7 previous, 103.3 revised
- Germany Apr Ifo Current Conditions, 105.7, 106.0 forecast, 125.9 previous, 106.6 revised
- Germany Apr Ifo Expectations, 98.7, 99.5 forecast, 104.4 previous, 100.0 revised
- France Apr Business Climate Mfg, 109, 110 forecast, 111 previous, 110 revised
- Japan says trade talks with US under new framework won't start until June
- Iran warns Trump it might withdraw from Non-Proliferation Treaty
- Oil tops $75, highest since 2014 OPEC meeting that led to pump war
- ECB's Villeroy de Galhau warns of U.S. protectionist threat
- EU downplays prospect of bespoke Brexit trade deal for banks
- UK finance minister beats target for cutting budget deficit
- Italy Apr Consumer Confidence, 117.1, 116.9 forecast, 117.5 previous
- Italy Apr MFG Business Confidence, 107.7, 108.7 forecast, 109.1 previous, 108.9 revised
- UK Apr CBI Trends-Others, 4, 6 forecast, 4 previous
Economic Data Ahead
- (0900 ET/1300 GMT) The S&P/Case-Shiller is expected to report that U.S. home price index of 20 metropolitan areas rose at an annualized rate of 6.3 percent in February, after rising 6.4 percent in the previous month.
- (0900 ET/1300 GMT) The Federal Housing Finance Agency releases its housing price index for the month of February. The index gained 0.8 percent in January.
- (1000 ET/1400 GMT) The U.S. new single-family home sales are likely to rise 1.9 percent to a seasonally adjusted annual rate of 630,000 units in March, after slumping 0.6 percent in the previous month.
- (1000 ET/1400 GMT) Federal Reserve Bank of Richmond will publish it Manufacturing Index for April. The index posted a rise of 15 in the prior month.
- (1000 ET/1400 GMT) The U.S. Conference Board is likely to show a decline in its consumer confidence index for the month of April to 126.0 from a final reading of 127.7 in March.
- (1000 ET/1400 GMT) Mexican inflation is likely to have declined 0.27 percent in the first half of April compared to a rise of 0.29 percent during the first half of March.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
Key Events Ahead
- N/A EU General Affairs Council meets to discuss Brexit - Luxembourg
FX Beat
DXY: The dollar index steadied after rising to a 4-1/2 month high earlier, supported by rising U.S. Treasury yields with the 10-year Treasury edging closer to the 3 percent key level. The greenback against a basket of currencies trades 0.05 percent up at 90.92, having touched a high of 91.08, its highest since Jan. 12. FxWirePro's Hourly Dollar Strength Index stood at 129.33 (Highly Bullish) by 1100 GMT.
EUR/USD: The euro slumped to a near 2-month low as business morale in Germany, France, and Italy deteriorated in April as a stronger currency and capacity constraints limited output. Moreover, ECB policymaker Francois Villeroy de Galhau's comments, citing that uncertainty generated by U.S. trade tariffs dampened investment in the global economy hurt investor sentiment. The European currency traded 0.05 percent down at 1.2208, having touched a low of 1.2181 earlier, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at 69.73 (Bullish) by 1100 GMT. 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 hit its highest in more than four years at 2.998 percent and as investor risk sentiment improved after tensions over the Middle East and the US-China trade war eased. The major was trading 0.1 percent up at 108.81, having hit a high of 108.91 earlier, its highest since Feb. 9. FxWirePro's Hourly Yen Strength Index stood at -9.76 (Neutral) by 1100 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 declined to a 5-week low as the dollar rebounded on the back of higher U.S. Treasury yields, with the 10-year note near the key 3 percent level. Moreover, weaker-than-expected data and cautious comments from Bank of England Governor Mark Carney slashed market expectations for a May rate hike. Sterling traded 0.05 percent down at 1.3943, having hit a low of 1.3918 earlier, it’s lowest since Mar. 19. FxWirePro's Hourly Sterling Strength Index stood at -72.32 (Bearish) by 1100 GMT. 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 down at 87.62 pence, having hit a low of 87.91 pence on Friday, it’s lowest since Mar. 27.
USD/CHF: The Swiss franc tumbled to a near 4-1/2 month trough as a rise in U.S. Treasury yields send the greenback to multi-month highs. The major trades 0.05 percent up at 0.9780, having touched a high of 0.9792 earlier, it’s highest since Jan. 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 44.17 (Neutral) by 1100 GMT. On the higher side, near-term resistance is around 0.9816 (Jan. 11 High) and any break above will take the pair to next level till 0.9845 (Jan. 10 High). The near-term support is around 0.9718 (5-DMA) and any close below that level will drag it till 0.9657 (10-DMA).
Equities Recap
European shares erased early session losses, while euro fell to a 2-month low on concerns that rising U.S. Treasury yields would push the currency lower.
The pan-European STOXX 600 index traded 0.1 percent up at 383.76 points, while the FTSEurofirst 300 index edged up 0.05 percent to 1,572.75 points.
Britain's FTSE 100 trades 0.3 percent up at 7,422.21 points, while mid-cap FTSE 250 fell 0.3 percent to 20,252.35 points.
Germany's DAX fell 0.4 percent at 12,621.92 points; France's CAC 40 trades 0.4 percent lower at 5,436.40 points.
Commodities Recap
Crude oil prices declined after rising above $75 a barrel to its highest since November 2014 earlier on the back of OPEC-led production cuts, strong demand and the prospect of renewed U.S. sanctions on Iran. International benchmark Brent crude was trading 0.2 percent up at $74.83 per barrel by 0951 GMT, having hit a high of $75.25 earlier, its highest since Nov. 27 2014. U.S. West Texas Intermediate was trading 0.05 percent down at $68.87 a barrel, after rising as high as $69.53 on Thursday, its highest since Nov. 2014.
Gold prices steadied after falling to a 2-week low earlier in the day, as the dollar came off a three-month peak and a rise in U.S. Treasury yields stalled. Spot gold was up 0.2 percent at $1,326.77 an ounce at 0955 GMT, having hit a low of $1,322.10 an ounce, its lowest since Apr. 6. U.S. gold futures for June delivery were up $4.80 an ounce at $1,328.80.
Treasuries Recap
The U.S. Treasuries remained flat in a muted trading session amid lack of economically significant data. Investors will focus today on the housing market. New home sales data for March alongside the FHFA and Case-Shiller house price indices will be released. The yield on the benchmark 10-year Treasuries remained flat at 2.97 percent, the super-long 30-year bond yields hovered around 3.13 percent while the yield on the short-term 2-year traded nearly 1-1/2 basis points higher at 2.48 percent.
The German bunds jumped during European session after the country’s Ifo business climate index for the month of April missed market expectations, boosting asset prices. The German 10-year bond yields, which move inversely to its price, slumped 1-1/2 basis points to 0.61 percent, the yield on 30-year note also surged nearly 1-1/2 basis points to 1.28 percent and the yield on short-term 2-year traded 1/2 basis point lower at -0.54 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.
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.
