Market Roundup
EUR/USD -0.19%, USD/JPY 0.21%, GBP/USD -0.31%, EUR/GBP 0.14%
DXY 0.17%, DAX 0.20%, FTSE 0.39%, Brent -1.05%, Gold -0.38%
EZ Mar Money-M3 Annual Growth, 3.7%, 4.1% forecast, 4.2% previous
EZ Mar Loans to Households, 3%, 2.9% previous, 2.9% revised
EZ Mar Loans to Non-Fin, 3.3%, 3.1% previous, 3.2% revised
DE Mar Retail Sales MM Real, -0.6%, 0.8% forecast, -0.7% previous, -0.2% revised
DE Mar Retail Sales YY Real, 1.3%, 1.0% forecast, 1.3% previous
IT Apr CPI (EU Norm) Prelim MM, 0.5%, 0.7% forecast, 2.3% previous
IT Apr CPI (EU Norm) Prelim YY, 0.6%, 0.7% forecast, 0.9% previous
IT Apr Consumer Price Prelim MM, 0.1%, 0.2% forecast, 0.3% previous
IT Apr Consumer Price Prelim YY, 0.5%, 0.7% forecast, 0.8% previous
China's March industrial profit growth slows sharply to over 1-year low
EU's Barnier says rapid progress on Irish border needed by June
Pompeo says US open to "two-party solution" for Israeli-Palestinian conflict
Economic Data Ahead
(0830 ET/1230 GMT) U.S. Mar Consumption, Adjusted, 0.400% forecast, 0.200% previous
(0830 ET/1230 GMT) U.S. Mar Personal Income MM, 0.4% forecast, 0.4% previous
(0830 ET/1230 GMT) U.S. Mar Personal Consump Real, 0.00% previous
(0830 ET/1230 GMT) U.S. Mar Core PCE Price Index MM, 0.200% forecast, 0.200% previous
(0830 ET/1230 GMT) U.S. Mar Core PCE Price Index YY, 1.900% forecast, 1.600% previous
(0830 ET/1230 GMT) U.S. Mar PCE Price Index MM, 0.200% previous
(0830 ET/1230 GMT) U.S. Mar PCE Price Index YY, 1.800% previous
(0945 ET/1345 GMT) 13:45 U.S. Apr Chicago PMI, 57.9 forecast, 57.4 previous
(1000 ET/1400 GMT) U.S. Mar Pending Sales Change MM, 0.9% forecast, 3.1% previous
(1000 ET/1400 GMT) U.S. Mar Pending Homes Index, 107.5 previous
(0830 ET/1230 GMT) CA Mar Producer Prices MM, 0.7% forecast, 0.1% previous
(0830 ET/1230 GMT) CA Mar Producer Prices YY, 1.9% previous
Key Events Ahead
No major event scheduled
FX Beat
EUR/USD: Euro extends weakness ahead of German inflation data. The pair is trading 0.26% lower on the day at around 1.2093 at 1045 GMT. EUR/USD has shown a more than 85 pips jump from low of 1.20555. The pair’s recovery was due to profit booking and is currently trading around 1.21110. US GDP data came on Friday was slightly better than expected. The core PCE came at 2% y/y from 1.7% y/y Feb matched Fed expectations. The pair is facing major near term support is around 1.2050 and any break below will drag the pair down till 1.2000/1.1945. On the higher side, near term resistance is around 1.2150 (Support turned into resistance) and any convincing break above will take the pair to next level till 1.2200/1.2245/1.2290.Major bullishness only above 1.2320.
GBP/USD: Cable starts third week in the red. GBP/USD trades 0.38% lower on the day. Cable lost almost more than 180 pips in the previous week and continuing its weakness in this week after breaking low of 1.37473 (Apr 27th low). The pair declined almost more than 40 pips and hits intraday low of 1.37126 and is currently trading around 1.37231. the pair is trading near long term support at 1.3710 and any close below confirms further weakness, a dip till 1.36500. On the higher side, nearby resistance is around 1.3800 and any break above targets 1.38650/ 1.3925/1.3960/1.4000. Any break above 1.4000 confirm minor bearish invalidation and a jump till 1.4100 is possible.
USD/JPY: USD/JPY holds above 109 handle, finds strong support at 110-EMA at 108.94. US flash Q1 GDP figures surprised to the upside on Friday, showed the economy is expanding at an annualized 2.3%. US economic growth has been picking up at a noticeable pace as evidenced by indicatots, thereby propping up the likelihood of further rate hikes. Technical studies are also biased higher. We see scope for test of 200-DMA at 110.22. Break below 108.94 will see minor weakness. Bullish invalidation likely below 20-DMA at 107.68.
AUD/USD: AUD/USD down 0.43% on the day. Technical studies are highly bearish. Price action below cloud and major moving averages. The major is currently struggling at channel base support, breach there could see major weakness. We see scope for test of 0.7501 (Dec 8 lows) ahead of 0.7450 levels (channel base on weekly charts). Break above 5-DMA at 0.7572 could see minor bullishness. Bearish invalidation only above 20-DMA at 0.7683.
Equities Recap
World stocks buoyed by investors' improved risk appetite. Easing tensions between North and South Korea along with big ticket M&As keep sentiment buoyed.
The pan-European STOXX 600 index surged 0.10 percent at 385.04 points, while the FTSEurofirst 100 index was up 0.10 percent to 4,318.00 points.
Britain's FTSE 100 trades 0.47 percent up at 7,537.77 points, while mid-cap FTSE 250 gained 0.46 percent to 20,365.72 points.
Germany's DAX rose 0.17 percent at 12,601.70 points; France's CAC 40 trades 0.23 percent higher at 5,495.75 points.
Commodities Recap
Gold edges lower as dollar steadies. Spot gold had fallen 0.3 percent to $1,318.23 per ounce by 0639 GMT. U.S. gold futures for June delivery declined 0.3 percent to $1,319.20 per ounce.
Silver was down 0.6 percent at $16.40 per ounce, Platinum was down 0.5 percent at $906.00 per ounce and Palladium fell 0.5 percent to $969.22 per ounce.
Oil prices dipped on Monday after a rising US rig count suggested higher production levels. Brent crude futures fell 50 cents, or 0.7 percent, to $74.14 a barrel by 0633 GMT. U.S. West Texas Intermediate (WTI) crude futures were at $67.82 a barrel, down 28 cents, or about 0.4 percent.
Treasuries Recap
U.S.: The U.S. 10-year Treasury yield retreated back from the 3.00 mark on Monday, with bond prices remaining tad lower during the day in muted session that witnessed data of little economic significance. However, it will be a busy week in the US, with the FOMC decision due on Wednesday and the labor market release on Friday. Having tightened monetary policy at its previous meeting, policymakers will likely refrain from raising the Fed Funds Rate further this time, in particular given that there will be no updated economic forecasts and dot-plots released after this meeting. The yield on the benchmark 10-year Treasuries rose 1/2 basis point to 2.96 percent, the super-long 30-year bond yields also hovered tad higher at 3.12 percent and the yield on the short-term 2-year traded nearly 1 basis point up at 2.49 percent.
UK: The UK gilts jumped during European session Monday ahead of several lower-tier releases that will provide useful information on growth at the start of Q2. Most significantly, the PMI reports tomorrow, Wednesday and Thursday will shed light on whether activity rebounded in the manufacturing, construction and services sectors once March’s poor weather and the Easter holidays were out of the way. The yield on the benchmark 10-year gilts, slumped 2 basis points to 1.42 percent, the super-long 30-year bond yields fell 1 basis point to 1.84 percent and the yield on the short-term 2-year traded nearly 1-1/2 basis points lower at 0.78 percent
EUR: The German bunds lost Monday even as the country’s retail sales for the month of March missed market expectations, with all eyes on the consumer price inflation (CPI) data for the month of April, scheduled to be released today by 12:00GMT for detailed direction in the debt market. The German 10-year bond yields, which move inversely to its price, rose nearly 1-1/2 basis points to 0.57 percent, the yield on 30-year note remained tad higher at 1.24 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.56 percent.
NZD: New Zealand bonds closed Monday’s session on a sharply higher note after the United States 10-year note yield slipped below the 3 percent psychological mark after weak consumer spending data muted a better-than-expected initial first-quarter read on economic growth. At the time of closing, the yield on the benchmark 10-year note, which moves inversely to its price, slumped 5 basis points to 2.85 percent, the yield on the long-term 20-year note plunged 6-1/2 basis points to 3.41 percent and the yield on short-term 2-year closed 2-1/2 basis points lower at 1.89 percent.
JGBs: Japanese markets remain closed today on account of Showa Day.
AUD: Australian bonds gained across the curve on Monday as disappointing economic data pushed back expectations for the Reserve Bank of Australia (RBA) interest rate hike. The RBA is scheduled to hold its next monetary policy meeting on May 1, where the central bank is widely expected to repeat the same policy statement. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 5 basis points to 2.785 percent, the yield on the long-term 30-year Note also dipped 5-1/2 basis points to 3.344 percent and the yield on short-term 2-year down 3 basis points to 2.066 percent.
