Market Roundup
- EUR/USD -0.2%, USD/JPY +0.4%, GBP/USD -0.1%, EUR/CHF +0.1%
- DXY +0.3%, DAX +0.5%, FTSE +0.6%, Brent +0.2%, Copper +0.6%
- USD/JPY hits 8 week high at 113.63 in early London trade
- EUR/CHF rises to fresh 7-month high at 1.0923
- London copper edges up after losses on worries over China demand
- Great Britain Apr BRC Retail sales +5.6% y/y vs previous -1.0%
- Switzerland Apr Jobless rate unadjusted 3.3% vs previous 3.4%. 3.3% forecast
- Germany Mar Industrial output -0.4% m/m vs previous 1.8% revised -0.6% forecast
- German trade surplus narrows in March to 19.6bln from previous 21.2bln revised 20.9 forecast
- BoJ Gov Kuroda reiterated intention to keep easy policy till CPI target met
- Moody’s says BoJ becoming main source of affordable funding for government
- Bank of England to set out plans to open up interbank payments in coming months
Economic Data Ahead
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that building permits increased 5.5 percent in March after falling 2.5 percent in February.
- (0900 ET/1300 GMT) Mexico's annual inflation rate is expected to have increased 5.71 percent in March, while core annual inflation rate is likely to have edged up to 4.70 percent in the same period.
- (1000 ET/1400 GMT) The U.S. Labor Department releases Job Openings and Labor Turnover Survey (JOLTS) report for the month of March. The report is expected to show job openings eased to a seasonally adjusted 5.670 million from 5.743 million in February.
- (1000 ET/1400 GMT) The U.S. Census Bureau is likely to report that wholesale inventories declined 0.1 percent in March after posting a similar drop in the prior month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1645 ET/2045 GMT) The Statistics New Zealand will release Electronic Card Retail Sales figures for the month of April. The indicator posted a decline of 0.3 percent in the previous month.
- (1950 ET/2350 GMT) Japan releases Foreign Exchange Reserves report for the month of April.
Key Events Ahead
- (0900 ET/1300 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari speaks before the Minnesota High Tech Spring Conference at Minneapolis.
- (1245 ET/1645 GMT) FedTrade Operation 30-year Ginnie Mae (max $1.0 bn)
- (1305 ET/1705 GMT) Federal Reserve Bank of Boston President Eric Rosengren gives a luncheon speech before the Risk Management for Commercial Real Estate Conference hosted by the New York University Stern School of Business.
- (1615 ET/2015 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in a moderated Q & A session before the Dallas Regional Chamber Lower Middle Market Investment Summit.
FX Beat
DXY: The dollar rallied versus its major rivals, as the U.S. Treasury bond yields rose on the back of growing prospects for an eventual Fed rate-hike in June. The greenback against a basket of currencies rose 0.2 percent at 99.35, rebounding from a low of 98.50 hit on Monday, it’s lowest since Nov. 10. FxWirePro's Hourly Dollar Strength Index stood at 98.76 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro declined below the 1.0900 handle, following a pick-up in buying interest seen around the US dollar against its major peers, in the wake of rising U.S. Treasury yields. The European currency traded 0.3 percent down at 1.0887, having touched a high of 1.1021 on Monday, its highest since Nov. 09. FxWirePro's Hourly Euro Strength Index stood at 6.58 (Neutral) by 1000 GMT. The near term major resistance is around 1.1000 and any break above will take the pair to next level till 1.1020/ 1.1060 level. The 1.0837 (200- day MA) will be acting as short term trend reversal level, a break below targets 1.07850/1.0740 (61.8% retracement of 1.05694 and 1.10211).
USD/JPY: The dollar rallied to a near 2-month high above the 113.00 handle, as ongoing up-move in the US treasury bond yields, amid growing prospects for an eventual Fed rate-hike action, boosted the greenback. The major traded 0.5 percent up at 113.82, hovering towards a peak of 113.86 hit earlier in the session, its highest since Mar. 15. FxWirePro's Hourly Yen Strength Index stood at -105.35 (Highly Bearish) by 1000 GMT. The pair is facing support at 111.55 (100 EMA) and any weakness below will drag the pair down till 110.25 (61.8% retracement of 108.13 and 113.86). On the higher side, any close above 113.05 confirm minor bullishness, a jump till 115.50 likely.
GBP/USD: Sterling declined, extending previous session losses, however, it traded near recent seven-month highs, as investors’ awaited Bank of England inflation report and policy meeting this week for fresh incentives. Sterling eased 0.1 percent to 1.2923, having hit a high of 1.2987 on Monday, its highest since Sept. 30. FxWirePro's Hourly Sterling Strength Index stood at -6.37 (Neutral) by 1000 GMT. The pair is facing major resistance around 1.3000 and any violation above will accelerate the up move to 1.3060/1.3090.On the lower side, near term support is around 1.2850 and any break below will drag it till 1.27549 (Apr 21 low). Against the euro, the pound edged up 0.1 percent at 84.28 pence, having hit a 1-week high of 84.22 earlier in the day.
USD/CHF: The Swiss franc fell to a fresh 3-week low as the greenback rallied following a rebound in the U.S. Treasury yields. The major traded 0.4 percent up at 1.0023, hovering towards a high of 1.0031 touched earlier, its strongest since Apr. 18. FxWirePro's Hourly Swiss Franc Strength Index stood at -135.51 (Highly Bearish) by 1000 GMT. The minor resistance is around 1.0070 and any break above 1.01078 high formed on Apr 10 will take the pair till 1.0170 (Mar 3 high). On the lower side, major support is around 0.9812 and any break below will confirm minor trend reversal, a decline till 0.9750/0.9680 likely.
AUD/USD: The Australian dollar slumped to a 4-month lows following the release of downbeat retail sales figures, which reinforced expectations of steady interest rates in near term. The Aussie trades 0.4 percent lower at 0.7353, having hit a low of 0.7328 earlier, it’s weakest since Jan. 1. FxWirePro's Hourly Aussie Strength Index stood at -65.30 (Bearish) by 1000 GMT. On the lower side, near term support is around 0.7300 and any close below will drag the pair till 0.7200/0.71599. The near term resistance is around 0.7440 (support turned into resistance) and any break above targets 0.7517 (21- EMA)/0.7552 (200 day MA).
Equities Recap
European shares rose to 21-month highs, boosted by a recovery in resources stocks, while the greenback gained against the backdrop of increasing prospects of Fed rate-hike action.
The pan-European STOXX 600 index advanced 0.5 percent to 396.00 points, while the FTSEurofirst 300 index rallied 0.5 percent to 1,555.11 points.
Britain's FTSE 100 trades 0.5 percent up at 7,339.12 points, while mid-cap FTSE 250 gained 0.4 percent to 19,822.77 points.
Germany's DAX gained 0.53 percent at 12,762.25 points; France's CAC 40 trades 0.41 percent higher at 5,405.37 points.
Tokyo's Nikkei declined 0.26 percent to 19,843.00 points, Australia's S&P/ASX 200 index fell 0.6 percent to 5,835.00 points.
Shanghai composite index rose 0.1 percent to 3,080.53 points, while CSI300 index plunged 0.2 percent to 3,352.53 points. Hong Kong’s Hang Seng added 1.3 percent to 24,889.03 points.
Commodities Recap
Crude oil prices consolidated between narrow ranges, as concern over slowing demand and the rise in U.S. crude output weighed on market session. International benchmark Brent crude was trading flat at $49.44 per barrel by 1014 GMT, having hit a low of $46.63 last week, its weakest since Nov. 29. U.S. West Texas Intermediate gained 0.1 percent to $46.51 a barrel, after declining as low as $43.73 on Friday, its lowest since Nov. 15.
Gold prices edged down, having rebounded from their lowest in nearly eight weeks on Monday as safe-haven demand weakened on easing political worries. Spot gold traded lower at $1,224.50 per ounce by 1017 GMT, having hit a low of $1,220.82 the day before, its lowest since Mar 16. U.S. gold futures dropped 0.1 percent to $1,226.20 an ounce.
Treasuries Recap
The U.S. Treasuries lost ahead of a host of speeches from the Federal Open Market Committee (FOMC) members Neel Kashkari and Eric Rosengren lined up for later in the day. The yield on the benchmark 10-year Treasury jumped 1-1/2 basis points to 2.39 percent, the super-long 30-year bond yields also climbed nearly 1-1/2 basis points to 3.02 percent while the yield on short-term 2-year note traded 1/2 basis point higher at 1.33 percent.
The UK gilts continued to plunge as investors wait to watch the Bank of England’s (BoE) monetary policy meeting, scheduled to be held on May 11. The yield on the benchmark 10-year gilts, jumped 3-1/2 basis points to 1.18 percent, the super-long 30-year bond yields climbed 2 basis points to 1.84 percent and the yield on the short-term 2-year traded 1 basis point higher at 0.16 percent.
The German bunds plunged as investors defied the weaker-than-expected industrial production for the month of March. The yield on the benchmark 10-year bond, rose 1-1/2 basis points to 0.43 percent, the long-term 30-year bond yields jumped 2-1/2 basis points to 1.22 percent and the yield on the short-term 2-year bond traded nearly 1 basis point higher at -0.66 percent.
The New Zealand bonds ended today's session on a mixed note as investors wait to watch the Reserve Bank of New Zealand’s (RBNZ) monetary policy decision, scheduled to be unveiled on May 11. At the time of closing, the yield on the benchmark 10-year bond, fell 1 basis point to 3.12 percent, the yield on 7-year note also slipped 1 basis point to 2.78 percent while the yield on short-term 2-year note traded 1-1/2 basis point higher at 2.12 percent.
The Australian government bonds remained flat, tracking U.S. Treasuries as investors shrugged-off lower-than-expected retail sales for the month of March, released earlier today. The yield on the benchmark 10-year Treasury note, remained flat at 2.69 percent, the yield on 15-year note hovered around 3.10 percent while the yield on short-term 2-year traded 1-1/2 basis points lower at 1.74 percent.
