Market Roundup
- GBP/USD choppy in 1.4326-1.4395 range-data impact
- EUR/USD plays 1.1311-1.1383, USD/JPY 112.15-112.67
- DAX - 0.6%, Brent -0.1%, Gold +0.8%, DXY -0.2%
- Germany Feb R.Sales 5.4% y/y vs -1.2% rvsd previous, +2.2% exp
- Germany Mar Jobless 6.2% vs 6.2% previous, 6.2% exp
- UK Feb Consumer Credit GBP1.287bln vs 1.607bln prev, 1.4bln exp
- UK Feb Mtg Lending GBP3.648bln vs 3.743bln prev
- UK Q4 GDP +0.6% q/q vs +0.5% previous, +0.5% exp
- UK Q4 GDP +2.1% y/y vs 1.9% previous, 1.9% exp
- UK Q4 C/A –GBP32.66bln vs –20.11bln previous, -21.10bln exp
- EZ Mar flash Infl. -0.1% y/y vs -0.2% previous, -0.1% exp
- S&P revises China Sov Credit outlook to negative from stable
- UK Consumer Confidence Remains at 0 in March (Reuters Poll -1) – Gfk
- Concerns about Brexit and EZ Appear to hit UK Consumer Confidence – Gfk
- HK Unit of China's Guosen Securities Defaults on Dim Sum Yuan Bond - FT
- Guosen says there has been No "Breach" of Offshore Yuan Bond
- BOJ’s Kuroda: Will Continue QQE with Negative Rates as Long as Needed
- Kuroda: Govt has not declared defl. Escape-can't say No Risk of Return to defl
Economic Data Ahead
- (0730/1130) Brazil's central bank releases its latest growth and inflation forecasts for the next two years in its quarterly inflation report.
- (0830 ET/1230 GMT) The U.S. Labor Department is likely to report that new applications for unemployment benefits have stayed unchanged at 265,000, according to a Reuters survey, marking the 56th week below the 300,000 threshold associated with a healthy labor market. While continuing claims for the week ending Mar 18 likely increased to 2.205M from 2.179M.
- (0830 ET/1230 GMT) The Canada's economic growth is expected to have expanded by 0.3 percent in January, likely reinforcing expectations that first-quarter growth will exceed the Bank of Canada's 1 percent forecast.
- (0945 ET/1345 GMT) The Chicago Purchasing Managers' Index is likely to show factory activity edged up at 50.0 in March after declining to 47.6 in February.
- (1030 ET/1430 GMT) The Energy Information Administration reports its Natural Gas Storage for the week ending March 25.
- (1820 ET/2230 GMT) The Australian Industry Group releases its Manufacturing Index for the month of March. The index stood at 53.5 in the prior month.
- (1950 ET/2350 GMT) The Bank of Japan releases its Tankan large manufacturing Index for the first-quarter. The index is expected to decline to 8 after it stood at 12 in the previous quarter.
- (1950 ET/2350 GMT) The Bank of Japan is likely to report that the Tankan Large All Industry Capital Expenditure decreased to -0.7 percent in the first-quarter after rising to 10.8 percent in the prior quarter.
- (1950 ET/2350 GMT) The Bank of Japan's Tankan Non-Manufacturing Index is expected to slightly edge down at 24 in the first-quarter from 25 in the earlier quarter.
Key Events Ahead
- (0930 ET/1330 GMT) The Federal Reserve Bank of Chicago President Charles Evans participates in a discussion on current economic conditions and monetary policy before the Quinnipiac G.A.M.E. VI Forum.
- (1500 ET/1900 GMT) The Bank of England Governor Mark Carney's speech.
- (1700 ET/2100 GMT) The Federal Reserve Bank of New York President William Dudley speaks on "The Role of the Federal Reserve - Lessons from Financial Crises" before the Virginia Association of Economists' 43rd Annual Meeting.
FX Beat
USD: The dollar declined to its lowest level in 5-months against the euro in trade dominated by month-end rebalancing flows, putting the dollar index on track for its worst quarterly performance in 5- years.
EUR/USD: The euro trades 0.44 percent higher at 1.1385 levels, hovering towards sessions high 1.1390. The euro was boosted as annualised inflation picked up to -0.1 percent from -0.2 percent on the back of rising food and services prices offsetting decline in energy costs. The pair has broken major resistance 1.1380 and jumped till 1.1390. Intraday trend is slightly bullish as long as support 1.12800 holds. On the lower side any break below 1.1280 will drag the pair down till 1.1200/1.1155. The major resistance is around 1.1380 and any break above 1.1380 will take the pair to next level till 1.14350/1.1500 is possible.
USD/JPY: The Japanese yen continues to gain against its U.S. counterpart, trading around 112.26 yen and having touched a high of 112.24 yen. The dollar has recovered after making a low of 112.01. The short term trend is slightly bearish as long as resistance 113 holds. On the lower side major support is around 112 and break below targets 111/110.60. The major resistance is around 113 and break above targets 113.80/114.25.
GBP/USD: Sterling advanced after upbeat data showed Britain's economy grew at a faster pace last year than had previously been estimated, however against the euro and on a trade-weighted basis, the pound is heading for its worst quarter in 6-1/2 years. The British economy grew by 2.3 percent in the year 2015, higher than a previous estimate of 2.2 percent.
Sterling trades around 1.4414, having touched session's high 1.4426. The short term trend is weak as long as resistance 1.4460 holds. Any break above 1.4460 will take the pair to next level till 1.4520/1.4580. On the lower side major support is around 1.4320 and break below will drag the pair till 1.4250/1.4180. Against the euro, sterling pared losses to trade at 78.95 pence, still a touch down on the day.
USD/CHF: The Swiss franc trades 0.50 percent higher at 0.9600, hovering towards previous session high of 0.9592 against the greenback. The pair has broken major support 0.9680 and declined till 0.9592. The short term trend is slightly weak as long as resistance 0.9666 holds. Major support is around 0.9580 and any break below 0.9580 will drag the pair down till 0.9530/0.9475 in short term. On the higher side any trend reversal can happen only above 0.9800. The minor resistance is around 0.9660 and break above targets 0.9720/0.9750/0.9780 level.
AUD/USD: The Australian dollar trades at 0.7702, having climbed above 77 cents on Wednesday for the first time since June. It has advanced 7.1 percent so far this month and if sustained, it would be the largest such increase since late 2011. The Aussie has slightly retreated after making a high of 0.77088. The short term trend is slightly bullish as long as support 0.7630 holds. On the higher side major resistance is around 0.7710 and break above targets 0.7750/0.7800. The minor support is around 0.7630 and break below will drag the pair till 0.7570/0.7530.
NZD/USD: The New Zealand dollar trades 0.35 percent higher around 0.6941, nearing a 9-month peaks. Earlier in the session, the kiwi made a high of 0.6954, and continues to hover towards 0.6965 level. Immediate resistance is located at 0.6965 (Previous Session High), while support is located at 0.6819 (5-DMA).
Equities Recap
World stocks decline for the first time in four days as a volatile quarter drew to a close after weighing down the dollar and the pound but strengthening gold and bonds.
European markets opened with FTSEurofirst 300 down 1 pct, Germany's DAX was down 0.5 pct, France's CAC skidded 0.7 pct, UK's FTSE edged down 0.1 pct.
Shanghai Composite index and CSI300 index edged up 0.1 pct at 3,003.92 points and 3,218.09 points, respectively. HK’s Hang Seng index lost 0.1 pct at 20,776.70 points.
Tokyo's Nikkei skidded 0.71 pct at 16,758.67, while MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.4 percent overnight, at its highest since early December.
Commodities Recap
Oil futures slumped, with U.S. crude hitting its lowest price in more than 2-weeks as the country's crude stocks reached yet another record high, renewing concerns about global oversupply. Brent crude futures slightly edged up to $40.25 a barrel at 1114 GMT, while the front-month contract for U.S. crude futures was down 65 cents at $37.67 a barrel, after dropping to $37.57, the lowest since March 16.
Gold gained as a decline in equities strengthened its appeal as an alternative asset, heading for its biggest quarterly gain in nearly 30 years. Spot gold was up 0.9 percent at $1,236.11 an ounce at 1114 GMT, while U.S. gold futures for April delivery were up $8 an ounce at $1,236.60.
Treasuries Recap
The 10-year U.S. treasuries yield stood at 1.818 percent versus previous close of 1.830 percent.
German 10-year yields have shed nearly 50 basis points this quarter, standing at 0.15 percent and within touching distance of record lows of 0.05 percent set last year. Bunds were
lower, having been held by 163.68 interim highs ahead of 163.84 from yesterday.
Japanese government bond prices slumped as investors booked profits. The benchmark 10-year JGB yield rose 5 basis points to a 2-week high of minus 0.045 percent after notching a record low of minus 0.135 percent on March 18. In the superlong zone, the 20-year JGB yield rose 4 basis points to 0.445 percent and the 30-year gained 2.5 basis points to 0.525 percent. June 10-year JGB futures slipped 0.53 point to end at 151.30.
June Gilts opened strongly at 121.19, up 33 ticks from the previous settlement of 120.86 and are trading around 121.31. The 10-yr Gilt yields are down 5bp to 1.40% from the previous settlement level whereas 10-yr bond yields were down around 1.75bp.
Australian government bond futures rose, with the 3-year bond contract up 2 ticks at 98.120. The 10-year contract added 1 tick to 97.5150, while the 20-year contract edged up 1.5 tick to 96.9450. New Zealand government bonds gained, sending yields half a basis point lower at the short end of the curve.
