Market Roundup
- EUR/USD 0.18%, USD/JPY -0.22%, GBP/USD 0.16%, EUR/GBP 0.02%
- DXY -0.09%, DAX -0.55%, FTSE -0.2%, Brent 0.46%, Gold 0.49%
- IMF chief optimistic on growth, but warns against trade protectionism
- Great Britain Feb Industrial Output MM, 0.1%, 0.4% forecast, 1.3% previous
- Great Britain Feb Industrial Output YY, 2.2%, 2.9% forecast, 1.6% previous, 1.2% revised
- Great Britain Feb Manufacturing Output MM, -0.2%, 0.2% forecast, 0.1% previous, 0.0% revised
- Great Britain Feb Manufacturing Output YY, 2.5%, 3.3% forecast, 2.7% previous, 2.2% revised
- Great Britain Feb Goods Trade Balance GBP, -10.20 bln, -11.95 bln forecast, -12.33 bln previous, -12.23 bln revised
- China pledges to allow more foreign investment in financial sector by year-end
- China March factory, consumer inflation slows in sign of ebbing economic growth
- Bank of France trims Q1 GDP growth estimate to 0.3 pct
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. consumer price index likely to remain unchanged in March after posting a gain of 0.2 percent February, while in the 12 months through March, the CPI is expected to have risen 2.4 percent. Excluding food and energy, the core CPI probably rose 0.2 percent, matching the gain in the previous month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Crude Oil Stocks for the week ending April 6.
- (1400 ET/1800 GMT) The U.S. reports its monthly budget statement for the month of March. The government is likely to show a budget deficit of $194 billion after posting a deficit of $215 billion in the previous month.
Key Events Ahead
- (0900 ET/1300 GMT) ECB Board member Pentti Hakkarainen participates in a panel discussion on "Risks of International Fragmentation" at the 2018 European Bank Executive Committee Forum-Brussels
- (1040 ET/1440 GMT) ECB supervisor Ignazio Angeloni participates in a panel discussion on "The Future of Europe" at the 2018 European Bank Executive Committee Forum-Brussels
- (1200 ET/1600 GMT) Swedish central bank deputy governor Cecilia Skingsley talks about digital currencies-Stockholm
- (1300 ET/1700 GMT) Treasury auctions $21 bn reopened 10-year notes
- (1400 ET/1800 GMT) U.S. Federal Reserve's FOMC releases minutes from its March 20-21 policy meeting-Washington, D.C.
FX Beat
DXY: The dollar index tumbled to a 2-week low amid rising geopolitical tensions surrounding Syria, while investors awaited the U.S. consumer inflation figures and minutes from the last FOMC meeting minutes for fresh cues on the Fed interest rates outlook. The greenback against a basket of currencies trades 0.1 percent down at 89.52, having touched a low of 89.44 earlier, its lowest since Mar. 28. FxWirePro's Hourly Dollar Strength Index stood at -123.30 (Highly Bearish) by 1000 GMT.
EUR/USD: The euro rallied to a 2-week peak after data showed production in Germany's engineering sector rose by a stronger-than-expected 3.9 percent to 223 billion euros in 2017, and will likely grow by at least 3 percent this year. Moreover, hawkish comments from the European Central Bank policymaker Ewald Nowotny continued to support the bid around the major. The European currency traded 0.2 percent up at 1.2382, having touched a high of 1.2387, its highest since Mar. 28. FxWirePro's Hourly Euro Strength Index stood at 15.40 (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 1.2321 (21-DMA), a break below could drag it lower 1.2260 (Apr. 6 Low).
USD/JPY: The dollar eased below the 107.00 handle as investors remained concerned about the possibility of a military response by the United States to the suspected chemical weapons attack in Syria last weekend. However, receding fears of a trade war between China and the United States restored some appetite for risk among investors. The major was trading 0.2 percent down at 106.97, having hit a high of 107.49 on Thursday, its highest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at -66.69 (Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. consumer price index and monthly budget statement. Immediate resistance is located at 107.46 (Apr. 6 High), a break above targets 107.90 (Feb. 21 High). On the downside, support is seen at 106.69 (10-DMA), a break below could take it lower 106.26 (21-DMA).
GBP/USD: Sterling surged to a fresh 2-week peak above the 1.4200 handle on the back of expectations that Bank of England would raise rates in May to curb inflation. However, the major trimmed gains after British manufacturing output fell unexpectedly in February, indicating that the economy may have slowed in the first quarter. The major traded 0.1 percent up at 1.4190, having hit a high of 1.4223 earlier, it’s highest since Mar. 27. FxWirePro's Hourly Sterling Strength Index stood at 13.65 (Neutral) by 1000 GMT. Immediate resistance is located at 1.4244 (Mar. 27 High), a break above could take it near 1.4278 (Feb. 2 High). On the downside, support is seen at 1.4094 (5-DMA), a break below targets 1.4060 (21-DMA). Against the euro, the pound was trading 0.05 percent down at 87.19 pence, having hit a high of 86.92 pence on Tuesday, it’s highest since Mar 22.
USD/CHF: The Swiss franc eased, extending losses for the second straight session, as markets awaited key U.S. inflation data to set the greenback's near-term direction. The major trades 0.1 percent up at 0.9580, having touched a low of 0.9534 on Tuesday, it’s lowest since Apr. 3. FxWirePro's Hourly Swiss Franc Strength Index stood at -21.94 (Neutral) by 1000 GMT. On the higher side, near-term resistance is around 0.9684 (Jan 15 High) and any break above will take the pair to next level till 0.9748 (Dec 29 High). The near-term support is around 0.9530 (21-DMA) and any close below that level will drag it till 0.9500.
Equities Recap
European shares plunged, while the greenback tumbled to a 2-week trough as escalating tensions in Syria added to market worries.
The pan-European STOXX 600 index slumped 0.3 percent to 377.45 points, while the FTSEurofirst 300 index fell 0.4 percent to 1,478.02 points.
Britain's FTSE 100 trades 0.1 percent down at 7,257.50 points, while mid-cap FTSE 250 gained 0.1 percent to 19,694.60 points.
Germany's DAX eased 0.3 percent at 12,365.63 points; France's CAC 40 trades 0.3 percent lower at 5,291.62 points.
Commodities Recap
Crude oil prices steadied after rising to their highest since 2014 in the previous session, supported by escalating Middle East tensions. International benchmark Brent crude was trading 0.4 percent up at $71.27 per barrel by 1002 GMT, having hit a high of $71.31 on Tuesday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.5 percent higher at $65.83 a barrel, after rising as high as $65.88, its highest since Mar. 27.
Gold prices rallied to a 1-week high as the dollar fell to two-week lows and as a series of geopolitical factors spurred demand for the safe-haven assets. Spot gold rose 0.5 percent to $1,345.45 an ounce as of 1007 GMT, having hit a high of $1,345.84 an ounce earlier, its highest since Apr. 4. U.S. gold futures gained 0.2 percent at $1,348 an ounce.
Treasuries Recap
The U.S. Treasuries traded higher as investors wait to watch the country’s consumer price index (PPI) data, scheduled to be released today 12:30GMT respectively. The yield on the benchmark 10-year Treasuries fell nearly 1 basis point to 2.79 percent, the super-long 30-year bond yields remained also slipped nearly 1 basis point to 3.00 percent and the yield on the short-term 2-year slumped 1-1/2 basis points to 2.29 percent.
The UK gilts traded mixed after the country’s manufacturing production for the month of February disappointed market expectations, while trade balance for the similar period beat consensus estimates. The yield on the benchmark 10-year gilts, rose 1/2 basis point to 1.41 percent, the super-long 30-year bond yields slipped nearly 1 basis point to 1.79 percent while the yield on the short-term 2-year traded 2-1/2 basis points higher at 0.91 percent.
The New Zealand government bonds closed higher as investors wait to watch the Reserve Bank of New Zealand (RBNZ) Assistant Governor McDermott’s speech, scheduled to be held today at 23:00GMT. The yield on New Zealand’s benchmark 10-year Treasury note, which moves inversely to its price, fell 1-1/2 basis points to 2.81 percent, the yield on the long-term 20-year note slumped 2-1/2 basis points to 3.40 percent and the yield on short-term 2-year closed 2 basis points lower at 1.92 percent
The Japanese government bonds remained flat as investors wait to watch the country’s 30-year auction, scheduled to be held on April 12 by 03:45GMT amid a silent trading week that witnessed data of least economic significance. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, hovered around 0.03 percent, the yield on the long-term 30-year note slipped 1 basis point to 0.72 percent and the yield on short-term 2-year remained flat at -0.15 percent.
The Australian government bonds traded mixed as investors preferred to stay on the sidelines ahead of the Reserve Bank of Australia (RBA) Financial Stability report. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, traded flat at 2.694 percent, the yield on the long-term 30-year Note dipped 2 basis points to 3.279 percent and the yield on short-term 2-year also surged nearly 1 basis point to 2.040 percent.
