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Europe Roundup: Sterling eases on renewed Brexit concerns, euro declines as ECB policymakers doubt projected growth rebound, European shares surge - Tuesday, April 16th, 2019

Market Roundup

  • EUR/USD -0.09%, USD/JPY -0.12%, GBP/USD -0.11%, EUR/GBP 0.05%
     
  • DXY 0.04%, DAX 0.6%, FTSE 0.37%, Brent 0.07%, Gold -0.32%
     
  • Great Britain Mar Claimant Count Unemployment change, 28.3k, 20.0k f'cast, 27.0k prev 26.7k rvsd
     
  • Great Britain Feb ILO Unemployment Rate, 3.9%, 3.9% f'cast, 3.9% prev
     
  • Great Britain Feb Avg Wk Earnings 3M YY, 3.5%, 3.5% f'cast, 3.4% prev 3.5% rvsd
     
  • Great Britain Feb Avg Earnings (Ex-Bonus), 3.4%, 3.4% f'cast, 3.4% prev 3.5% rvsd
     
  • Germany Apr ZEW Economic Sentiment, 3.1, 0.8 f'cast, -3.6 prev
     
  • Germany Apr ZEW Current Conditions, 5.5, 8.0 f'cast, 11.1 prev
     
  • EU's Tusk says "dream" of Brexit U-turn not dead
     
  • China's policy stimulus may worsen economic distortions - OECD
     
  • Japan and U.S. hold "frank and good" trade talks - economy minister
     

Economic Data Ahead

  • (0830 ET/1230 GMT) Statistics Canada releases manufacturing shipments data for the month of February. Manufacturing sales are likely to have stayed flat after rising 1 percent in January.
     
  • (0830 ET/1230 GMT) Statistics Canada will report foreign portfolio investment in domestic stocks for the month of February.
     
  • (0830 ET/1230 GMT) Statistics Canada will release investment in foreign securities figures for the month of February.
     
  • (0915 ET/1315 GMT) The Federal Reserve is likely to report that industrial production rose 0.2 percent in March after staying unchanged in the prior month.
     
  • (0915 ET/1315 GMT) The Federal Reserve Board is expected to report that capacity utilization edged up to 79.1 percent in March after posting similar gains in February.
     
  • (1000 ET/1400 GMT) The National Association of Home Builders (NAHB) is expected to report that U.S. Housing Market Index rose to 63 in April after posting an increase of 62 in March.
     
  • (1630 ET/230 GMT) API reports its weekly crude oil stock.
     

Key Events Ahead

  • (1300 ET/1700 GMT) Irish central bank governor Philip Lane to speak on "tail risks in the Irish economy" in Dublin
     
  • (1400 ET/1800 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in a dorum hosted by Dallas Fed's El Paso branch in Hobbs, New Mexico
     
  • (1430 ET/1830 GMT) The 12 Federal Reserve banks release "2019 Small Business Credit Survey: Report on Employer Firms"
     

FX Beat

DXY: The dollar index gained as investors awaited the U.S. industrial production data for the month of March, and FOMC member Kaplan’s speech. The greenback against a basket of currencies traded 0.05 percent up at 96.94, having touched a low of 96.75 on Friday, its lowest since Mar. 27. FxWirePro's Hourly Dollar Strength Index stood at -60.31 (Bearish) by 1000 GMT.

EUR/USD: The euro declined on news that several European Central Bank policymakers doubt the bank's economic projections as growth weakness in China and trade tensions linger. However, a survey showing sentiment among German investors improved for the sixth month in a row in April limited downside. The European currency traded 0.5 percent down at 1.1297, having touched a high of 1.1323 on Friday, its highest since Mar. 26. FxWirePro's Hourly Euro Strength Index stood at 58.53 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1331 (Mar. 25 High), a break above targets 1.1361 (Mar. 19 High). On the downside, support is seen at 1.1273 (Mar. 22 Low), a break below could drag it till 1.1213 (Mar. 28 Low).

USD/JPY: The dollar plunged below the 112.00 handle, as investors turned cautious as they looked for signs of stabilization in the global economy. However, hopes that the U.S. and China will resolve their trade dispute and sign a deal limited the downside. The major was trading 0.1 percent down at 111.89, having hit a high of 112.09 on Monday, its highest since Mar. 5. FxWirePro's Hourly Yen Strength Index stood at -35.31 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. capacity utilization, industrial production, housing market index and Fed Kaplan's speech. Immediate resistance is located at 112.60 (Dec. 20 High), a break above targets 113.24 (Dec. 5 High). On the downside, support is seen at 111.20 (Apr. 3 Low), a break below could take it lower at 110.53 (Mar. 20 Low).

GBP/USD: Sterling tumbled as investors remained cautious amid possibility of months of uncertainty in Britain as politicians struggle over how - or whether - to leave the European Union. However, data showing British workers' pay grew at its joint fastest pace in over a decade as employers extended their hiring spree supported the bid tone around the British pound. The major traded 0.1 percent down at 1.3083, having hit a high of 1.3132 on Friday; it’s highest since Apr. 4. FxWirePro's Hourly Sterling Strength Index stood at 12.93 (Neutral) 1000 GMT. Immediate resistance is located at 1.3121 (Apr. 5 High), a break above could take it near 1.3149 (Apr. 1 High). On the downside, support is seen at 1.3022 (Apr. 8 Low), a break below targets 1.3003 (Mar. 21 Low). Against the euro, the pound was trading 0.2 percent down at 86.37 pence, having hit a low of 86.57 on Friday, it’s lowest since Mar. 22.

USD/CHF: The Swiss franc slumped to a 1-month low as optimism over U.S.-China trade talks and strong Chinese economic data drove investors out of safe havens and into riskier currencies. The major trades 0.2 percent up at 1.0056, having touched a high of 1.0060; it’s highest since Mar. 13. FxWirePro's Hourly Swiss Franc Strength Index stood at -138.59 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0084 (Mar. 13 High) and any break above will take the pair to next level till 1.0124 (Mar. 7 High). The near-term support is around 0.9967 (Apr. 3 Low), and any close below that level will drag it till 0.9937 (Mar. 28 Low)

Equities Recap

European shares rallied for the fifth straight session, bolstered by gains in bank and retails stocks, while optimism over the U.S.-China trade talks helped investors retain risk appetite.

The pan-European STOXX 600 index gained 0.2 percent at 388.99 points, while the FTSEurofirst 300 index rallied 0.2 percent to 1,527.50 points.

Britain's FTSE 100 trades 0.4 percent up at 7,462.92 points, while mid-cap FTSE 250 gained 0.4 to 19,877.84 points.

Germany's DAX rose 0.6 percent at 12,096.99 points; France's CAC 40 trades 0.05 percent lower at 5,507.12 points.

Commodities Recap

Crude oil prices eased, weighed down by expectations of higher U.S. inventories and concern about Russia's willingness to stick with OPEC-led supply cuts. International benchmark Brent crude was trading 0.05 percent lower at $71.21 per barrel by 1033 GMT, having hit a high of $71.85 on Friday, its highest since Nov. 8. U.S. West Texas Intermediate was trading 0.05 percent down at $63.52 a barrel, after rising as high as $64.77 last week, its highest since the Nov. 1.

Gold prices declined, hovering towards an over 1-week low touched in the previous session, as positive economic data from major economies boosted risk appetite. Spot gold was trading 0.4 percent down at $1,283.04 per ounce by 1039 GMT. Ihaving touched a low of $1,282.43 on Monday, its lowest since April 4. U.S. gold futures shed 0.4 percent to $1,286.40.

Treasuries Recap

The U.S. Treasuries remained nearly flat on the second trading day of the week ahead of today’s industrial production data for the month of March, due for release at 13:15GMT and FOMC member Kaplan’s speech, also due today at 18:00GMT amid an otherwise muted session that witnessed data of little economic significance. The yield on the benchmark 10-year Treasury yield rose nearly 1-1/2 basis points to 2.565 percent, the super-long 30-year bond yields surged nearly 2 basis points to 2.980 percent and the yield on the short-term 2-year traded tad higher at 2.398 percent.

The German bunds slid during European trading session after the country’s ZEW economic sentiment data for the month of April rebounded; investors will now keep an eye over eurozone’s consumer price inflation (CPI) data for the month of March, due for release on April 17 by 09:00GMT. The German 10-year bond yields, which move inversely to its price, remained tad lower at 0.051 percent, the yield on 30-year note hovered around 0.716 percent and the yield on short-term 2-year traded nearly 1 basis point lower at -0.587 percent.

The Japanese government bonds closed higher ahead of the country’s trade balance data for the month of March and industrial production data for the month of February, scheduled to be released today and on April 17 by 23:50GMT and 04:30GMT respectively. The yield on the benchmark 10-year JGB note, which moves inversely to its price, jumped 7 basis points to -0.023 percent, the yield on the long-term 30-year surged 2-1/2 basis points to 0.545 percent and the yield on short-term 2-year plunged 16 basis points to -0.159 percent.

The Australian government bonds gained during Asian session after the Reserve Bank of Australia’s April meeting minutes hinted that the central bank is more inclined towards a rate cut rather than a rate hike. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, fell 2 basis points to 1.925 percent, the yield on the long-term 30-year bond also dipped 2 basis points to 2.547 percent and the yield on short-term 2-year traded 2-1/5 basis points lower at 1.503 percent.

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May 24 19:00 UTC Released

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106.9 %

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