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Europe Roundup: Sterling steadies after EU extends Brexit deadline, greenback gains amid developments in U.S.-China trade talks, European shares surge - Thursday, April 11th, 2019

Market Roundup

  • EUR/USD 0.01%, USD/JPY 0.1%, GBP/USD -0.03%, EUR/GBP 0.01%
     
  • DXY -0.01%, DAX 0.14%, FTSE 0.07%, Brent -0.71%, Gold -0.3%
     
  • EU gives May till October for Brexit, seeking clarity
     
  • UK govt will listen to Labour's Brexit suggestions, including on second referendum -Cox
     
  • Germany Mar CPI Final MM, 0.4%, 0.4% f'cast, 0.4% prev
     
  • Germany Mar CPI Final YY, 1.3%, 1.3% f'cast, 1.3% prev
     
  • Germany Mar HICP Final MM, 0.5%, 0.5% f'cast, 0.5% prev
     
  • Germany Mar HICP Final YY, 1.4%, 1.4% f'cast, 1.4% prev
     
  • Great Britain Mar RICS Housing Survey, -24, -30 f'cast, -27 prev
     
  • France Mar CPI (EU Norm) Final MM, 0.9%, 0.9% f’cast, 0.9% prev
     
  • France Mar CPI (EU Norm) Final YY, 1.3%, 1.3% f’cast, 1.3% prev
     
  • U.S., China agree to establish trade deal enforcement offices -Mnuchin
     

Economic Data Ahead

  • (0830 ET/1230 GMT) The U.S. producer price index is likely to rise 0.3 percent in March, compared with a gain of 0.1 percent in February, while in the 12 months through March, it is expected to have advanced 1.9 percent. PPI excluding food and energy probably rose 0.2 percent after rising 0.1 percent in the prior month.
     
  • (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 9,000 to a seasonally adjusted 211,000 for the week ended Apr.5, while continuing claims for the week ended Mar. 29 is expected to rise to 1.738 million from a previous reading of 1.717 million.
     
  • (0830 ET/1230 GMT) Statistics Canada releases its New Housing Price Index (NHPI) for the month of February. The index declined 0.1 percent in January.
     
  • (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending April 5.
     

Key Events Ahead

  • N/A ECB's Draghi and Benoit Coeure in the IMF/World Bank spring meetings in Washington, D.C.
     
  • N/A BoE's Broadbent and Deputy Governor for Prudential Regulation Sam Woods participate in IMF Spring Meetings, Washington
     
  • (0830 ET/1230 GMT) ECB's Villeroy de Galhau speaks at Washington
     
  • (0845 ET/1245 GMT) World Bank Interim President Kristalina Georgieva holds a press briefing ahead of IMF-World Bank Spring Meetings
     
  • (0930 ET/1330 GMT) Federal Reserve Vice Chairman Richard Clarida speaks before the Institute of International Finance Washington Policy Summit, Washington
     
  • (0940 ET/1340 GMT) Federal Reserve Bank of St. Louis President James Bullard gives presentation before the "Breakfast With the Fed" hosted by the Community Development Foundation of Tupelo, Mississippi.
     
  • (0945 ET/1345 GMT) Federal Reserve Bank of New York President John Williams speaks before the Association for Neighborhood & Housing Development 2019 Annual Conference
     
  • (1300 ET/1700 GMT) Bank of Canada Senior Deputy Governor Carolyn Wilkins participates in a panel discussion at the World Bank
     
  • (1300 ET/1700 GMT) German Economy Minister Peter Altmaier speaks at an event in Berlin organized by Germany's Focus weekly magazine
     
  • (1400 ET/1800 GMT) Federal Reserve Bank of Minneapolis President Neel Kashkari holds a Q&A via Twitter
     
  • (1600 ET/2000 GMT) Federal Reserve Board Governor Michelle Bowman speaks on "Community Banking in the Age of Innovation" before a Fed Family Luncheon hosted by the Federal Reserve Bank of San Francisco
     

FX Beat

DXY: The dollar index bounced back from a near 2-week low touched in the prior session as investors awaited the U.S. producer price inflation (CPI) data for the month of March, and speeches by FOMC members Clarida, Williams, Bullard, Quarles, Kashkari and Bowman due later in the day. The greenback against a basket of currencies traded 0.05 percent up at 96.95, having touched a low of 96.85 on Wednesday, its lowest since Mar. 28. FxWirePro's Hourly Dollar Strength Index stood at -55.34 (Bearish) by 1000 GMT.

EUR/USD: The euro rallied after data showed German consumer prices rose by 0.4 percent in March from the previous month and were up by 1.3 percent from the previous year. The European currency traded 0.1 percent up at 1.1280, having touched a high of 1.1287 on Wednesday, its highest since Mar. 26. FxWirePro's Hourly Euro Strength Index stood at 67.84 (Bullish) by 1000 GMT. Immediate resistance is located at 1.1331 (Mar. 25 High), a break above targets 1.1361 (Mar. 19 High). On the downside, support is seen at 1.1213 (Mar. 28 Low), a break below could drag it till 1.1176 (Mar. 7 Low).

USD/JPY: The dollar rebounded from a 9-day low recorded in the previous session, after U.S. Treasury Secretary Steven Mnuchin stated that the United States and China have largely agreed on a mechanism to guard any trade agreement they reach, including establishing new enforcement offices. The major was trading 0.1 percent up at 111.11, having hit a low of 110.84 on Wednesday, its lowest since Apr. 1. FxWirePro's Hourly Yen Strength Index stood at -16.31 (Neutral) by 1000 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. producer price index, unemployment benefit claims and Fed officials' speech. Immediate resistance is located at 111.44 (Apr. 1 High), a break above targets 111.92 (Mar. 6 High). On the downside, support is seen at 110.53 (Mar. 20 Low), a break below could take it lower at 110.01 (Mar. 28 Low).

GBP/USD: Sterling rose, extending previous session gains, after European Union leaders extended the deadline for Britain to leave the European Union until October, easing fears that Britain will crash out of the bloc on Friday without a deal. The major traded 0.1 percent up at 1.3092, having hit a low of 1.2986 on Friday; it’s lowest since Mar. 29. FxWirePro's Hourly Sterling Strength Index stood at 80.53 (Slightly Bullish) 1000 GMT. Immediate resistance is located at 1.3121 (Apr. 5 High), a break above could take it near 1.3149 (Apr. 1 High). On the downside, support is seen at 1.3030 (Apr. 9 Low), a break below targets 1.3003 (Mar. 21 Low). Against the euro, the pound was trading 0.1 percent down at 86.15 pence, having hit a low of 86.51 on Tuesday, it’s lowest since Mar. 22.

USD/CHF: The Swiss franc edged higher, retreating from a near 4-week low hit in the prior session, as investors weighed warning signs over growth from major central banks. The major trades 0.05 percent down at 1.0020, having touched a high of 1.0033 on Wednesday; it’s highest since Mar. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at -156.36 (Highly Bearish) by 1000 GMT. On the higher side, near-term resistance is around 1.0052 (Mar. 15 High) and any break above will take the pair to next level till 1.0084 (Mar. 13 High). The near-term support is around 0.9967 (Apr. 3 Low), and any close below that level will drag it till 0.9937 (Mar. 28 Low)

Equities Recap

European shares surged, as strong earnings boosted gains in France, while sterling steadied as EU gave British PM May new Brexit deadline till October.

The pan-European STOXX 600 index gained 0.1 percent at 386.95 points, while the FTSEurofirst 300 index rallied 0.1 percent to 1,522.56 points.

Britain's FTSE 100 trades 0.05 percent up at 7,425.50 points, while mid-cap FTSE 250 gained 0.5 to 19,573.42 points.

Germany's DAX rose 0.2 percent at 11,928.92 points; France's CAC 40 trades 0.6 percent higher at 5,482.60 points.

Commodities Recap

Crude oil prices declined, weighed down by rising U.S. crude stocks, however, the downside was limited as OPEC-led cuts and freefalling Venezuelan output tightened global supplies. International benchmark Brent crude was trading 0.5 percent down at $71.21 per barrel by 1040 GMT, having hit a high of $71.76 on Wednesday, its highest since Nov. 8. U.S. West Texas Intermediate was trading 0.7 percent down at $63.97 a barrel, after rising as high as $64.77 on Tuesday, its highest since the Nov. 1.

Gold prices edged lower after rising to a 2-week peak scaled in the previous session as dovish U.S. and European central banks fanned concerns on economic slowdown. Spot gold was 0.3 percent down at $1,304.62 per ounce by 1033 GMT, having touched a high of $1,310.47 on Thursday, its highest since March 28. U.S. gold futures were down about 0.4 percent at $1,309.30 an ounce.

Treasuries Recap

The U.S. Treasuries remained flat during the afternoon session ahead of the country’s producer price inflation (CPI) data for the month of March, scheduled to be released today by 12:30GMT. The yield on the benchmark 10-year Treasury yield remained flat at 2.476 percent, the super-long 30-year bond yields hovered around 2.902 percent and the yield on the short-term 2-year too remained steady at 2.332 percent.

The United Kingdom’s gilts lost ground during European session after European Union leaders agreed to delay Brexit beyond tomorrow’s cliff-edge and investors shifted towards riskier assets post this decision. The yield on the benchmark 10-year gilts, jumped nearly 2 basis points to 1.115 percent, the super-long 30-year bond yields rose 1 basis point to 1.639 percent and the yield on the short-term 2-year traded 2 basis points higher at 0.714 percent.

The German bunds slid during European trading session after the country’s consumer price inflation (CPI) for the month of March met market expectations, also unchanged from the previous reading. The German 10-year bond yields, which move inversely to its price, traded nearly 1 basis point higher at -0.026 percent, the yield on 30-year note also remained tad higher at 0.621 percent and the yield on short-term 2-year hovered around -0.590 percent.

The Australian government bond yields suffered during Asian session tracking a similar slowdown in the United States counterpart following concerns over economic growth as hinted by the European Central Bank in its monetary policy statement yesterday. The yield on Australia’s benchmark 10-year note, which moves inversely to its price, slumped nearly 2 basis points to 1.861 percent, the yield on the long-term 30-year bond slipped 1 basis point to 2.490 percent and the yield on short-term 2-year traded nearly flat at 1.489 percent.

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2019-05-27 02:34:53
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May 27 01:30 UTC Released

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