Market Roundup
- EUR/USD +0.1%, USD/JPY -0.3%, GBP/USD +0.5%, AUD/USD +0.3%
- DAX +0.05%, Brent +0.80%, Gold +0.01%, DXY -0.2%
- Germany Soc-Dem Parl deputy group leader wants urgent talks with Draghi
- Spain’s socialists ready to explore last min govt coalition with other leftists
- Turkey Cb gov-Monetary policy to be tied to infl. outlook in future
- Brexit debate is too black and white –Former BoE Gov King- Globe & Mail
- Japan GPIF Pres Takahashi – Will embrace currency hedging – Nikkei
- GPIF won't change its basic asset allocation
- Reuter’s poll, news – RBNZ to keep OCR unchanged Thursday, cut by June
- Dalian iron ore comes off 20-month high as exchange imposes curbs
- Work resumes at many quake-hit areas in Kyushu, Japan – Nikkei
- Japan firms delay fiscal ’16 forecasts to factor in quakes – Nikkei
- Time ticking for choice on Australia central bank chief
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. Census Bureau is likely to report that durable goods orders rose 1.8 percent last month after slumping 3.0 percent in February. Non-defense capital goods orders excluding aircraft are expected to rise 0.8 percent after declining 2.5 percent in February.
- (0900 ET/1300 GMT) S&P/Case Shiller's house price index is expected to rise 5.5 percent in the 12 months through February, after increasing 5.7 percent in January.
- (0900 ET/1300 GMT) Mexico releases its trade balance figures for the month of March.
- (0945 ET/1345 GMT) Markit Economics will release preliminary Service PMI for the month of April. The index is likely to edge up 52.3 from 51.3 in March.
- (1000 ET/1400 GMT) The U.S. Conference Board is likely to report that its consumer confidence index was little changed at 96.0 in April from 96.2 in the prior month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stock.
- (1845 ET/2245 GMT) The Statistics New Zealand releases its trade balance data for the month of March. The economy posted a trade deficit of $3.32 billion in January.
Key Events
- N/A Canadian Prime Minister Justin Trudeau will hold a three-day cabinet retreat in the western energy-producing province of Alberta.
- (0840 ET/1240 GMT) Bank of Canada Governor Stephen Poloz gives a speech to the Investment Industry Association of Canada and Securities Industry and Financial Markets Association in New York.
- (1145 ET/1545 GMT) FedTrade Ops 30-yr F.Mae/Fr. Mac max $2.100 bln
- (1300 ET/1700 GMT) Bank of England Deputy Governor Sir Jon Cunliffe Speech.
- (1300 ET/1700 GMT) FOMC begins two-day meeting
- (1430 ET/1830 GMT) FedTrade Ops 30-yr Ginnie Mae max $1.125 bln
FX Beat
USD: The dollar lost ground against the euro and yen as investors remain cautious ahead of FOMC and BoJ policy meeting. Against a basket of currencies, the dollar index trades 0.1 percent lower at 94.66.
EUR/USD: The euro trades 0.1 percent higher at 1.1286, having touched session's high of 1.1299. The short term trend is slightly bearish as long as resistance 1.1320 holds. On the higher side major intraday resistance is around 1.13200 and break above targets 1.1380/1.1400. The pair should close above 1.1400 for further bullishness. The support is at 1.1200 and any violation below that level targets 1.11500/1.10500 level.
USD/JPY: The Japanese yen trades 0.1 percent higher at 110.99, moving away from lows of several weeks against the dollar and euro as prospects of further monetary stimulus from the Bank of Japan remained uncertain. The yen rose to a high of 110.67, retreating from a 3-week low of 111.90 hit the previous day. The short term trend is slightly bullish as long as support 110 holds. On the lower side any break below 110 will drag the pair down till 109.50/109. The major resistance is around 112.35 (55 day EMA) and break above targets 113/114.50.
GBP/USD: Sterling rose to 1.4578, it’s highest since mid-February as expectations grew that Britain will vote to remain a member of the European Union. It has recovered around 3 percent in value in the fortnight since. Investors still worry that a vote for a Brexit in June would leave Britain, however, the intervention of U.S. President Barack Obama last week in favor of EU membership shifted the odds against Britain voting to leave. The pound gained around half a percent against the euro to trade at 77.50 pence, while against the dollar it traded around $1.4557. On the higher side major resistance is around 1.4550 and break above targets 1.4580/1.463/1.4660 levels. The pair is trading well above 21 W MA and is expected to reach 1.4600/1.4660 in short term. On the lower side minor support is around 1.4500 and break below targets 1.4450/1.4400 level.
USD/CHF: The Swiss franc trades flat at 0.9748 against the dollar, having touched a high of 0.9733 earlier in the session. The short term trend is slightly bearish as long as resistance 0.9800 holds. Any violation above 0.9800 will take the pair to next level till 0.9850/0.9900. The short term trend reversal only below 0.9500 level. On the lower side break below 0.9730 will drag the pair to next level till 0.9680/0.9630.
AUD/USD: The Australian dollar extended gains, pulling away from a low of 0.76911, struck in the previous session. The Aussie was steady at 0.7730, after hitting a high of 0.7753. It has rallied 0.7 percent so far this month and was up 4 cents this year. The short term trend is slightly bearish as long as resistance 0.7800 holds. On the higher side minor resistance is around 0.7760 and break above targets 0.7835/0.7850. The major support is around 0.7650 (daily Kijun-Sen) and break below will drag the pair till 0.7630/0.7575. The minor support is around 0.7680.
NZD/USD: The New Zealand dollar rose 0.3 percent to trade 0.6879, drifting away from a low of 0.6834, struck on Friday. The kiwi rose to a high of 0.6897, however, it was still way from a 10-month high of $0.7055. The gains were capped by Federal Reserve, Japan's Bank of Japan and the Reserve Bank of New Zealand policy meetings due in this week. Immediate resistance is located at 0.6913 (10-DMA), break above could take the pair to 0.6935. On the lower side, support is seen at 0.6836 (Previous Session Low).
Equities Recap
European shares advanced as investors remained cautious ahead BoJ and the Federal Reserve's policy meetings this week.
The pan-European FTSEurofirst 300 stock index advanced half a percent, Britain's FTSE 100 gained 0.4 percent, Germany's DAX rose 0.6 pct and France's CAC 40 edged up 0.3 pct.
The MSCI world equity index, which tracks shares in 45 countries, inch up 0.1 percent after three straight days of losses, taking it back towards an almost-5-month high touched last week.
Tokyo's Nikkei declined 0.49 pct at 17,353.28, with MSCI's broadest index of Asia-Pacific shares outside Japan falling 0.5 percent.
Shanghai Composite index nudged up 0.6 pct at 2,964.70 points, while CSI300 index closed up 0.5 pct at 3,179.16 points. HK’s Hang Seng index gained 0.5 pct at 21,407.27 points.
Commodities Recap
Crude futures edged up on hopes for an easing of the global oil glut, although gains were capped by concerns that a battle for market share between Saudi Arabia and Iran could intensify further. Front-month Brent crude futures traded at $44.99 per barrel at 1105 GMT, while U.S. crude futures were also up 27 cents, at $42.91 a barrel.
Gold reversed early gains as investors brace for monetary policy meetings in the United States and Japan. Spot gold eased 0.4 percent to $1,231.86 per ounce by 1105 GMT, after gaining 0.3 percent earlier in the session.
Treasuries Recap
The 10-year U.S. treasuries yield stood at 1.900, easing from a 4-week high of 1.914 percent touched on Monday.
The European bonds were trading mixed as investors await for Federal Reserve’s monetary policy meeting. The 10-year German yields were flat at 0.26 percent, after climbing 3 basis points on Monday. The yield on the 2-year bonds fell 1.43 pct to -0.497 pct. French 10-year bunds yield dipped 0.23 pct to 0.69 pct, Spanish 10-year bonds yield inched up 1.16 pct to 1.664 pct and Portuguese 10-year bonds yield fell 0.90 pct to 3.293 pct.
Japanese government bonds were firm, with prices of superlong JGBs rallying after strong results of the Bank of Japan's buying operations. The benchmark 10-year yield shed 3 basis points to minus 0.105 percent, while the 10-year JGB futures contract ended up 0.25 point at 151.86. The 30-year yield fell 7 basis points to 0.335 percent.
Gilts opened 5 ticks lower than the settlement of 119.55, but flat to the close.
Australian government bond futures fell to 1-month lows, with the 3-year bond contract off 2 ticks at 97.940. The 10-year contract also lost 2 ticks to 97.3350, while the 20-year contract was steady at 96.7650. New Zealand government bonds were largely flat at the short end while yields were a tad higher at the long end. The spread between Australian and New Zealand 2-year bonds dropped to 8 basis points, the thinnest in three years.
