Market Roundup
- EUR/USD -0.11%, USD/JPY 0.19%, GBP/USD 0.08%, EUR/GBP -0.16%
- DXY 0.12%, DAX 0.6%, FTSE -0.09%, Brent 0.48%, Gold -0.36%
- China blames U.S for trade frictions, says negotiations currently impossible
- China should invest in assets other than Treasuries - c.bank adviser
- Kuroda says BOJ will eventually need to normalise policy
- Germany Feb Trade Balance, EUR, SA, 19.2 bln, 21.4 bln forecast, 21.3 bln previous, 21.5 bln revised
- Germany Feb Exports MM SA, -3.20%, 0.20% forecast, -0.50% previous, -0.40% revised
- Germany Feb Imports MM SA, -1.3%, 0.3% forecast, -0.50% previous, -0.2% revised
- EZ Apr Sentix Index, 19.6, 20.0 forecast, 24.0 previous
- UK house prices rise more than expected in March - Halifax
- UK watchdog reviews cryptocurrencies, Brexit stretches resources
Economic Data Ahead
- (1030 ET/1430 GMT) The Bank of Canada will release its Business Outlook Survey.
Key Events Ahead
- (0900 ET/1300 GMT) ECB Vice President Vitor Constancio presents the ECB Annual Report 2017 at the ECON Committee-Brussels, Belgium
- (1100 ET/1500 GMT) U.S. Treasury announces 4-week bills (e: $55 bn)
- (1130 ET/1530 GMT) U.S. Treasury auctions $48 13-week and $42 bn 26-week bills
- (1145 ET/1545 GMT) U.S. FedTrade 30-year Fannie Mae / Freddie Mac (max $780 mn)
- (1245 ET/1645 GMT) ECB Executive Board member and chief economist Peter Praet participates in a meeting of the European Finance Forum e.V.-Frankfurt
FX Beat
DXY: The dollar index held gains as concerns of an escalating trade conflict prompted investors to trim their record bearish bets against the greenback. The greenback against a basket of currencies trades 0.1 percent up at 90.19, having touched a high of 90.60 on Friday, its highest since Mar. 1. FxWirePro's Hourly Dollar Strength Index stood at 96.22 (Slightly Bullish) by 1000 GMT.
EUR/USD: The euro declined as investor morale in the euro zone deteriorated for the third month in April on concerns about a slowdown in global growth. The selling around the major intensified after data showed German exports plunged unexpectedly in February, recording their biggest monthly drop in 2-1/2 years and narrowing the trade surplus. The European currency traded 0.1 percent down at 1.2266, having touched a low of 1.2215 on Friday, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at -52.28 (Bearish) by 1000 GMT. Immediate resistance is located at 1.2314 (10-DMA), a break above targets 1.2344 (Apr. 2 High). On the downside, support is seen at 1.2239 (Mar 20 Low), a break below could drag it lower 1.2215 (Apr. 6 Low).
USD/JPY: The dollar steadied above the 107.00 handle as rising stock markets signalled a return in risk appetite. However, investors remained wary about trade tensions between the United States and China. The major was trading 0.2 percent up at 107.14, having hit a high of 107.49 on Friday, its highest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at -74.00 (Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, amid a lack of economic data from the U.S. docket. 0Immediate resistance is located at 107.29 (Mar. 13 High), a break above targets 107.52 (Feb. 28 High). On the downside, support is seen at 106.70 (5-DMA), a break below could take it lower 106.37 (10-DMA).
GBP/USD: Sterling rallied to a near 2-week peak as data showing British house prices rising more than expected in March bolstered expectations that the Bank of England will raise rates next month by a quarter percentage point. Moreover, concerns about Brexit have abated since Britain signed a transition agreement last month to cover the 21-month period after it leaves the European Union. The major traded 0.1 percent up at 1.4099, having hit a high of 1.4118 earlier, it’s highest since Mar. 28. FxWirePro's Hourly Sterling Strength Index stood at 55.86 (Bullish) by 1000 GMT. Immediate resistance is located at 1.4171 (Mar. 23 High), a break above could take it near 1.4200 (Mar. 28 High). On the downside, support is seen at 1.4053 (5-DMA), a break below targets 1.4012 (Mar 30 Low). Against the euro, the pound was trading 0.2 percent up at 87.00 pence, having hit a high of 86.97 pence earlier, it’s highest since Mar 22.
USD/CHF: The Swiss franc eased, having declined to a 2-1/2 month low in the previous session, as trade tensions between the United States and China receded. The major trades 0.1 percent up at 0.9603, having touched a high of 0.9649 the day before, it’s highest since Jan. 18. FxWirePro's Hourly Swiss Franc Strength Index stood at -51.22 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9684 (Jan 15 High) and any break above will take the pair to next level till 0.9748 (Dec 29 High). The near-term support is around 0.9555 (10-DMA) and any close below that level will drag it till 0.9523 (21-DMA).
Equities Recap
European shares rose in early deals, while the greenback steadied against a basket of currencies on hopes that a full-blown trade war between the United States and China could be averted.
The pan-European STOXX 600 index surged 0.3 percent to 376.04 points, while the FTSEurofirst 300 index rallied 0.4 percent to 1,474.86 points.
Britain's FTSE 100 trades 0.1 percent up at 7,188.26 points, while mid-cap FTSE 250 fell 0.2 percent to 19,497.25 points.
Germany's DAX rose 0.7 percent at 12,333.31 points; France's CAC 40 trades 0.3 percent higher at 5,273.00 points.
Commodities Recap
Crude oil prices rebounded after slumping around 2 percent last Friday on concerns over an intensifying trade dispute between the United States and China, and rising U.S. drilling activity. International benchmark Brent crude was trading 0.5 percent up at $67.36 per barrel by 1022 GMT, having hit a low of $66.86 on Wednesday, its lowest since Mar. 20. U.S. West Texas Intermediate was trading 0.3 percent up at $62.14 a barrel, after falling as low as $61.84 on Friday, its weakest since Mar. 19.
Gold prices declined, reversing most of its previous session gains as investors awaited developments on the simmering trade war between the United States and China. Spot gold was down 0.4 percent at $1,327.32 an ounce as of 1024 GMT, having touched a low of $1,319.36 on Friday, its lowest its Mar. 21. U.S. gold futures were nearly unchanged at $1,335.70 an ounce.
Treasuries Recap
The U.S. Treasuries plunged ahead of the short-term 3-year note auction and the producer price index (PPI) data, scheduled to be released on April 10 by 17:00GMT and 12:30GMT respectively. The yield on the benchmark 10-year Treasuries jumped 2-1/2 basis points to 2.79 percent, the super-long 30-year bond yields remained also climbed nearly 2-1/2 basis points to 3.03 percent and the yield on the short-term 2-year traded nearly a basis point higher at 2.28 percent.
The UK gilts lost ground as investors hope to see a rise in the country’s manufacturing production for the month of February, scheduled to be released on April 11 by 08:30GMT. The yield on the benchmark 10-year gilts, jumped nearly 2 basis points to 1.41 percent, the super-long 30-year bond yields climbed 1 basis point to 1.78 percent and the yield on the short-term 2-year traded 2-1/2 basis points higher at 0.88 percent
The German bunds suffered after investors have largely shrugged-off the country’s lower-than-expected trade balance for the month of February, released early today. The German 10-year bond yields, which move inversely to its price, rose nearly 1 basis point to 0.50 percent, the yield on 30-year note climbed a little above 1 basis point to 1.16 percent and the yield on short-term 2-year traded flat at -0.58 percent.
The New Zealand government bonds gained at the time of closing as investors remained muted in a silent trading week amid a host of two-tier economic data, scheduled to be released through this week. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, fell 1 basis point to 2.81 percent, the yield on the long-term 20-year note also slid 1 basis point to 3.41 percent and the yield on short-term 2-year closed 2 basis points lower at 1.92 percent
The Japanese government bonds remained tad higher after the country’s current account balance for the month of February narrowly missed market estimates, albeit rising in comparison to that in January on a non-seasonally adjusted basis. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, remained tad lower at 0.03 percent, the yield on the long-term 30-year note hovered around 0.74 percent and the yield on short-term 2-year edged slightly lower at -0.14 percent.
The Australian government bonds traded narrowly mixed at the start of the week as investors preferred to stay on the sidelines ahead of Reserve Bank of Australia (RBA) Governor Philip Lowe speech, amid nervousness about global trade tensions. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, traded nearly flat at 2.670 percent, the yield on the long-term 30-year note remained steady at 3.259 percent and the yield on short-term 2-year also fell 1 basis point to 2.036 percent.
