Market Roundup
- BoJ Gov Kuroda – BoJ hasn’t shifted policy focus on rates, many ways to ease more if needed, recent JPY rise-stock market fall not BoJ’s fault.
- Mof flow data week-ended April 9 – Japanese sell net Y206 bln foreign stocks, Y1.1753 trln bonds, buy Y61.8 bln bills; foreign investors buy net Y146.5 bln Japanese stocks, Y816.5 bln bonds, Y1.1939 trln bills.
- Japan mulls near-zero-interest infrastructure loans – Nikkei.
- China Q1 GDP likely slightly lower than +6.8% y/y in Q4 but better than market expectations – China Business News, MNI.
- BoC Gov Poloz – BoC doesn’t have CAD agenda, not talking down CAD.
- ECB VP Constancio – Clear limited on negative rates, helicopter money won’t be effective, negative US rates doesn’t make sense, EZ different.
- Australia March employment +26.1k, unemployment 5.7%, participation 64.9%, +20k, 5.9% and 65.0% eyed, full-time employment -8.8k, jobless 30-mo low.
- Australia April MI inflation view +2.4% weighted mean, +3.6% trimmed mean.
- Non-residents held 64.1% of NZ govvies in March, February 64.7%.
- NZ March manufacturing PMI 54.7, lowest since October, February 55.9.
- Singapore MAS shifts to zero% appreciation of FX policy bank.
- Panama Papers reveal Hong Kong’s role in the world of tax havens – Nikkei.
Economic Data Ahead
- (0315 ET/0715 GMT) Switzerland March producer/import prices; last -0.6% m/m, -4.6% y/y.
- (0400 ET/0800 GMT) Italy March CPI final, +0.2% m/m, -0.2% y/y eyed; flash +0.2%, -0.2%.
- (0400 ET/0800 GMT) Italy March HICP – final, +2.0% m/m, -0.3% y/y eyed; flash +2.0%, -0.3%.
- (0500 ET/0900 GMT) EZ March inflation – final, +1.2% m/m, -0.1% y/y eyed; flash +0.2%, -0.1%.
- (0500 ET/0900 GMT) EZ March – ex-food/energy, +1.6% m/m, +1.0% y/y eyed; last +0.3%, +0.8%.
- (0830 ET/1230 GMT) US March CPI, +0.2% m/m, +1.1% y/y eyed; last -0.2%, +1.0%.
- (0830 ET/1230 GMT) US March – core, +0.2% m/m, +2.3% y/y eyed; last +0.3%, +2.3%.
- (0830 ET/1230 GMT) US March US weekly initial jobless claims, 270k eyed; last 267k.
- (1130 ET/1530 GMT) US March Cleveland Fed CPI; last +0.2%.
Key Events Ahead
- (0400 ET/0800 GMT) Ireland E750 mln, 1.0% 2026 IGB auction.
- (0700 ET/1100 GMT) BoE policy announcement, no change in 0.5% bank rate/QQE, 9-0 vote eyed.
- N/A IMF/World Bank, G20 meetings in Washington, DC, press conferences.
- (1000 ET/1400 GMT) Atlanta Fed Lockhart speaks at Chicago symposium.
- (1000 ET/1400 GMT)US Tsy Weiss, Fed Gov Powell Senate testimony.
FX Recap
USD: The dollar was broadly firmer on Thursday, having posted its biggest one-day gain in more than a month as an improvement in global sentiment led investors to trim bearish dollar positions. The index tracking the dollar against a basket of six major currencies was up 0.2 percent at 94.950, after rallying nearly 1 percent on Wednesday.
EUR/USD: The euro edged down about 0.1 percent to $1.1265 from a six-month high of $1.1465 touched on Tuesday. Intraday bias remains bearish till the time pair holds key resistance at 1.1315. A sustained break above it will drag the parity up towards $1.1402/$1.1469 marks. On the down side, key support level is seen at $1.1159/ $1.1057 marks.
USD/JPY: The Japanese Yen hovers around key resistance at 109.48 marks, pulling well away from a 17-month trough of 107.63 set a few days ago. A sustained close above it tests other resistances at 109.67/112.60/114.87/115.96 levels. A daily close below key support level at 108.04 will drag the parity down towards 107.51 marks. The yen got no help from Bank of Japan Governor Haruhiko Kuroda, who said overnight in a speech in New York that the central bank was ready to expand monetary stimulus again if recent weaknesses in inflation expectations persist, stressing that there are "many ways" to do so to achieve his ambitious price target.
GBP/USD: Sterling continues to fall against the dollar on Thursday, reverting to a trend that has seen the pound fall almost 7 percent in the past four months, amid worries that Britain will vote to leave the European Union. 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. A sustained break below key support $1.4228 level will drag the parity down at $1.4057 marks. A daily close above $1.4357 will take the parity up towards key resistances at $1.4504/$1.4602.
AUD/USD: - The Australian dollar eased from 10-month peaks on Thursday after optimism about global growth gave investors an excuse to trim bearish U.S. dollar positions, as it raised chances that the Federal Reserve will increase interest rates. Intraday bias remains bearish till the time pair holds key resistance at $0.7716 levels. On the downside, a sustained break below $0.7433 support levels will turn bias back to the downside for retesting 0.7365 low. A net 26,100 jobs were added to the economy in March, the biggest rise in 2016 and stronger than the market forecast of 18,000. In addition, the unemployment rate falls from 5.8% in February to 5.7% last month, the lowest since October 2013.
NZD/USD: The New Zealand dollar dropped nearly 1 percent on the day to $0.6860, and away from a peak of $0.6952 touched on Wednesday. Support was found at $0.6773. Resistance was seen at around $0.6970. Short term bias remains bearish for the moment.
Equities Recap
The Nikkei 225 index rallied 2.45% to 16,782.19 points on Thursday.
Chinese equity markets also enjoyed an upbeat start on Thursday, with Hong Kong's Hang Seng index rallying 0.94% to 21,356.29 points.
Australia's benchmark S&P/ASX 200 index was trading 0.90% higher at 5100.90 points on Thursday morning in Sydney.
South Korea’s Kospi was trading was trading 1.20% higher at 2005.05 points.
Commodities Recap
Oil prices fell on Thursday as OPEC warned of slowing demand and Russia hinted that there would only be a loose agreement with little commitments at the upcoming exporter meeting to rein in ballooning oversupply. Meanwhile, Goldman Sachs said that productivity gains by U.S. shale producers were keeping alive its "deflationary outlook" for oil prices as drillers manage to adjust to lower prices instead of going out of business. Brent crude futures were at $43.66 a barrel at 0123 GMT, half a dollar, or 1 percent, below their last close. U.S. West Texas Intermediate (WTI) futures were also down 1 percent at $41.60.
Gold extended losses into a third straight session on Thursday as the dollar strengthened and stock markets rose on encouraging economic data from China. Spot gold had dropped 0.7 percent to $1,233.71 an ounce by 0045 GMT, after falling 1 percent on Wednesday. The metal hit a three-week high of $1,262.60 earlier this week as stocks and the dollar tumbled. U.S. gold futures declined 1 percent.
Treasuries Recap
New Zealand government bonds gained, sending yields 1 basis point lower.
Australian government bond futures extended losses on the jobs data, with the three-year bond contract off 5 ticks at 98.070.
10-year US treasury yield at 1.763 percent vs US close of 1.762 percent on Wednesday.
BOJ offers to lend Y 3.0709 trln of JGBs on spot basis through 4/15 as a secondary source of JGBs.
