Market Roundup
- Japan March PMI services 52.9 from Feb 51.3, at 19-month high.
- BoJ reduces amounts of 1-3 year JGBs purchased from Y300 bln to Y280 bln.
- Japan corporate pensions return to positive territory in ’16 for first time in two years – Nikkei.
- Japanese retailers quickly embracing bitcoin payments - Nikkei.
- White House disavows two controversial tax ideas (VAT, carbon tax) hours after officials say they’re under consideration – Washington Post.
- Fed Gov Tarullo – Volcker rule may be too complicated, should mull changes, should drop qualitative component in bank stress tests – Reuters.
- Richmond Fed Lacker departs after acknowledging he confirmed confidential Info – Financial Times.
- French election TV debate – Melenchon seen most convincing, Macron second, Macron seen having best plan for France, Le Pen out of running? – fourth, - Elabe poll.
- Australia March AIG PSI +2.7 points to 51.7, services back in expansion.
- Australia March VFACTS new vehicle sales +0.9% y/y, +0.8% y/y in Q1.
- New Zealand March job adverts +1.6% m/m, +17.7% y/y.
- New Zealand March QV residential property price index +12.9% y/y, Feb +13.5, prices up despite cooling Auckland.
- New Zealand March ANZ commodity price index +0.4% m/m, +23% y/y, Feb +20.9% y/y.
- New Zealand Fonterra GDT price index +1.6%, volumes up too.
Economic Data Ahead
- (0230 ET/0630 GMT) Sweden Mar PMI services; last 59.8.
- (0315 ET/0715 GMT) Spain Mar PMI services, 57.1 forecast; last 57.0.
- (0330 ET/0730 GMT) Sweden Feb industrial output, +0.6% m/m, +2.3% y/y forecast; last +2.0%, +1.3%.
- (0330 ET/0730 GMT) Sweden Feb new manufacturing orders; last unch y/y.
- (0345 ET/0745 GMT) Italy Mar PMI services, 54.2 forecast; last 54.1.
- (0350 ET/0750 GMT) France Mar PMI services, 58.5 forecast; flash 58.5.
- (0350 ET/0750 GMT) France Mar PMI composite, 57.6 forecast; flash 57.6.
- (0355 ET/0755 GMT) Germany Mar PMI services, 55.6 forecast; flash 55.6.
- (0355 ET/0755 GMT) Germany Mar PMI composite, 57.0 forecast; flash 57.0.
- (0400 ET/0800 GMT) Eurozone Mar PMI services, 56.5 forecast; flash 56.5.
- (0400 ET/0800 GMT) Eurozone Mar PMI composite, 56.7 forecast; flash 56.7.
- (0430 ET/0830 GMT) Great Britain Mar PMI services, 53.5 forecast; last 53.3.
- (0430 ET/0830 GMT) Eurozone Q4 unit labor costs, +2.0% y/y forecast; last +2.3%.
- (0815 ET/1215 GMT) United States Mar ADP national employment, +187k forecast; last +298k.
- (0945 ET/1345 GMT) United States Mar Markit PMI services - final; flash 52.9.
- (0945 ET/1345 GMT) United States Mar Markit PMI composite – final; flash 53.2.
- (1000 ET/1400 GMT) United States Mar ISM non-Mfg PMI, 57.0 forecast; last 57.6.
Key Events Ahead
- N/A London SSGA-OMFIF roundtable (to Apr 5), Atlanta Fed Lockhart address.
- (0430 ET/0830 GMT) RBA Heath in Bloomberg panel discussion.
- (0500 ET/0900 GMT) Greece E875 mln 26-week treasury bill auction.
- (0530 ET/0930 GMT) Germany E4 bln zero% 2022 Bobl auction.
- (0830 ET/1230 GMT) BoE MPC Vlieghe speaks in London.
- (1400 ET/1800 GMT) FOMC March 14-15 meeting minutes.
- (2000 ET/0000 GMT) Dallas Fed Kaplan in Q&A session at the University of Kansas.
FX Beat
DXY: The dollar tumbled versus its Japanese counterpart as North Korea’s launch of ballistic missile triggered a fresh bout of risk aversion. The greenback against a basket of currencies traded flat at 100.52, having hit a high of 100.73 in the previous session, its highest since Mar. 16. FxWirePro's Hourly Dollar Strength Index stood at 89.05 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro edged up, extending its recovery mode as the greenback eased as investors remained cautious ahead of the minutes of Federal Reserve's March meeting expected to be released later in the day. The European currency traded up at 1.0674, retreating from a low of 1.0642 touched on Monday, its lowest since Mar. 15. FxWirePro's Hourly Euro Strength Index stood at 0.90 (Neutral) by 0400 GMT. Investors now await Eurozone Markit service and composite PMI figures, ahead of U.S. ADP employment change and service PMI report released by both Markit and ISM. Immediate resistance is located at 1.0691 (78.6% retrace of 1.0905 and 1.0634), a break above targets 1.0737 (61.8% retrace). On the downside, support is seen at 1.0634 (Previous Session Low), a break below could drag it near 1.0600.
USD/JPY: The dollar declined, extending losses for the fourth consecutive session, as North Korea fired a ballistic missile into waters off its east coast early morning, ahead of talks between US president Donald Trump and his Chinese counterpart Xi Jinping. The major traded 0.1 percent down at 110.65, having touched a low of 110.26 in the previous session, its lowest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at 160.54 (Highly Bullish) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. ADP employment change, service PMI report released by both Markit and ISM and FOMC March policy meeting minutes. Immediate resistance is located at 111.00 (61.8 % retrace of 112.19 and 110.26), a break above targets 111.45 (38.2% retrace). On the downside, support is seen at 110.26 (Previous Session Low), a break below could take it near 110.00.
GBP/USD: Sterling steadied after falling in the previous session on the back of downbeat Britain's construction industry data. However, uncertainty over the terms of Britain's exit from the European Union continues to weigh on the British currency. Sterling trades flat at 1.2445, having hit a low of 1.2419 on Tuesday, its lowest since Mar. 30. FxWirePro's Hourly Sterling Strength Index stood at -2.91 (Neutral) by 0400 GMT. Investors’ attention will remain on UK Markit service PMI report ahead of U.S. economic data. Immediate resistance is located at 1.2486 (10-DMA), a break above could take it near 1.2555 (Apr 3 High). On the downside, support is seen at 1.2403, a break below targets 1.2375. Against the euro, the pound traded up at 85.75 pence, having hit an early low of 85.89, its lowest since Mar 31.
AUD/USD: The Australian dollar rose, halting its 4-day losing streak after data showed activity in Australia's service industry rose to 51.7 in February from a previous reading of 49.0. However, yesterday's RBA Governor Philip Lowe's comments on the health of domestic labor conditions continued to weigh on the major. The Aussie trades 0.1 percent up at 0.7568, having hit a low of 0.7545 in the previous session, it’s lowest since Mar. 14. FxWirePro's Hourly Aussie Strength Index stood at -64.64 (Bearish) by 0500 GMT. Investors will continue to digest dovish RBA remarks, ahead of U.S. economic data and FOMC latest meeting minutes. Immediate support is seen at 0.7540 (Mar-14 Low), a break below targets 0.7500. On the upside, resistance is located at 0.7611 (50.0% retrace of 0.7679 and 0.7545), a break above could take it near 0.7750 (78.6% retrace).
NZD/USD: The New Zealand dollar edged down as slight deterioration in risk environment weighed on Kiwi bulls sentiment. The major failed to benefit from higher oil prices and Moody’s upbeat remarks on New Zealand’s AAA as weaker GDT price index dented the pair’s demand. The Kiwi trades lower at 0.6966, having hit a fresh low of 0.6966, its weakest since Mar. 15. FxWirePro's Hourly Kiwi Strength Index was at 10.99 (Neutral) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. macro fundamental drivers and FOMC minutes. Immediate resistance is located at 0.6993 (21-DMA), a break above could take it near 0.7022 (Previous Session High). On the downside, support is seen at 0.6950, a break below could drag it lower 0.6910.
Equities Recap
Asian shares advanced, boosted by a bounce in Chinese shares, while investors remained cautious ahead of Presidents Donald Trump and Xi Jinping meeting on Thursday.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.4 percent.
Tokyo's Nikkei rose 0.2 percent to 18,847.00 points, Australia's S&P/ASX 200 index rose 0.33 percent to 5,875.90 points and South Korea's KOSPI was trading 0.2 percent down at 2,156.29 points.
Shanghai composite index edged up 1.19 percent to 3,260.92 points, while CSI300 index was trading 1.21 percent higher at 3,497.95 points.
Hong Kong’s Hang Seng was trading 0.1 percent lower at 24,233.88 points. Taiwan shares added 1.4 percent at 9,949.48 points.
Commodities Recap
Crude oil prices rose to a near 1-month high after an industry report showed a draw of 1.83 million barrels in United States crude oil inventories. International benchmark Brent crude was trading 0.3 percent up at $54.39 per barrel by 0417 GMT, having hit a high of $54.41 on Tuesday, its strongest since Mar. 8. U.S. West Texas Intermediate crude rose 0.4 percent to $51.28 a barrel, after rising as high as $51.09 in the previous session, its highest since Mar. 8.
Gold prices steadied after rising to a one-week high in the prior session, as appetite for riskier assets faded ahead of a meeting between the United States and Chinese presidents. Spot gold edged down 0.1 percent to $1,255.17 per ounce by 0424 GMT, having hit a high of $1,261.07 on Tuesday, its highest since March 27. U.S. gold futures inched down 0.1 percent to $1,257.10.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.330 percent lower by 0.02 bps, while 5-year yield was 0.015 bps down at 1.861 percent.
The Australian bonds rallied, tracking developments in the U.S. Treasuries. Also, the Reserve Bank of Australia (RBA) remained on hold at its monetary policy decision held yesterday.The yield on the benchmark 10-year Treasury note fell 1/2 basis point to 2.61 percent, the yield on 12-year note also slipped 1/2 basis point to 2.76 percent and the yield on short-term 2-year traded 1-1/2 basis points lower at 1.70 percent.
The New Zealand bonds declined, following a positive reading at last night’s GlobalDairyTrade (GDT) price auction. The yield on the benchmark 10-year bond, traded flat at 3.11 percent, the yield on 7-year note rose 1 basis point to 2.75 percent and the yield on short-term 2-year note also traded 1/2 basis point higher at 2.12 percent.
The Canadian government bond prices were slightly higher across the yield curve, with the two-year up 1 Canadian cent to yield 0.721 percent and the 10-year rising 13 Canadian cents to yield 1.552 percent. The 10-year yield touched its lowest intraday since Nov. 30 at 1.545 percent.
