Market Roundup
- China State Planner - Says housing inventory level high.
- China State Planner - China faces downward pressure on investment into economy.
- China State Planner - Local govt’s unable to raise adequate levels of funding.
- China State Planner - China to expand reasonable and effective investment.
- China State Planner - Manufacturing companies has no strong willingness to invest.
- PBOC Sets Yuan Mid-Point at 6.4943 / Dlr Vs Last Close 6.4928.
- New Zealand Commodity Price Index -0.8% in April - ANZ Bank.
- Australia AIG Performance of Services Index Rises 0.2 Points to 49.7 in April.
- UK Shop Prices -1.7% y/y in April Vs -1.7% in March – BRC.
- Fed's Lockhart says ambivalent on whether to raise interest rates in June.
- Lockhart says Brexit could be a source of heightened global uncertainty.
- Lockhart says worried that Q1 GDP lull may persist.
- Lockhart says wage growth remains tepid.
- Lockhart says for time being favoring strong job gains over weak GDP data.
- Lockhart says been disappointed on domestic demand growth.
- Lockhart says consumer fundamentals remain solid, still sees economy growing at moderate pace.
- New Zealand Q1 S/Adj Unemployment Rate 5.7% (Reuters Poll 5.5%).
- New Zealand Q1 S/Adj Employment Rate +1.2% (Reuters Poll +0.7%).
- NZ Q1 Participation Rate 69.0% (Reuters Poll 68.6%).
- NZ Q1 Private Sector Wages (Ex-O'time) +0.4% on Pvs Qtr (Poll +0.3%).
- NZ Q1 Private Sector Wages (Ex-O'time) +1.8% on Year Ago (Poll +1.6%).
Economic Data Ahead
- (0345 ET/0745 GMT) Italy Markit/ADACI Services PMI, previous 51.2, consensus 51.3.
- (0350 ET/0750 GMT) France Markit Services PMI, previous 50.8, consensus 50.8.
- (0355 ET/0755 GMT) Germany Markit Services Final PMI, previous 54.6, consensus 50.5.
- (0400 ET/0800 GMT) EZ Markit Services Final PMI, previous 53.2, consensus 53.3.
- (0430 ET/0830 GMT) UK Markit/CIPS Construction PMI, previous 54.2, consensus 54.1.
- (0500 ET/0900 GMT) EZ Retail Sales, previous 0.2%, consensus 0.1%.
Key Events Ahead
- (0845 ET/1245 GMT) ECB Non Monetary Policy Committee Meeting.
FX Recap
USD: The dollar held steady near 106.55, having pulled up from Tuesday's low of 105.55 yen, the dollar's weakest level since October 2014.
EUR/USD: The euro edged up 0.1 percent to about $1.1506. The euro had climbed to $1.1616 on Tuesday, its strongest level since August, as worries over tepid global growth returned and pushed investors to the safety of low-yielding, liquid currencies. Intraday bias remains bearish till the time pair holds immediate resistance at $1.1532. A sustained break above it will drag the parity up towards key resistances at $1.1622/$1.1785 and $1.1833 marks. Key supports are seen at $1.1423/$1.1314/$1.1215.
USD/JPY: The yen backed off from an 18-month high against the dollar on Wednesday, having lost some steam as position squaring set in after its sharp rally since last week. Intraday bias remains bullish till the time pair holds immediate support at 106.15 levels. A daily close below 106.15 will drag the parity down towards key supports at 105.71, 105.45 and 104.55 levels respectively. Alternatively, reversal from key support will take the parity higher towards key resistances at 107.87, 109.49, 111.23, 112.60 and 113.42 levels respectively. Japanese banks will be closed in observance of Greenery Day.
GBP/USD: Sterling slipped to a two-week low against the euro on Tuesday after a poll showed the campaign for Britain to exit the European Union ahead of the rival "In" camp. Sterling fell by as much as 0.8 percent against the euro to 79.20 pence; it’s weakest since Feb 19, after the poll was published. The Sterling falls against the US dollar on Wednesday and supported around $1.4550 marks. A daily close above $1.47 will take the parity up towards key resistances at $1.4739 levels. Alternatively, reversal from key resistance will drag the parity down at $1.4473 marks.
AUD/USD: The Australian dollar nursed its losses following a sharp sell-off after the RBA cut interest rates to a record low of 1.75 percent on Tuesday, when falls in oil prices also weighed on commodity-sensitive currencies. The Aussie edged up 0.2 percent to $0.7502, after tumbling nearly 2.4 percent on Tuesday.
NZD/USD: The New Zealand dollar also skidded on broad U.S. dollar strength and falling dairy prices. New Zealand’s unemployment rate rose from a revised 5.4% in the December quarter to 5.7% last quarter on the other side employment growth accelerated from 1.0% to 1.2%, the strongest pace since the September 2013 quarter. In addition, dairy prices fell at the Global Dairy Trade auction on Tuesday night, after two rises in a row. Overall, prices dropped 1.4 per cent to US$2203. Support was found at $0.6773. Resistance was seen at around $0.7054.
Equities Recap
Japanese banks will be closed in observance of Greenery Day.
Hong Kong's benchmark Hang Seng index was trading 1.18% lower at 20,431 points, while the Shanghai Composite fell 0.11% to 2,989.36 points.
South Korea's Kospi index dropped 0.58% to 1,974.85 points.
Australia’s benchmark S&P/ASX 200 index was trading 1.15% lower at 5,292.60 points in Sydney.
New Zealand's S&P/NZX 50 index traded little changed at 6,843.96 points on Wednesday afternoon in Wellington.
Commodities Recap
Oil prices stabilized on Wednesday after falling for two straight days on concerns that slowing demand and rising Middle East production would extend a global supply overhang. International Brent crude futures were trading at $45.10 per barrel at 0140 GMT, up 13 cents, or 0.3 percent, from their last settlement. Brent has fallen more than 6 percent since April 29. U.S. West Texas Intermediate (WTI) futures were up 8 cents, or 0.2 percent, at $43.73 a barrel.
Gold fell for a second straight session on Wednesday, slipping further away from a 15-month high as the dollar steadied after recent sharp losses and as two Federal Reserve officials talked up U.S. interest rate hikes this year. Spot gold had eased 0.3 percent to $1,281.41 an ounce by 0328 GMT, after dropping 0.4 percent in the previous session. U.S. gold futures dropped 0.7 percent to $1,283.40, falling for a second straight session after a six-day rally. Earlier this week, gold had climbed to $1,303.60; it’s highest since January 2015, after the dollar slumped against the yen.
Treasuries Recap
New Zealand government bonds gained, sending yields 6.5 basis points lower at the long end of the curve.
Australian government bond futures extended their rally, with the three-year bond contract 2 ticks higher at 98.280 and near a two-month peak.
