Market Roundup
- Fed needs to ‘get on with’ rate hikes, Harker says
- BoJ Funo: Market risk aversion could weigh on sentiment
- BoJ Funo: CAPEX, suggests fiscal stimulus needed
- BoJ Funo: True FX one channel in which monetary policy effects economy
- BoJ Funo: Won’t hesitate to ease again if recovery threatened
- Japan Econ Min Ishihara: Up to PM Abe to decide on sales tax hike
- Japan Econ Min Ishihara: See no change to Japan’s solid economic fundamentals
- Japan Mar Reuters Tankan 6 vs 7 previous
- Brussels bomb suspect arrested-Belgian newspaper DH
- Swiss Mar ZEW investor sentiment 2.5 vs -5.9 previous
- Woodside scraps Australian Browse LNG project as glut bites
- GBP 3mth option expiry date now falls beyond June 23 Brexit referendum
- Latest ICM poll says 43% of Brits want to leave EU, 41% want to stay
- Brexiteer Boris Johnson addresses Brexit risk in TSC testimony
Economic Data Ahead
- (0800 ET/1200 GMT) Brazil's consumer prices as measured by the IPCA-15 index are likely to have risen 0.55 percent in the month to mid-March, after posting 1.42 percent rise in the month to mid-February. Consumer prices are expected to have risen 10.08 percent in the 12 months through mid-March, easing from 10.84 percent in the year to mid-February.
- (0800 ET/1200 GMT) Brazil's non-seasonally adjusted jobless rate is likely to have edged up to 8.1 percent in February from 7.6 in January.
- (1000 ET/1400 GMT) New U.S. single-family home sales are expected to have gained 3.2 percent to an annual rate of 510,000 units, according to a Reuters survey of economists.
- (1000 ET/1400 GMT) Mexico's retail sales are likely to have increased 1.3 percent in January from December, after declining 1.6 percent in the prior month.
- (1000 ET/1400 GMT) Swiss National Bank releases its Quarterly Bulletin.
- (1030 ET/1430 GMT) The Energy Information Administration reports its Crude Oil Stocks for the week ending March 18, which is likely to have increased to 3.000M from 1.317M.
- (1100 ET/ 1500 GMT) Argentina's government releases its trade balance figures for February. The data showed a $160 million trade deficit in the month of January.
- (1745 ET/2145 GMT) The Statistics New Zealand releases its trade balance data for the month of February. The economy posted a trade deficit of $8 million in January.
Key Events Ahead
- (1730 ET /2130 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker gives welcome remarks before the "Book Launch: Shared Prosperity in America's Communities" event.
FX Beat
USD: The dollar index which tracks the dollar against a basket was currencies, inched about 0.18 percent higher to 95.852. The short term trend is slightly bullish as long as support 95 holds. On the lower side any break below 95 will drag the pair till 94.50/94/93.16. Any break above major resistance 95.75 will take the index till 96.05/96.55/97.10.
EUR/USD: The euro edged down about 0.20 percent to 1.1192, having touched sessions low of 1.1180. Earlier in the session it made a high of 1.1223, before falling down to its current levels. Intraday trend is weak as long as support 1.1260 holds. On the lower side any break below 1.1178 will drag the pair down till 1.1155/1.1100. Any break above 1.1260 will confirm minor bullishness for the intraday, a jump till 1.1300/1.1350 is possible. The short term bearish invalidation is only above 1.13500.
USD/JPY: The yen lost ground against its U.S. counterpart, as the dollar advanced to 112.76 yen. The dollar trades around 112.65 yen, having recovered after making a low of 111.37. The short term trend is slightly bullish as long as support 112 holds. On the lower side major support is around 112 and break below targets 111.35/110.65. The major resistance is around 112.85 and break above targets 113.60/114.25.
GBP/USD: Sterling edged down 0.21 percent to 1.4176 after falling more than 1 percent to 1-week lows against the dollar following news of the attacks and on fears that more voters would favour Britain leaving the EU in a June referendum. It was back on the defensive against derivatives allowing investors to insure themselves against sharp moves in sterling exchange rates ahead of that vote soared. The pound was the bigger loser among major currencies after the Brussels attacks and "Brexit" referendum concerns . The pair has slightly recovered after making a low of 1.4155. It is currently trading around 1.4166. The short term trend is weak as long as resistance 1.4250 holds. Any break above will take the pair to next levels at 1.4320/1.4350. The minor resistance is around 0.7180/0.7230. The short term bearish invalidation is only above 1.4520. On the lower side any break below 1.415 will drag the pair down till 1.4100/1.405
USD/CHF: The pair has retreated after making a high of 0.97666 and trades around 0.97327. The short term trend is slightly bullish as long as support 0.9680 holds. The pairs major support is around 0.9680 and any break below will drag the pair down till 0.960/0.9650/0.9528 level. On the higher side minor resistance is around 0.9800 and any break above targets 0.9855/0.9900. The short term bearish invalidation is only above 0.9800.
AUD/USD: The Australian dollar edged down around 0.2 percent to 0.7597, having touched session's low of 0.7576. The Aussie has retreated after making a high of 0.7648. The short term trend is slightly weak as long as resistance 0.7650 holds. On the higher side major resistance is around 0.7680 and break above targets 0.7725/0.7750. The minor resistance is around 0.7650. The pair’s major support is around 0.7550 and break below will drag the pair till 0.7500/0.7430. The Aussie was little changed against the safe-haven Japanese currency at 85.59 yen, having recovered from a slide to 84.08 overnight.
NZD/USD: The New Zealand dollar trades 0.50 percent lower at 0.6716, having gone as low as 0.6693, earlier in the session. Trader continue to remain bearish on the pair. On the downside, immediate support is located at 0.6693 (Session's Low), while on the upside, resistance is located at 0.6776 (Previous Session High). Against the yen. thee kiwi shed 0.3 percent to 75.63 yen .
Equities Recap
European shares bounced back from the concerns over security that hurt investors confidence, facilitated by positive signals on the health of the world's major economies.
The pan-European FTSEurofirst 300 index rose half a percent as all of its major markets gained solidly, Germany's DAX rose 0.7 pct, France's CAC edged up 0.2 pct, while UK's FTSE was flat.
Tokyo's Nikkei average declined 0.28 pct at 17,000.98. MSCI's broadest index of Asia-Pacific shares outside Japan dropped almost 0.5 percent, its first decline in six days.
Shanghai Composite index gained 0.4 pct at 3,009.96 points, while CSI300 index ended up 0.3 pct at 3,236.09 points. HK’s Hang Seng index edged down 0.3 pct at 20,615.23 points.
Commodities Recap
Oil prices eased after figures from an industry group showed U.S. crude stockpiles increased last week by more than expected, reinforcing concerns that a global glut continues without any reduction. Brent crude was down 25 cents a barrel at $41.54, still up more than 50 percent from a multi-year low of $27.10 hit in January. U.S. crude futures declined to $41.03 a barrel by 1055 GMT.
Gold edged lower, with the impact of a stronger dollar outweighing the metal's safe-haven appeal. Spot gold had declined 1.16 percent to $1,233.47 an ounce by 1106 GMT, while U.S. gold also slipped to $1233.20.
Treasuries Recap
The 10-year U.S. Treasury yield stood at 1.945 percent versus previous close of 1.935 percent.
European government bond markets have opened with a risk on bias, with core bond yields up around 1.5bp. 10-yr Bunds are slightly underperforming as the yield rises 2bp to 0.235%. Peripheral bonds are tightening relative to Bunds with both Italy and Spain 1.5bp tighter at 1.265% and 1.455% respectively. 10-yr Portugal tightens the most by around 2.75bp relative to Bunds with its yield falling 0.5bp to 2.79%.
Japanese government bond prices pared earlier losses and edged up in response to strong liquidity-enhancing auction results. The benchmark 10-year JGB yield was down half a basis point at minus 0.105 percent after initially touching minus 0.080 percent. June 10-year futures was up 0.08 point at 151.80 after slipping to 151.53. Super long JGBs lagged, however, with the maturities vulnerable to selling pressure following the previous day's steep rally. The 30-year yield was up 3 basis points at 0.445 percent after touching a record low of 0.415 percent on Tuesday.Yields of JGBs with maturities of around 12 years are below zero, and investor demand has increased for 20-year and 30-year super longs that still offer positive yields.
Gilts opened 38 ticks lower than the settlement of 120.77 as core markets reversed the flight to quality noted from the Brussels attacks yesterday.
Australian government bond futures declined, with both the 3-year and 10-year bond contracts down 6 ticks at 97.970 and 97.3400 respectively. New Zealand government bonds eased, sending yields up to 6.5 basis points higher.
