Market Roundup
- EUR/USD -0.05%, USD/JPY 0.16%, GBP/USD -0.08%, EUR/GBP 0.02%
- DXY 0.06%, DAX -0.03%, FTSE 0.29%, Brent 0.64%, Gold -0.14%
- Currency trading volumes hit record highs in first quarter
- Japan contemplates post-Abe world, but rivals' positions still murky
- Trump, Japan's Abe agree to intensify trade talks
- China says ready to deal with any fallout from U.S. trade row
- Moody's says Russian economy resilient to latest U.S. sanctions
- BOJ warns of risk from lax bank loans to "middle risk companies"
- EZ Feb Current Account SA, EUR, 35.1 bln, 37.6 bln previous, 39.0 bln revised
- EZ Feb Current Account NSA, EUR, 22.7 bln, 12.8 bln previous, 12.6 bln revised
- Great Britain Mar Retail Sales YY, 1.1%, 2.0% forecast, 1.5% previous
- Great Britain Mar Retail Sales Ex-Fuel YY, 1.1%, 1.4% forecast, 1.1% previous, 1.2% revised
- Great Britain Mar Retail Sales MM, -1.2%, -0.5% forecast, 0.8% previous
Economic Data Ahead
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 3,000 to a seasonally adjusted 230,000 for the week ended Apr. 13, while continuing claims for the week ended Apr. 6 is expected to decline to 1.848 million from the previous reading of 1.871 million.
- (0830 ET/1230 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity decreased to 20.1 in April from 22.3 in March.
- (0830 ET/1230 GMT) Payrolls processor ADP releases Canada's employment report for the month of March. The report is expected to show that 32,700 jobs were added in February.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending April 13.
Key Events Ahead
- (0800 ET/1200 GMT) Federal Reserve Board Governor Lael Brainard speaks on "Regulatory Reform" before the 2018 Global Finance Forum-Washington, D.C.
- (0845 ET/1245 GMT) IMF Managing Director Christine Lagarde holds a news conference ahead of the spring meeting of the IMF and World Bank-Washington,D.C.
- (0915 ET/1315 GMT) Bank of England Executive Director, Banking, Payments and Financial Resilience speaks-London
- (0930 ET/1330 GMT) Federal Reserve Vice Chair for Supervision Randal Quarles testifies before a Senate Banking Committee hearing, "The Semiannual Testimony of the Federal Reserve's Supervision and Regulation of the Financial System," in Washington, D.C.
- (1200 ET/1600 GMT) Governor of Norges Bank Oystein Olsen speaks for the financial markets association-Oslo
- (1230 ET/1630 GMT) Bank of England Deputy Governor for Financial Stability Jon Cunliffe speaks in Washington, D.C.
- (1230 ET/1630 GMT) Eurogroup head Mario Centeno speaks on "Completing the European Project"-Washington, D.C.
- (1700 ET/2100 GMT) UK Finance Minister Philip Hammond and South African President Cyril Ramaphosa speak at a dinner hosted by the City of London Corporation-London
- (1845 ET/2245 GMT) Federal Reserve Bank of Cleveland President Loretta Mester speaks -Pittsburgh, Pennsylvania
FX Beat
DXY: The dollar index surged as the 10-year Treasury note yield climbed more than 5 basis points overnight for its biggest one-day surge since March 2. The greenback against a basket of currencies trades 0.1 percent up at 89.65, having touched a low of 89.23 on Tuesday, its lowest since Mar. 27. FxWirePro's Hourly Dollar Strength Index stood at 13.07 (Neutral) by 1000 GMT.
EUR/USD: The euro eased ahead of Germany and France leaders meeting that could help in working out a common position on reforming the eurozone. Moreover, weaker-than-expected Eurozone inflation figures continued to weigh on the major. The European currency traded 0.05 percent down at 1.2370, having touched a high of 1.2413 on Tuesday, its highest since Mar. 28. FxWirePro's Hourly Euro Strength Index stood at 98.47 (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 1.2355 (5-DMA), a break below could drag it lower 1.2331 (21-DMA).
USD/JPY: The dollar rose, extending previous session gains after U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe said they had agreed to intensify trade consultations between the two allies. However, broad uncertainty stemming from U.S. President Donald Trump's trade and economic policies, as well as geopolitical in the Middle East underpinned the bid tone around the Japanese yen. The major was trading 0.2 percent up at 107.41, having hit a high of 107.77 on Friday, its highest since Feb. 21. FxWirePro's Hourly Yen Strength Index stood at -50.98 (Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, Fed's Brainard, Mester, and Quarles 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 slumped to a 1-week low as British shoppers stayed home in March, leading to the biggest quarterly fall in retail sales in a year and weighing on first-quarter economic growth. The economy's retail sales volumes dropped by 1.2 percent compared with the month before due to unusually cold and snowy weather. The major traded 0.1 percent up at 1.4218, having hit a low of 1.4161 earlier, it’s lowest since Apr. 12. FxWirePro's Hourly Sterling Strength Index stood at -30.01 (Neutral) by 1000 GMT. Immediate resistance is located at 1.4257 (5-DMA), a break above could take it near 1.4380. On the downside, support is seen at 1.4161 (Session Low), a break below targets 1.4138 (21-DMA). Against the euro, the pound was trading 0.2 percent down at 86.96 pence, having hit a low of 87.36 pence, it’s lowest since Apr. 11.
USD/CHF: The Swiss franc edged up after falling to a 3-1/2 month low earlier in the day as a rally in commodity prices, including large moves in oil and iron ore boosted investor risk sentiment. The major trades 0.05 percent down at 0.9680, having touched a high of 0.9710 earlier, it’s highest since Jan. 12. FxWirePro's Hourly Swiss Franc Strength Index stood at -102.30 (Slightly Bearish) 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 0.9637 (5-DMA) and any close below that level will drag it till 0.9566 (10-DMA).
Equities Recap
European shares advanced, boosted by gains in advertising group Publicis and industrial stocks, while the greenback against a basket of currencies rose on rising U.S. Treasury yields.
The pan-European STOXX 600 index traded 0.2 percent up at 382.03 points, while the FTSEurofirst 300 index advanced 0.1 percent to 1,497.50 points.
Britain's FTSE 100 trades 0.2 percent up at 7,328.66 points, while mid-cap FTSE 250 gained 0.5 percent to 20,102.35 points.
Germany's DAX fell 0.1 percent at 12,580.32 points; France's CAC 40 trades 0.2 percent higher at 5,390.42 points.
Commodities Recap
Crude oil prices rallied to their highest since late 2014 as U.S. crude inventories declined and as Saudi Arabia seeks to push oil prices higher. International benchmark Brent crude was trading 0.2 percent up at $73.94 per barrel by 1016 GMT, having hit a high of $74.41 earlier, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.1 percent up at $68.83 a barrel, after rising as high as $69.24 earlier, its highest since Nov. 2014.
Gold prices declined after rising for four straight sessions, despite lingering U.S.-China trade tensions lending further support to the safe-haven assets. Spot gold was trading 0.2 percent down at $1,347.17 per ounce by 1028 GMT, having hit a high of $1,365.16 an ounce last week, its highest since Jan. 25, while U.S. gold futures rose 0.2 percent to $1,356.30 per ounce.
Treasuries Recap
The U.S. Treasuries suffered as investors wait to watch the country’s initial jobless claims, scheduled to be released today by 12:30GMT. Also, the Federal Open Market Committee’s (FOMC) members Brainard, Quarles and Mester are scheduled to deliver their speeches, later in the day, which shall add detailed insight into the bond market. The yield on the benchmark 10-year Treasuries climbed nearly 3 basis points to 2.89 percent, the super-long 30-year bond yields jumped 4-1/2 basis points to 3.09 percent and the yield on the short-term 2-year traded nearly flat at 2.42 percent.
The UK gilts plunged during European session despite a worse-than-expected reading of the country’s retail sales data for the month of March released today. Market participants shall now be focussing on a host Bank of England (BoE) members’ speech, due today and tomorrow for further direction in the debt market. The yield on the benchmark 10-year gilts, jumped 5 basis points to 1.46 percent, the super-long 30-year bond yields surged 4-1/2 basis points to 1.86 percent and the yield on the short-term 2-year traded nearly 2-1/2 basis points higher at 0.87 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 up at 1.96 percent.
The Japanese government bonds edged lower as investors shifted to riskier assets including oil and equities. Investors are now awaiting Japan’s national consumer price inflation (CPI) data for the same period, due today by 23:30GMT. 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 despite March employment report disappointed investors, but it follows the weakness in the U.S. Treasuries. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 2-1/2 basis points to 2.771 percent, the yield on the long-term 30-year Note jumped 2-1/2 basis points to 3.344 percent and the yield on short-term 2-year also surged nearly 1/2 basis point to 2.121 percent.
