Market Roundup
- EUR/USD -0.16%, USD/JPY 0.01%, GBP/USD -0.82%, EUR/GBP 0.69%
- DXY 0.26%, DAX 0.61%, FTSE 0.58%, Brent -0.40%, Gold 0.05%
- Sterling tumbles to two-month low after GDP data
- BOJ removes timeframe for price goal, keeps policy steady
- China's March industrial profit growth slows sharply to over 1-year low
- France ready to review WTO rules if U.S. agree on tariff waiver
- Great Britain Q1 GDP Preliminary QQ, 0.1%, 0.3% forecast, 0.4% previous
- Great Britain Q1 GDP Preliminary YY, 1.2%, 1.4% forecast, 1.4% previous
- Great Britain Apr Nationwide House Price YY, 2.6%, 2.6% forecast, 2.1% previous
- EZ Apr Consumer Confidence Final, 0.4, -0.1 forecast, 0.4 previous
- EZ Apr Business Climate, 1.35, 1.27 forecast, 1.34 previous, 1.44 revised
- EZ Apr Economic Sentiment, 112.7, 112 forecast, 112.6 previous, 112.7 revised
- EZ Apr Industrial Sentiment, 7.1, 5.8 forecast, 6.4 previous, 7.0 revised
- EZ Apr Services Sentiment, 14.9, 15.8 forecast, 16.3 previous, 15.9 revised
- Germany Apr Unemployment Rate SA, 5.3%, 5.3% forecast, 5.3% previous
- Great Britain Mar Import Prices YY, -0.1%, 0.0%, -0.6%
- France Q1 GDP Preliminary QQ, 0.3%, 0.4% forecast, 0.7% previous
- France Apr CPI (EU Norm) Prelim YY, 1.8%, 1.7% forecast, 1.7% previous
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that preliminary gross domestic product increased at a 2.0 percent annual rate in the first quarter after surging at a 2.9 percent pace in the previous quarter.
- (0830 ET/1230 GMT) The U.S. Labor Department will release its employment cost index for the first quarter. The index is expected to rise 0.7 percent, after posting a 0.6 percent gain in the fourth quarter.
- (0830 ET/1230 GMT) The U.S. Commerce Department releases the preliminary personal consumption expenditures (PCE) price index for the first quarter. The index is expected to ease to 2.6 percent from 2.7 percent in the previousious quarter, while core PCE is likley to increase 2.4 percent after gaining 1.9 percent in the third quarter.
- (1000 ET/1400 GMT) The University of Michigan is likely to report that U.S. consumer sentiment index rose to 98.0 in April, after posting a final reading of 97.8 in February.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (1000 ET/1400 GMT) Bank of Engand's Mark Carney speaks at the launch of the EconoME programme - London
- (1015 ET/1415 GMT) Bank of England MPC Member Andrew G Haldane's Speech
FX Beat
DXY: The dollar rallied and was on track to post its best weekly performance in more than 1-1/2 years as a spike in U.S. Treasury yields prompted some investors to unwind some short bets. The greenback against a basket of currencies trades 0.4 percent up at 91.90, having touched a high of 91.93, its highest since Jan. 11. FxWirePro's Hourly Dollar Strength Index stood at 116.68 (Highly Bullish) by 1100 GMT.
EUR/USD: The euro slumped to a fresh 3-1/2 month low after data showed German jobless total dropped less than expected in April and the unemployment rate remained at a record low. However, upbeat economic sentiment in the euro zone, which came in at 112.7 in April limited the downside in the major. The European currency traded 0.2 percent down at 1.2103, having touched a low of 1.2064, its lowest since Jan. 12. FxWirePro's Hourly Euro Strength Index stood at 3.97 (Neutral) by 1100 GMT. Immediate resistance is located at 1.2165, a break above targets 1.2219. On the downside, support is seen at 1.2060, a break below could drag it till 1.2025.
USD/JPY: The dollar steadied against the Japanese yen after Bank of Japan kept policy unchanged but removed a timeframe it had set for hitting its inflation target, Moreover, BoJ Governor Haruhiko Kuroda warned of downside risks clouding the price outlook. The major was trading 0.05 percent up at 109.33, having hit a high of 109.49 earlier, its highest since Feb. 8. FxWirePro's Hourly Yen Strength Index stood at 39.54 (Neutral) by 1100 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. preliminary gross domestic product and personal consumption expenditure prices. Immediate resistance is located at 109.75 (Feb. 1 High), a break above targets 110.28 (Feb. 2 High). On the downside, support is seen at 108.76 (5-DMA), a break below could take it lower 107.98 (10- DMA).
GBP/USD; Sterling tumbled to a near 2-month low after Britain's economy grew at its weakest pace since the fourth quarter of 2012, slashing investors expectations of a Bank of England interest rate hike in May. Britain's economy slowed much more sharply than expected in the first three months of 2018, expanding by just 0.1 percent in the first quarter, well below the BoE's estimate of 0.3 percent. The major traded 1.01 percent down at 1.3772, having hit a low of 1.3755 earlier, it’s lowest since Mar. 1. FxWirePro's Hourly Sterling Strength Index stood at -179.97 (Highly Bearish) by 1100 GMT. Immediate resistance is located at 1.3876, a break above could take it near 1.3929. On the downside, support is seen at 1.3711 (Mar. 13 Low), a break below targets 1.3680. Against the euro, the pound was trading 0.9 percent down at 87.72 pence, having hit a low of 87.85 pence earlier, it’s lowest since Apr. 20.
USD/CHF: The Swiss franc plunged to a 4-month low as the greenback rallied following a spike in the 10-year U.S. Treasury yields above the 3 percent mark. The major trades 0.2 percent up at 0.9912, having touched a high of 0.9920 earlier, it’s highest since Dec. 26. FxWirePro's Hourly Swiss Franc Strength Index stood at -104.59 (Highly Bearish) by 1100 GMT. On the higher side, near-term resistance is around 0.9934 (Dec. 15 High) and any break above will take the pair to next level till 0.9977 (Dec. 8 High). The near-term support is around 0.9808 (5-DMA) and any close below that level will drag it till 0.9731 (10-DMA).
Equities Recap
European shares rose, boosted by upbeat results from Spanish banks and a recovery among tech stocks, while the greenback rallied and was on track to post its best weekly performance since late November 2016.
The pan-European STOXX 600 index surged 0.05 percent at 383.88 points, while the FTSEurofirst 300 index rallied 0.05 percent to 1,505.87 points.
Britain's FTSE 100 trades 0.7 percent up at 7,473.54 points, while mid-cap FTSE 250 gained 0.5 percent to 20,244.48 points.
Germany's DAX rose 0.7 percent at 12,593.49 points; France's CAC 40 trades 0.2 percent higher at 5,464.45 points.
Commodities Recap
Crude oil prices declined, but were on course for its third week of gains amid concerns that the United States may reimpose sanctions on Iran. International benchmark Brent crude was trading 0.3 percent down at $74.52 per barrel by 1047 GMT, having hit a high of $75.44 on Tuesday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.2 percent down at $68.00 a barrel, after rising as high as $69.53 last week, its highest since Nov. 2014.
Gold prices hovered near a 5-week low and were set for a fall of more than 1 percent this week, weighed down by a strong dollar, high U.S. Treasury yields and easing geo-political concerns. Spot gold was steady at $1,319.25 per ounce at 1053 GMT, having hit a low of $1,315.18 an ounce on Thursday, its lowest since March 21. U.S. gold futures were down 0.1 percent at $1,317.20 per ounce.
Treasuries Recap
The U.S Treasuries jumped Friday on expectations of a fall in the country’s gross domestic product (GDP) for the first quarter of this year, scheduled to be released today by 12:30GMT amid an otherwise, silent trading session. The yield on the benchmark 10-year Treasuries slumped 2 basis points to 2.97 percent, the super-long 30-year bond yields also plunged 2 basis points to 3.15 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 2.48 percent.
The UK gilts jumped during European session Friday after the country’s gross domestic product (GDP) for the first quarter of this year disappointed market expectations, leading to higher demand for safe-haven assets. Now, market participants shall now be focussing on the Bank of England’s (BoE) Governor Mark Carney’s speech, due today by 14:00GMT further direction in the debt market. The yield on the benchmark 10-year gilts, slumped 6 basis points to 1.44 percent, the super-long 30-year bond yields plunged 4-1/2 basis points to 1.84 percent and the yield on the short-term 2-year traded nearly 8 basis points lower at 0.81 percent.
The New Zealand government bonds ended the last trading day of the week Friday on a higher note, following influx of risk averse sentiments after the country’s trade balance data for the month of March disappointed market sentiments , in addition to strength in the United States counterpart. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, slumped 5 basis points to 2.90 percent, the yield on the long-term 20-year note also plunged 5 basis points to 3.47 percent and the yield on short-term 2-year closed 2-1/2 basis points lower at 1.92 percent
The Japanese government bonds climbed during late Asian session Friday after the Bank of Japan (BoJ) dropped the expected time-frame for reaching the 2 percent inflation target in its quarterly outlook report released early today. Also, the central bank remained on hold at today’s monetary policy meeting, keeping the short-term interest rate target unchanged at -0.10 percent and 10-year yield target at around zero percent. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, slipped nearly 1 basis point to 0.05 percent, the yield on the long-term 30-year note fell nearly 1-1/2 basis points to 0.74 percent and the yield on short-term 2-year traded tad lower at -0.13 percent
The Australian government bonds gained on Friday as a fresh wave of buying pressured the U.S. 10-year Treasury note rate to under 3 percent mark. Markets will now eye the Reserve Bank of Australia (RBA) monetary policy decision of next week, where it is widely expected do nothing. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell 4-1/2 basis points to 2.836 percent, the yield on the long-term 30-year Note also dipped 5 basis points to 3.390 percent and the yield on short-term 2-year down 2 basis points to 2.107 percent
