Market Roundup
- Moody's: Asian Corporate High-Yield Default Rate Will Remain Moderate in 2016, Despite Rise in Q1 2016
- S. Korea C/Bank: Inflation to Accelerate In H2, Gradually Approach 2% Target
- Thai March Mfg Output +1.83% on Year (Vs -0.1% in Poll) - Industry Ministry
- ECB's Praet: Cutting Rates Further Requires Distinct Worsening Of Conditions, Doesn't Think It Will Be Needed In Near Future - Expansión Newspaper
- Australia March Private-Sector Credit +0.4% M/M, S/Adj – C/Bank (Poll +0.6%)
- Australia March Housing Credit +0.5% M/M, S/Adj -- Central Bank
- Australia Q1 Producer Price Index -0.2% Q/Q
- Australia Q1 PPI +1.2% Yr/Yr
- PBOC Sets Yuan Mid-Point at 6.4589 / Dlr Vs Last Close 6.4779
- New Zealand Business Confidence +6.2% in April Vs +3.2% in Pvs Survey - ANZ
- New Zealand Business Own Activity Outlook +32.1% in April Vs +29.4% in Previous Survey
- UK April Consumer Confidence Falls to -3 Vs 0 in March, Lowest Since Dec 2014 - Gfk (Reuters Poll -1)
- UK Consumer Economic Expectations for Next 12 Months -14 in April Vs -12 in March, Lowest Since June 2013 – Gfk
- S. Korea Says March Industrial Output S/Adj -2.2% Vs Feb (Reuters Poll +0.1%)
- S. Korea Says March Industrial Output -1.5% Vs Yr Earlier (Reuters Poll +0.8%)
- S. Korea Says March Service Sector Output S/Adj +0.8% Vs Feb
- New Zealand S/Adjusted New Dwelling Consents -9.8% in March Vs Pvs Month
Economic Data Ahead
- (0300 ET/0700 GMT) Spain Estimated GDP QQ
- (0300 ET/0700 GMT) Norway Reg'd Unemployment SA
- (0300 ET/0700 GMT) Spain Estimated GDP YY
- (0300 ET/0700 GMT) Norway Reg'd Unemployment NSA
- (0300 ET/0700 GMT) Switzerland KOF Indicator
- (0400 ET/0800 GMT) Norway Credit Indicator YY
- (0400 ET/0800 GMT) Italy Unemployment Rate
- (0400 ET/0800 GMT) Norway CB Currency Purchase
- (0430 ET/0830 GMT) Great Britain M4 Money Supply
- (0430 ET/0830 GMT) Great Britain BOE Consumer Credit
- (0430 ET/0830 GMT) Great Britain Mortgage Lending
- (0430 ET/0830 GMT) Great Britain Mortgage Approvals
- (0500 ET/0900 GMT) Eurozone Infl Ex Food & Enr Flash
- (0500 ET/0900 GMT) Eurozone GDP Flash Estimate QQ
- (0500 ET/0900 GMT) Italy CPI (EU Norm) Prelim YY
- (0500 ET/0900 GMT) Italy CPI (EU Norm) Prelim MM
- (0500 ET/0900 GMT) Italy Consumer Price Prelim YY
- (0500 ET/0900 GMT) Eurozone Unemployment Rate
- (0500 ET/0900 GMT) Eurozone GDP Flash Estimate YY
- (0500 ET/0900 GMT) Italy Consumer Price Prelim MM
- (0500 ET/0900 GMT) Eurozone Inflation, Flash YY
- (0600 ET/1000 GMT) Italy Producer Prices YY
- (0600 ET/1000 GMT) Spain Current Account Balance
- (0600 ET/1000 GMT) Italy Producer Prices MM
Key Events Ahead
No Significant Events Scheduled
FX Beat
USD: The dollar lost momentum across the board and hit an 18-month low against the yen after the Bank of Japan's decision the previous day to hold off from expanding its monetary stimulus.
EUR/USD: The euro extended gains, trading 0.3 percent higher at 1.1384. The greenback continues to decline after the Federal Reserve left interest rates unchanged, pushing the expectations for a rate hike further into the future. The Fed was unlikely to raise interest rates amid an apparent slow-down in the U.S. economy. The euro rose to a high of 1.1367 in the previous seesion after eurozone economic sentiment improved more than expected in April. Markets now await series of economic data from the eurozone economies for further cues on the pair. The pair continues to rise, hovering towards session high of 1.1397. Immediate resistance is located at 1.1411 (Mar 31 High), break above could target 1.1450. On the lower side, support is seen at 1.1331 (20-DMA).
USD/JPY: The Japanese yen hit an 18-month high against the dollar, strengthened by the Bank of Japan's decision the previous day to hold off from expanding its monetary stimulus. The yen rose to a high of 107.076 yen, recording its strongest level since October 2014. The dollar trades 0.7 percent down at 107.30 yen, following on from a 3.0 percent decline in the previous session. The renewed rise in the yen has hurt the exporters and left the Nikkei down 5 percent for the week on Thursday. Immediate support is located at 107.07 (Session Low), break below could breach the 107 level. On the upside, resistance is seen at 108.44 (Apr 11 High).
GBP/USD: Sterling rallied against the dollar to hit a 16-week high of 1.4656 as the greenback continues to decline on expectations that the Fed is unlikely to raise interest rates any time soon. The strength in the sterling is driven by dovish Fed outcome, coupled by markets expectations the Britain would vote to stay in the European Union, especially after U.S. President Barack Obama backed the stay campaign. Immediate resistance is seen at 1.4656 (Session High), while support is located at 1.4571 (5-DMA). Against the euro, it trades at 77.75, having touched a high of 77.54 in the previous session.
AUD/USD: The Australian dollar edged up 0.5 percent to 0.7664, from a low of 0.7571, struck in the previous session. The Aussie has declined 1 percent this week after unexpected inflation figures for the first quarter signaled markets to price in a greater chance of a cut in interest rates. Markets now await the Reserve Bank of Australia policy meeting scheduled on May 3. Economists still expect the central bank to stay pat and keep rates at a record low of 2.0 percent; however, 11 out of 49 respondents polled by Reuters forecast a cut. Immediate resistance is located at 0.7689 (Apr 12 High, break above could target 0.7712 (10-DMA). On the downside, support is seen at 0.7615 (Mar 30 Low).
NZD/USD: The New Zealand dollar was trading 0.2 percent higher at 0.6977 after the Reserve Bank of New Zealand kept rates on hold on Thursday. The kiwi touched sessions high of 0.6988, hovering towards a peak of 0.7054 struck last week. It was on course for a monthly rise of nearly 1 percent in the third consecutive month of gains. Immediate resistance is located at 0.6989 (Previous Session High), break above could take the pair near 0.7048. On the downside, support is seen at 0.6922 (10-DMA).
USD/CNY: The yuan reversed some of its early gains, as state-owned banks appeared to withhold offering dollar liquidity in strong corporate demand. The PBoC set the midpoint rate at 6.4589 per dollar prior to market open, 0.57 percent firmer than the previous fix 6.4954. The spot yuan opened at 6.4630 per dollar and was trading at 6.4744, only 0.05 percent stronger than the previous close and 155 pips weaker than the midpoint. While the offshore yuan was trading 0.11 percent weaker than the onshore spot at 6.4818 per dollar.
Equities Recap
Asian shares were subdued following a late decline at the Wall Street.
MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.5 percent.
Japan markets were closed in observance of Showa Day.
Shanghai Composite index trades flat, while Hong Kong's Hang Seng index slumped 1.50 percent.
Australia's S&P/ASX 200 index gained 0.51 pct at 5,252.30 points, while Taiwan stocks lost 1.1 pct at 8,377.90 points, with Seoul shares edged down 0.31 pct.
Commodities Recap
Crude oil prices edged down as a rise in Middle East output may weigh on the stronger markets witnessed in April, however, declining U.S. production and a weakening dollar are still offering support. International benchmark Brent crude futures were trading at $47.80 per barrel at 0626 GMT. U.S. West Texas Intermediate crude futures were down 18 cents at 45.85 a barrel. However, both contracts remained near 2016 highs of $48.19 and $46.14 per barrel respectively.
Gold rallied to a high of $1,280.82 an ounce, recording its biggest weekly rise, as the dollar declined after the BoJ and the Federal Reserve stood pat on policy. Spot gold was 0.5 percent higher at $1,271.76 an ounce by 0629 GMT.
Treasuries Recap
The 10-year U.S. treasuries yield stood at 1.8243 percent down by 0.014 bps.
Australian government bond futures were firm, with the 3-year bond contract up 2 ticks at 98.160. The 10-year contract edged up 1 tick to 97.4950, while the 20-year contract gained 1 tick to 96.9150.
New Zealand government bonds gained slightly with yields down 1 to 2 basis points in the middle of the curve.
Canadian government bond prices were higher across the maturity curve, with the benchmark 10-year rising 20 Canadian cents to yield 1.479 percent, while the 2-year price up 1 Canadian cent to yield 0.674 percent. The Canada-U.S. 2-year bond spread was 4.8 basis points less negative at -11.6 basis points, its narrowest gap since Nov. 23 last year, as Treasuries outperformed.
