Market Roundup
• Weak US retail sales, PPI data reinforce Fed caution on rates; March RS -0.3%, PPI -0.1%.
• U.S. business inventories fall slightly (-0.1% vs -0.1 forecast, 0.1 previous), sales weaken further; Auto inventories rose 1.3 percent in February after increasing 0.8 percent in January.
• BoC holds rates (0.5%), cites weak global/US growth outlook, govt spending offsets weakness elsewhere.
• ECB’s Nowotny: Euro Zone in extraordinary policy situation w/near zero rates, if no clear improvement in inflation no room for changes to monetary policy.
• Fed’s Beige book: US econ activity expanded, several regions see pickup in wage growth.
• Oil prices fall as concerns over Doha 'freeze' meeting grow, Saudi oil minister rules out production cut.
• GDPNow : forecast for real GDP growth in Q1 ‘16 is 0.3% up from 0.1 percent on April 8.
• Barclays GDP tracking model has 0.4% (0.3% prior) after upward revisions to prior months retail sales ... sees Q1 real PCE 1.7% vs 1.5% previous.
• China trade data boosts dollar, banks (JPM) lead stocks higher.
Looking Ahead - Economic Data (GMT)
• 22:30 New Zealand Manufacturing PMI Mar 56-previous
• 23:50 Japan Foreign Bond Investment w/e -1555.1b- previous
• 23:50 Japan Foreign Invest JP Stock w/e 415.2b- previous
• 01:30 Australia Employment* Mar forecast 20.0k, 0.3k- previous
• 01:30 Australia Full Time Employment* Mar 15.9k- previous
• 01:30 Australia Participation Rate* Mar forecast 65%, 64.90%- previous
• 01:30 Australia Unemployment Rate Mar forecast 5.9%, 5.80%-previous
Looking Ahead - Events, Other Releases (GMT)
• No Significant Data
Currency Summaries
EUR/USD is likely to find support at 1.1270 levels and currently trading at 1.1286 levels. The pair has made session high at 1.1325 and hit lows at 1.1270 levels. The U.S. dollar surged higher against euro on Wednesday as investors preferred riskier assets as gains in global stock markets and improved data out of China drew out investors from low-yielding currencies in Europe and Japan. Softer-than-expected U.S. producer prices and retail sales numbers last month briefly pushed the dollar lower against euro in the early US session, but in quick succession dollar regained strength against euro shrugged off weak retail sales data.Risk appetite rose after surprisingly upbeat Chinese trade data offered hope Asia's biggest economy is finally stabilizing. However, lower U.S. retail sales in March added to evidence that economic growth stumbled in the first quarter. The euro fell 0.9 percent against the dollar to $1.1278 hitting two low at $1.1274 levels.
GBP/USD is supported in the range of 1.4180 currently trading at 1.4214 levels. It reached session high at 1.4254 and hit low at 1.4187 levels. Sterling fell against the dollar on Wednesday, as risk sentiment eased as world stock rebounded after surprisingly upbeat trade data allayed concerns over China's economy and also uncertainty about Britain's membership with European union weighing on the currency pair . The British pound has declined more than 6 percent against dollar after concerns started that UK interest rates may be delayed this year due to slowing UK economy and also closely fought debate over a "Brexit" from the EU. Sterling fell 0.4 percent on Wednesday to $1.4221 , more than a cent below a one-week high of $1.4348 struck on Tuesday after data showed British inflation picking up in March. On the day, oil was down more than 1 percent and the boost for commodity-reliant currencies from Tuesday’s jump faded in morning trade in Europe.
USD/CAD is supported at 1.2700 levels and is trading at 1.2811 levels. It has made session high at 1.2826 and lows at 1.2744 levels. The Canadian dollar weakened slightly against US dollar on Wednesday as oil prices retreated and after the Bank of Canada sounded caution on the country's growth outlook. The central bank kept interest rates steady, saying weaker global growth, a less favorable U.S. outlook and shrinking business investment would have driven the economic outlook lower if not for the boost from the government's fiscal stimulus. Meanwhile, U.S. crude CLc1 prices were down 0.50 percent at $41.96 a barrel as comments from Russia's energy minister added to doubts that a producer meeting set for Sunday would yield a positive outcome. The currency's weakest level was C$1.2827, while it touched its strongest since July 15 last year at C$1.2744.
USD/JPY is supported around 108.80 levels and currently trading at 109.37 levels. It hit session high at 109.37 and made session lows at 109.00 levels. The dollar rose to a 1-week high against the Japanese yen on Wednesday, as demand for riskier assets increased after upbeat Chinese trade data allayed concerns over China's economy. The dollar advanced higher against Japanese yen shrugging off softer-than-expected U.S. producer prices and retail sales numbers last month briefly pushed the dollar lower, but Wednesday's dollar uptrend remained intact. U.S. retail sales unexpectedly fell in March as households cut back on purchases of automobiles and other items, further evidence that economic growth stumbled in the first quarter. The Commerce Department said retail sales declined 0.3 percent last month, confounding economists' expectations for a 0.1 percent gain. They were unchanged in February.
Equities Recap
European shares rose on Wednesday to a two-week high as a rise in Chinese exports buoyed global stock markets, with mining stocks and banks among the best performers.
UK's benchmark FTSE 100 closed up 1.78 percent, the pan-European FTSEurofirst 300 ended the day up by 2.36 percent, Germany's DAX ended up by 2.48 percent, France’s CAC finished the day up by 2.97 percent.
Wall Street rallied for a second straight day on Wednesday as investors bought up financial shares after JPMorgan's quarterly results.
Dow Jones closed up by 0.93 percent, S&P 500 ended up by 0.96 percent, Nasdaq finished the day up by 0.79 percent.
Treasuries Recap
U.S. Treasury yields rose modestly on Wednesday, led by shorter-dated maturities, as Wall Street's strong opening helped markets shrug off weaker-than-expected readings on U.S. producer prices and retail sales.
Yields on two-year Treasury notes rose about 1.5 basis points to yield 0.7584 percent. For 30-year bonds , yields were flat at 2.6043 percent.
Benchmark 10-year Treasury yields rose one basis point to 1.7886 percent.
Commodities Recap
The price of gold fell from the previous day's three-week peak on Wednesday as the dollar surged to a two-week high against the euro and major stock markets rose after surprisingly upbeat trade data allayed concerns over China's economy.
Spot gold was down 0.7 percent at $1,246.90 an ounce at 1:58 p.m. EDT (1758 GMT), while U.S. gold futures for June delivery settled down 1 percent at $1,248.30.
Oil futures fell from fresh four-month highs in choppy trading on Wednesday as comments from Russia's energy minister added to doubts a producer meeting set for Sunday in Doha to discuss freezing output would yield a positive outcome.
Brent crude settled down 51 cents at $44.18 per barrel, while U.S. crude settled down 41 cents at $41.76
