Market Roundup
- EUR/USD -0.39%, USD/JPY 0.28%, GBP/USD -0.19%, EUR/GBP -0.26%
- DXY 0.26%, DAX 0.06%, FTSE 0.47%, Brent 0.18%, Gold -0.36%
- Bank of England rate rises should be gradual, not glacial - Saunders
- Japan warns G20 protectionism will disrupt markets
- SNB's Jordan says no reason to change monetary policy
- U.S. Treasury weighs emergency powers to curb Chinese investments -official
- China March industrial power consumption down 1.4 pct on year
- EU's Barnier says still some 25 pct of work to do on Brexit
- Germany Mar Producer Prices YY, 1.9%, 2.0% forecast, 1.8% previous
- Germany Mar Producer Prices MM, 0.1%, 0.2% forecast, -0.1% previous
Economic Data Ahead
- (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales gained 0.3 percent in February after posting similar gains in January. While excluding autos, retail sales are likely to have risen 0.3 percent, after advancing 0.9 percent in the previous month.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that annual inflation rate rose 2.4 percent in March from 2.2 percent in February, keeping it closer to the Bank of Canada’s 2 percent target. While core consumer price index rose 0.2 percent in February.
- (1000 ET/1400 GMT) The European Commission releases Eurozone's preliminary Consumer Confidence reading for the month of April. The index posted a final reading of 0.2 in the prior month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (0940 ET/1340 GMT) Federal Reserve Bank of Chicago President Charles Evans speaks on current economic conditions and monetary policy before the Graaskamp Center Spring Board Conference - Chicago
- (1115 ET/1515 GMT) Federal Reserve Bank of San Francisco chief John Williams will speak at an event hosted by the University of California Berkeley Fischer Center for Real Estate and Urban Economics in Pebble Beach, California.
- (1245 ET/1645 GMT) G20 Finance Ministers hold a news conference following their talks on the sidelines of the spring meeting of the IMF and World Bank - Washington, D.C.
- N/A Bank of England Deputy Governor Ben Broadbent participates in G7 meetings (final day). - Washington, D.C.
- N/A Bank of England's Mark Carney participates in IMF meetings (to April 22). - Washington, D.C.
FX Beat
DXY: The dollar index rose to an 11-day high after Cleveland Fed President Loretta Mester said the central bank should continue hiking interest rates this year and next to keep the economy from overheating and financial stability risks from increasing. The greenback against a basket of currencies trades 0.3 percent up at 90.15, having touched a high of 90.20 earlier, its highest since Apr. 9. FxWirePro's Hourly Dollar Strength Index stood at 142.42 (Highly Bullish) by 1000 GMT.
EUR/USD: The euro slumped to an 11-day trough after German finance ministry stated that German economic growth could slow slightly in the first quarter. Moreover, weaker-than-expected German producer price index, which came in at 0.1 percent in March, missing expectation of 0.2 percent rise intensified the selling pressure around the major. The European currency traded 0.4 percent down at 1.2296, having touched a low of 1.2294 earlier, its lowest since Apr. 9. FxWirePro's Hourly Euro Strength Index stood at -18.81 (Slightly Bullish) by 1000 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 1.2281, a break below could drag it lower 1.2240.
USD/JPY: The dollar surged to a 1-week peak as easing global trade war concerns combined with ongoing peace talks on the Korean peninsula continues to dampen the demand for the safe-haven yen. Moreover, news that U.S. President Donald Trump made no new fresh demands on trade at his meeting with Japanese Prime Minister Shinzo Abe earlier this week, supported the upside in the pair. The major was trading 0.3 percent up at 107.68, having hit a high of 107.73 earlier, its highest since Apr. 13. FxWirePro's Hourly Yen Strength Index stood at 64.96 (Bullish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the Fed's Evan and William speech. Immediate resistance is located at 107.90 (Feb. 21 High), a break above targets 108.50. On the downside, support is seen at 106.77 (Apr. 6 Low), a break below could take it lower 106.26 (Mar. 29 Low).
GBP/USD: Sterling plunged to a 2-week low after Bank of England governor Mark Carney hinted that the central bank may not raise interest rates in May due to mixed economic data. This week's weaker than expected wage growth numbers and inflation data prompted Carney to signal that the rate hike was far from certain and that there were other BoE meetings later in the year. Sterling traded 0.1 percent down at 1.4065, having hit a low of 1.4035 earlier, it’s lowest since Apr. 6. FxWirePro's Hourly Sterling Strength Index stood at -48.00 (Neutral) by 1000 GMT. Immediate resistance is located at 1.4136 (21-DMA), a break above could take it near 1.4229 (5-DMA). On the downside, support is seen at 1.4021 (Apr. 3 Low), a break below targets 1.3965 (Apr. 5 Low). Against the euro, the pound was trading 0.2 percent up at 87.46 pence, having hit a low of 87.90 pence earlier, it’s lowest since Mar. 27.
USD/CHF: The Swiss franc tumbled to a 3-1/2 month low after the Swiss National bank stated that it has no intention to raise interest rates any time soon, while investors broadly expect Federal Reserve to hike rates three to four times in 2018. The major trades 0.3 percent up at 0.9740, having touched a high of 0.9743 earlier, it’s highest since Jan. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at 6.16 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9748 (Dec 29 High) and any break above will take the pair to next level till 0.9816 (Jan 11 High). The near-term support is around 0.9655 (5-DMA) and any close below that level will drag it till 0.9619 (10-DMA).
Equities Recap
European shares declined, weighed down by profit-taking among mining stocks, while sterling tumbled to a 2-week low after Bank of England governor Mark Carney slashed speculations of interest rate hike in May.
The pan-European STOXX 600 index traded 0.2 percent down at 381.39 points, while the FTSEurofirst 300 index advanced 0.05 percent to 1,566.72 points.
Britain's FTSE 100 trades 0.3 percent up at 7,352.76 points, while mid-cap FTSE 250 gained 0.4 percent to 20,217.66 points.
Germany's DAX fell 0.1 percent at 12,550.65 points; France's CAC 40 trades 0.05 percent higher at 5,393.53 points.
Commodities Recap
Crude oil prices steadied after rising to a near three-year high in the previous session, amid ongoing OPEC-led supply cuts and strong demand gradually reducing excess supplies. International benchmark Brent crude was trading 0.4 percent up at $73.83 per barrel by 0930 GMT, having hit a high of $74.71 on Thursday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.3 percent up at $68.33 a barrel, after rising as high as $69.53 the prior session, its highest since Nov. 2014.
Gold prices tumbled and were headed for the first weekly decline in three weeks as expectations of higher U.S. interest rates and easing political tensions on the Korean Peninsula and Syria weighed on demand for the safe-haven assets. Spot gold was down 0.4 percent at $1,339.89 an ounce at 0940 GMT, having hit a high of $1,355.54 an ounce on Wednesday, its highest since Apr. 11. U.S. gold futures fell 0.2 percent to $1,346.30 per ounce. Spot gold fell 0.2 percent on the week.
Treasuries Recap
The U.S. Treasuries remained silent on the end trading day of the week as investors wait to watch the Federal Open Market Committee’s (FOMC) members Evans and Williams deliver their speeches, later in the day, which shall add detailed insight into the bond market. The yield on the benchmark 10-year Treasuries remained flat at 2.91 percent, the super-long 30-year bond yields hovered around 3.10 percent and the yield on the short-term 2-year too remained steady at 2.43 percent.
The German bunds remained on the upside after the country’s producer price index (PPI) for the month of March missed market expectations and investors are now eyeing the eurozone’s consumer confidence index for the month of April, scheduled for later in the day for further direction in the debt market. The German 10-year bond yields, which move inversely to its price, slid nearly 1/2 basis point to 0.59 percent, the yield on 30-year note hovered around 1.16 percent while the yield on short-term 2-year slumped 2-1/2 basis points to -0.56 percent
The New Zealand government bonds slumped at the time of closing after the country’s consumer price inflation (CPI) for the first quarter of this year, topped market expectations, which added bearishness to the safe-haven debt market. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, jumped 2-1/2 basis points to 2.86 percent, the yield on the long-term 20-year note edged tad higher to 3.44 percent and the yield on short-term 2-year closed 1/2 basis point.
The Japanese government bonds edged lower as investors shifted to riskier assets including oil and equities. The yield on the benchmark 10-year JGBs, which moves inversely to its price, rose 1/2 basis point to 0.04 percent, the yield on the long-term 30-year note also edged slightly higher to 0.70 percent and the yield on short-term 2-year traded 1 basis point higher at -0.13 percent.
The Australian government bonds slumped on last trading day of the week following overnight losses in the U.S. Treasuries, UK Gilts and Germany bunds, where 10-year Note yield breached 2.90 percent. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 3 basis points to 2.882 percent, the yield on the long-term 30-year Note jumped 3 basis points to 3.388 percent and the yield on short-term 2-year also surged nearly 1 basis point to 2.133 percent.
