Market Roundup
- EUR/USD -0.46%, USD/JPY 0.54%, GBP/USD -0.31%, EUR/GBP -0.18%
- DXY 0.43%, DAX -0.28%, FTSE -0.09%, Brent -0.27%, Gold -0.48%
- The 10-year U.S. Treasuries yield hit its highest level since January 2014 at 2.99%
- EZ Apr Markit Composite Flash PMI, 55.2, 54.9 forecast, 55.2 previous
- EZ Apr Markit Service Flash PMI, 55, 54.6 forecast, 54.9 previous
- EZ Apr Markit Manufacturing Flash PMI, 56, 56.1 forecast, 56.6 previous
- Germany Apr Markit Manufacturing Flash PMI, 58.1, 57.5 forecast, 58.2 previous
- Germany Apr Markit Service Flash PMI, 54.1, 53.7 forecast, 53.9 previous
- Germany Apr Markit Composite Flash PMI, 55.3, 54.8 forecast, 55.1 previous
- France Apr Markit Manufacturing Flash PMI, 53.4, 53.5 forecast, 53.7 previous
- France Apr Markit Service Flash PMI, 57.4, 56.5 forecast, 56.9 previous
- France Apr Markit Composite Flash PMI, 56.9, 55.9 forecast, 56.3 previous
- Trade war negative for economy says Fed's Williams - El Pais
- Eurozone debt, deficit drop in 2017 as the economy grows
- Greece attains primary surplus of 4.0 pct of GDP in 2017- statistics service
- EU willing to provide some financial market access for Britain - City minister
- Mexico's Nieto hopes for reworked NAFTA deal soon
Economic Data Ahead
- (0830 ET/1230 GMT) The Federal Reserve Bank of Chicago will release its Chicago Fed National Activity Index (CFNAI) for the month of March. The index stood at 0.88 in the prior month.
- (0830 ET/1230 GMT) Statistics Canada will release its wholesale trade figures for the month of February. The indicator is likely to have increased by 0.5 percent, after rising 0.1 percent in January.
- (0945 ET/1345 GMT) Financial firm Markit releases preliminary U.S. composite PMI for the month of April. The index posted a reading of 54.2 in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index rose to 54.0 in April after posting similar gains in the previous month.
- (0945 ET/1345 GMT) Financial firm Markit releases preliminary U.S. Manufacturing PMI for the month of April. The index is likely to show a reading of 55.0 after printing a reading of 55.6 in March.
- (1000 ET/1400 GMT) National Association of Realtors is likely to report that U.S. existing home sales rose 0.2 percent to an annual rate of 555,000 million units in March from a reading of 5.54 million units the month before.
Key Events Ahead
- (1000 ET/1400 GMT) The European Central Bank Executive Board member Benoît Cœuré participates in a conference on 'Resolution in Europe: The Unresolved Questions' - Frankfurt
- (1530 ET/1930 GMT) Bank of Canada Governor Stephen Poloz and Carolyn A. Wilkins participate in House of Commons Standing Committee on Finance – Ottawa
FX Beat
DXY: The dollar index surged to a near 2-month peak as the 10-year treasury yields arrived a touching distance of the 3 percent key figure and on monetary policy divergence. The greenback against a basket of currencies trades 0.5 percent up at 90.69, having touched a high of 90.74 earlier, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at 87.20 (Highly Bullish) by 1100 GMT.
EUR/USD: The euro slumped to a 2-week low amid talks that European Central Bank policymakers feel it is still too early to announce a timetable for winding down its bond buying. Moreover, increasing bid tone surrounding the greenback, supported by renewed pick up in U.S. yields also weighed heavily on the major. The European currency traded 0.5 percent down at 1.2229, having touched a low of 1.2225 earlier, its lowest since Apr. 6. FxWirePro's Hourly Euro Strength Index stood at -35.45 (Neutral) by 1100 GMT. Immediate resistance is located at 1.2421 (Mar. 28 High), a break above targets 1.2476 (Mar. 27 High). On the downside, support is seen at 1.2215 (Apr. 6), a break below could drag it near 1.2187 (Feb. 28).
USD/JPY: The dollar rallied to a 2-1/2 month peak as easing concerns over global political risks and a rise in the 10-year Treasury yield weighed on the Japanese currency. On Saturday, North Korea stated that it would immediately suspend nuclear and missile tests, discard its nuclear test site and pursue economic growth and peace instead. The major was trading 0.6 percent up at 108.22, having hit a high of 108.28 earlier, its highest since Feb. 13. FxWirePro's Hourly Yen Strength Index stood at 23.07 (Neutral) by 1100 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. preliminary Markit manufacturing PMI and existing homes sales. Immediate resistance is located at 108.50, a break above targets 108.88 (Feb. 12 High). On the downside, support is seen at 107.25 (5-DMA), a break below could take it lower 106.77 (Apr. 6 Low).
GBP/USD: Sterling slumped to a 1-month low as investors doubted whether the Bank of England would hike interest rates in May following weaker-than-expected economic data and cautious comments from BoE governor Mark Carney. The major traded 0.4 percent down at 1.3948, having hit a low of 1.3943 earlier, it’s lowest since Mar. 19. FxWirePro's Hourly Sterling Strength Index stood at -160.87 (Highly Bearish) by 1100 GMT. Immediate resistance is located at 1.4090 (Previous Session High), a break above could take it near 1.4131 (21-DMA). On the downside, support is seen at 1.3925 (Mar. 14 Low), a break below targets 1.3874 (Mar. 13 Low). Against the euro, the pound was trading 0.05 percent up at 87.67 pence, having hit a low of 87.91 pence the session before, it’s lowest since Mar. 27.
USD/CHF: The Swiss franc fell to a 4-1/2 month trough as a rise in U.S. Treasury yields supported the bid tone around the greenback. The major trades 0.1 percent up at 0.9759, having touched a high of 0.9776 earlier, it’s highest since Jan. 11. FxWirePro's Hourly Swiss Franc Strength Index stood at 89.23 (Slightly Bullish) by 1000 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 0.9681 (5-DMA) and any close below that level will drag it till 0.9635 (10-DMA).
Equities Recap
European shares slumped, weighed down by downbeat results from Switzerland's biggest bank, while the greenback rallied following a rise in U.S. Treasury yields.
The pan-European STOXX 600 index traded 0.1 percent down at 381.60 points, while the FTSEurofirst 300 index fell 0.05 percent to 1,566.12 points.
Britain's FTSE 100 trades 0.05 percent down at 7,366.66 points, while mid-cap FTSE 250 gained 0.2 percent to 20,267.32 points.
Germany's DAX fell 0.1 percent at 12,528.67 points; France's CAC 40 trades 0.1 percent lower at 5,407.49 points.
Commodities Recap
Crude oil steadied as the overall picture for crude remained bullish, however, the prospect of further output rise after another increase in the weekly rig count limited the upside. International benchmark Brent crude was trading 0.4 percent up at $73.99 per barrel by 1057 GMT, having hit a high of $74.71 on Thursday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.05 percent up at $68.15 a barrel, after rising as high as $69.53 on Thursday, its highest since Nov. 2014.
Gold prices declined to their lowest level in nearly two weeks, as the dollar rallied on the back of rising U.S. Treasury yields and as global political concerns eased. Spot gold was down about 0.6 percent at $1,328.31 per ounce at 1059 GMT, having hit a low of $1,327.06 an ounce earlier, its lowest since Apr. 9. U.S. gold futures fell 0.2 percent to $1,336.30 per ounce.
Treasuries Recap
The U.S. 10-year Treasury yield jumped to over 4-year high as investors braced for a higher rate of inflation going forward and expectations of more rate hikes by the Federal Reserve this year. The yield on the benchmark 10-year Treasuries jumped nearly 3 basis points to 2.97 percent, the super-long 30-year bond yields surged close to 2-1/2 basis points to 3.16 percent and the yield on the short-term 2-year traded 1 basis point lower at 2.46 percent.
The German 10-year bund prices slumped to over 1-month low, succeeding similar trend in the U.S. Treasuries, which is likely to hit the 3.00 psychological mark, in a scenario of improving risk appetite, following a plethora of geopolitical causes and impacts. The German 10-year bond yields, which move inversely to its price, jumped 4-1/2 basis points to 0.63 percent, the yield on 30-year note also surged nearly 4-1/2 basis points to 1.29 percent while the yield on short-term 2-year traded 2 basis points higher at -0.53 percent
The New Zealand 10-year government bond yields close Tuesday’s session at near 6-week high, after the United States’ benchmark counterpart was seen approaching 3 percent, with yields up since January 2014 as Asian stocks struggled to overcome the market dip ahead of an array of earnings from the world’s largest corporations. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, jumped 5 basis points to 2.93 percent, the yield on the long-term 20-year note surged 4 basis points to 3.51 percent and the yield on short-term 2-year closed 1/2 basis point higher at 1.97 percent.
The Japanese government bonds edged slightly on the downside, tracking similar movement in the U.S. 10-year benchmark counterpart, which hit its highest in over 4 years, following disappointment in the Asian stocks as investors awaited the earnings result from the world's largest corporations. The yield on the benchmark 10-year JGBs, which moves inversely to its price, remained tad higher at 0.06 percent, the yield on the long-term 30-year note rose 1 basis point to 0.74 percent and the yield on short-term 2-year too traded nearly 1 basis point higher at -0.12 percent.
The Australian bonds slumped across the board on the first day of the trading week following weakness in the U.S. Treasuries, where the latter’s 10-year yields rose to highest since January 2014. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 4-1/2 basis points to 2.867 percent, the yield on the long-term 30-year Note jumped 3-1/2 basis points to 3.429 percent and the yield on short-term 2-year also surged 2 basis points to 2.147 percent.
