Market Roundup
- Japan Fin Min Aso: Current FX moves one-sided, rapid moves undesirable
- Aso: Will take necessary steps vs FX moves as needed
- MoF official – Recent FX market showing speculative moves – Jiji
- Japan Econ Min Ishihara: FX moves rough, yen rise not on fundamentals
- Chief Cabinet Secretary Suga: FX one-sided, excessive, will act as needed
- Japan Mar Consumer confidence index 41.7 vs 40.1 previous
- Australia PM to lead 1,000-strong business delegation to China next week
- EU set to fix EU summit for after UK referendum
- German Feb Exports 1.3%m/m vs -0.50% previous, 0.50% exp
- German Feb Imports 0.4%m/m vs 1.2% previous, -0.3% exp
- German Feb Trade balance, E19.8bn vs 18.9bn previous, 18.5bn exp
- German IG BCE union to seek wage hike of 5% for chemical sector
- Swiss Mar Unemployment rate unadjusted 3.6% vs 3.7%
- Swiss Mar Unemployment rate adjusted 3.5% vs 3.4%
- Swiss Mar CPI 0.3%m/m vs 0.2% previous, 0.3% exp
- Swiss Mar CPI -0.9%y/y vs -0.8% previous, -0.9% exp
- UK Feb Industrial output -0.3%m/m vs 0.3% previous, 0.1% exp
- UK Feb Industrial output -0.5%y/y vs 0.2% previous, 0.0% exp
- UK Feb Manufacturing output -1.1%m/m vs 0.7% previous, -0.2% exp
- UK Feb Manufacturing output -1.8%y/y vs -0.1% previous, -0.7% exp
- UK Feb Trade balance GBP-11.964bn vs -10.29bn previous, -10.2bn exp
- UK Feb Trade balance, non-EU, GBP-3.357bn vs -2.199bn previous, , -2.60bn exp
- UK PM Cameron admits he held stake in father’s offshore trust
- Ladbrokes quotes 2/1 Cameron replaced as PM this year
Economic Data Preview
- (0815 ET/1215 GMT) Canadian housing starts are likely to decline to 190,000 in March after rising to 212,594 units in February.
- (0830 ET/1230 GMT) Canada's labor market is expected to report that the economy added 10,000 jobs in March, rebounding from a decline of 2.3k in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada is likely to report that unemployment rate remained unchanged at 7.3 percent in the month of March.
- (0900 ET/1300 GMT) Mexico’s statistics agency will release its consumer confidence index for the month of March.
- (1000 ET/1400 GMT) The U.S. wholesale inventories as measured by the Commerce Department likely dropped 0.1 percent in February from the previous month. Sales at wholesalers are expected to remain unchanged after declining 1.7 percent in January.
- (1000 ET/1400 GMT) The National Institute of Economic and Social Research will release U.K's GDP estimate over the last 3 months.
- (1300 ET/ 1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events
- (0830 ET/1230 GMT) Federal Reserve Bank of New York President William Dudley speaks on the regional and national economy before students, faculty and community leaders at the University of Bridgeport, in Bridgeport, Connecticut.
- (0945 ET/1345 GMT) New York Fed purchases up to $1.85 bn 30-year Fannie Mae / Freddie Mac securities.
- N/A Canadian Finance Minister Bill Morneau will give a speech in Toronto about last month's budget, which announced deficits far larger than those the ruling Liberals promised during
- last year's election campaign.
FX Beat
USD: The dollar traded 0.7 percent higher against the yen at 109.00 yen, recovering from its first break below 108.00 since October 2014 the previous day and was set for a weekly fall of 2.3 percent. Against a basket of currencies, the dollar index trades flat at 94.557.
EUR/USD: The euro trades 0.1 percent lower at 1.1364, not far away from the peak of 1.1454 touched in the previous session. The pair has recovered after making a low of 1.1349 earlier in the session. The major resistance is around 1.1460 and any break above confirms minor trend reversal, a jump till 1.1500/1.1545 is possible. On the lower side major support is around 1.1320 and break below targets 1.1280/1.1250/1.1200. Major trend reversal is only below 1.1050.
USD/JPY: The Japanese yen edged lower against the U.S. dollar, after going as high as 107.68 in its previous session. The greenback trades 0.51 percent higher at 108.72, pulling away from a 17-month low stuck on Thursday. The short term trend is slightly bearish as long as resistance 110 holds. On the lower side any break below 107.60 will drag the pair down till 106.5/105. The major resistance is around 110 and break above targets 111.25/112.
GBP/USD: Sterling declined again below 1.4100 after downbeat industrial output and trade deficit figures, reversing earlier gains against both the dollar and the euro. Industrial output dropped 0.3 percent in February to post a 0.5 percent fall for the year, while the economy's trade deficit was at 12 billion pounds in February, well above a 10.2 billion consensus forecast. Sterling slipped to 1.4073 from 1.4140, however still up 0.1 percent on the day. The euro inched up to 80.84 pence, having traded at 80.56 beforehand. On the higher side minor
resistance is around 1.4150 and break above targets 1.4180/1.4250 level. Major weakness can be seen only below 1.4000 and break below will drag the pair down till 3920/1.3835 in short term. Overall bearish invalidation is only if it closes above 1.4400. The pound rose nearly 1 percent against the safe-haven yen to trade at 153.45 yen, recovering from a 2 1/2-year low of 151.70 yen struck in the previous session.
USD/CHF: The Swiss franc trades 0.20 percent lower at 0.9573 against its U.S. counterpart, having touched a high of 0.9521 in the previous session. The pair has once again retreated after making a slight recovery till 0.9582 level. Intraday bullishness can be seen only above 0.9630 level. Any indicative break above 0.9580 will take the pair till 0.9680/0.9755. On the
lower side break below 0.9530 will drag it down till 0.9480/0.9420/0.9390. Overall bearish invalidation can happen only above 0.9800.
AUD/USD: The Australian dollar was at 0.7539, having slipped 1.2 percent on Thursday and pulling away from a nine-month peak of $0.7723 touched last week. Aussie has recovered after making a low of 0.7490. The short term trend is slightly weak as long as resistance 0.7650 holds. On the higher side major resistance is around 0.7650 and break above targets
0.7680/0.7725. The minor resistance is around 0.7570. The minor support is around 0.7465 and break below will drag the pair till 0.7400/0.7380.
NZD/USD: The New Zealand dollar trades 0.19 higher at 0.6786, having touched a peak of 0.6864 the previous session. It has lost 1.7 percent this week. The kiwi touched a high of 0.6809, before declining to its current levels. Immediate resistance is located at 0.6830 (10-DMA), while support is seen at 0.6762 (Previous Session Low).
Equities Recap
European shares rebounded, however were still poised to end the week lower, amid growing U.S. economic and policy outlook. uncertainty.
Europe's FTSEurofirst 300 rose 0.3 pct, Britain's FTSE 100 and France's CAC 40 both were up 0.6 percent, while Germany's DAX gained 0.7 percent
Tokyo's Nikkei gained 0.46 pct at 15,821.52. MSCI's broadest index of Asia-Pacific shares outside Japan ended flat on the day, closing out the week down 1.2 percent.
Shanghai Composite index closed down 0.8 pct at 2,984.96 points, while CSI300 index ended down 0.7 pct at 3,185.73 points. HK’s Hang Seng index edged up 0.5 pct at 20,370.40 points.
Commodities Recap
Oil prices were lifted by fresh hopes over a proposed freeze in oil production and firm economic indicators from the United States and Germany that had a positive outlook on growth in fuel demand. Front-month U.S. West Texas Intermediate crude futures were trading $1.33 higher at $38.59 per barrel at 1106 GMT, more than 3 percent above their last close. International Brent futures were up at $40.57 a barrel.
Gold declined as strength in equities prompted investors to square off some of the previous day's gains, but remained on track for its biggest weekly rise as the Fed stayed cautious on U.S. rate hikes. Spot gold was down 0.4 percent at $1,235.24 an ounce at 1105 GMT, while U.S. gold futures for June delivery were flat at $1,237.50 an ounce.
Treasuries Recap
The 10-year U.S. Treasuries yield was up 3 basis points at 1.72 percent, having fallen to a 6-week low of 1.685 percent on Thursday.
Eurozone Bonds stabilised at the end of a volatile week, with German 10-year Bund yields approaching zero again. Spanish 10-year yields were down 4 basis points on the day, but still 13 bps higher on the week at 1.58 percent. At 1.36 percent, Italian yields were down 4 bps on Friday, but up 14 bps on the week. Portuguese yields were down 5 bps on the day but up 46 bps
since last week.
The 10-year Bund yields rose 1 basis point to 0.10 percent after stronger-than-forecast German data. But they remain within touching distance of last year's record low of 0.05 percent, which was followed by a sell-off that took them above 1 percent in a matter of weeks.
Japanese government bonds firmed, taking cue from strong U.S. Treasuries overnight and underpinned by the Bank of Japan's buying operations. The benchmark 10-year yield slipped 2.5 basis points to minus 0.085 percent. In the superlong zone, the 30-year JGB yield earlier rose to as high as 0.440 percent as investors locked in gains, but late in the session it was down half a basis point at 0.415 percent. June 10-year JGB futures ended up 0.27 point at 151.65.
Gilts opened 7 ticks lower than the settlement of 122.03 as core fixed income space reacted to a modest risk on bias noted from Japan overnight. Sellers gained some early impetus with a break of resistance on 10-year cash yields from recent lows at 1.343%.
Australian government bond futures rose, with the three-year bond contract up 4 ticks at 98.210. The 10-year contract rose 5 ticks to 97.6000, while the 20-year contract added 6 ticks to 97.0200. New Zealand government bonds gained, sending yields 2 basis points lower at the short end of the curve and 5 basis points lower at the long end of the curve.
