Market Roundup
- RBA leave OCR as is as eyed, economic conditions continue to improve, unchanged policy consistent with growth-inflation targets, higher AUD would complicate economic transition, RBA more expansive on housing.
- BoJ Gov Kuroda – No comment on FX levels, too early to talk about exit strategy, ETF purchases part of current easy policy, not meant to achieve specific stock price level – Reuters.
- Japan TradeMin Seko – Don’t foresee problems for Japan in US study of trade deficits – Reuters.
- BoJ Tankan price expectations survey – Japan firms see CPI +0.7% in year, unchanged from previous survey, +1% eyed three years hence, also unchanged.
- Japan March monetary base Y447.2 trillion, end-Feb Y433.6 trillion.
- Philly Fed Harker – Reiterates support for two more rate hikes this year, could begin trimming bond portfolio late this year or early next – Reuters.
- NY Fed - US household debt could surpass ’08 peak this year – IFR.
- IIF - Global debt hits $215 trillion in ’16, led by emerging markets – Reuters.
- US March light vehicle sales 1.56 mln units, 16.62 million AR – AutoData.
- Australia Feb trade surplus A$3.574 bln, A$1.8 bln eyed, exports +1% m/m, imports -5%, floods only temporary setback for exports.
- Strong demand for Australia’s first card credit securitization – Reuters.
- New Zealand Q1 business confidence +17%, cap utilization 93.6%, Q4 ’16 +28%, 92.7%, signs pointing to rising inflation.
Economic Data Ahead
- (0400 ET/0800 GMT) Italy Q4 public deficit/GDP; last 2.1%.
- (0430 ET/0830 GMT) Great Britain Mar construction PMI, 52.4 eyed; last 52.5.
- (0500 ET/0900 GMT) Eurozone Feb retail sales, +0.5% m/m, +1.4% y/y eyed; last -0.1%, +1.2%.
- (0830 ET/1230 GMT) United States Feb int’l trade bal, $44.8 bln deficit eyed; last $48.5 bln deficit.
- (0945 ET/1345 GMT) United States Mar ISM New York index; last 731.9.
- (1000 ET/1400 GMT) United States Feb factory orders, +1.0% m/m eyed; last +1.2%, ex-transport +0.3%.
Key Events Ahead
- China, Taiwan and Hong Kong market holidays.
- N/A Strasbourg EU Commission seminar on future of EMU.
- N/A London SSGA-OMFIF roundtable (to Apr 5), Atlanta Fed Lockhart to speak.
- N/A Riksbank DepGov Floden speaks at Stockholm seminar.
- N/A Norges Bank Gov Olsen speaks at Oslo conference.
- (0430 ET/0830 GMT) Spain 6 and 12*-month treasury bill auctions.
- (0500 ET/0900 GMT) Austria total E1.32 bln zero/6.25% 2023/27 RAGB auctions.
- (0530 ET/0930 GMT) Germany E1 bln 0.1% 2026 index-linked Bund auction.
- (0530 ET/0930 GMT) UK DMO GBP2.5 bln 1.25% 2027 Gilt auction.
- (0530 ET/0930 GMT) Belgium E600/900 mln 3/6-month treasury certificate auctions.
- (0530 ET/0930 GMT) ECB zero% 7-day refi, E13.8 billion allotment eyed, E14.8 bln maturing.
- (0630 ET/1030 GMT) ESM E1.5 bln 3-month bill auction.
- (0800 ET/1200 GMT) NZ Fonterra dairy auction, GDT price index.
- (0930 ET/1330 GMT) ECB Pres Draghi speaks in Frankfurt.
- (1100 ET/1500 GMT) ECB/Finland CB Liikanen speaks in Helsinki.
- (1630 ET/2030 GMT) Fed Gov Tarullo speaks at Princeton, University.
FX Beat
DXY: The dollar eased versus the Japanese yen as an upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping and a suspected suicide bombing in St. Petersburg, Russia, drove investors towards safe-haven assets. The greenback against a basket of currencies traded down at 100.50, having hit a high of 100.25 in the previous session, its highest since Mar. 16. FxWirePro's Hourly Dollar Strength Index stood at 89.01 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro consolidated between a narrow range after rebounding from a 2-1/2 week low in the previous session as the bombings in St. Petersburg, Russia triggered risk-off market sentiment. The European currency traded flat at 1.0667, having touched a low of 1.0642 on Monday, its lowest since Mar. 15. FxWirePro's Hourly Euro Strength Index stood at -68.71 (Bearish) by 0400 GMT. Investors now await Eurozone retail sales figures, ahead of U.S. trade balance and factory orders data. Immediate resistance is located at 1.0698 (78.6% retrace of 1.0905 and 1.0651), a break above targets 1.0742 (61.8% retrace). On the downside, support is seen at 1.0642 (Previous Session Low), a break below could drag it near 1.0600.
USD/JPY: The dollar slumped to a fresh 1-week low as an upcoming meeting between U.S. President Donald Trump and Chinese President Xi Jinping and a suspected suicide bombing in St. Petersburg, Russia, prompted investors to rush for safe-haven assets. The major traded 0.4 percent down at 110.38, having touched a low of 110.36 earlier, its lowest since Mar. 28. FxWirePro's Hourly Yen Strength Index stood at 154.86 (Highly Bullish) by 0400 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. trade balance, factory orders and Fed Board Governor Daniel Tarullo’s speech. Immediate resistance is located at 111.21 (10-DMA), a break above targets 112.00. On the downside, support is seen at 110.36 (Mar 28 Low), a break below could take it lower 110.00.
GBP/USD: Sterling declined, extending previous session losses, as the sentiment around the British currency remains somewhat undermined, as yesterday’s poor UK manufacturing PMI report continues to weigh. The major trades 0.1 percent lower at 1.2473, hovering towards a low of 1.2376 hit last week, its lowest since Mar. 21. FxWirePro's Hourly Sterling Strength Index stood at -134.22 (Highly Bearish) by 0400 GMT. Investors’ attention will remain on UK Markit construction PMI report ahead of U.S. economic data. Immediate resistance is located at 1.2500, a break above could take it near 1.2555 (Previous Session High). On the downside, support is seen at 1.2443 (61.8% retrace 1.2375 and 1.2556), a break below targets 1.2400. Against the euro, the pound traded 0.1 percent lower at 85.54 pence, having hit a high of 84.81 last week, its highest since Feb 27.
AUD/USD: The Australian dollar slumped to a near 3-week low after reserve Bank of Australia left its cash rate at 1.5 percent, widely expected decision. However, the downside was limited as the economy's trade surplus rose to A$3.57 billion ($2.72 billion) in February as exports of gold and minerals rebounded, while imports took a sharp fall. The Aussie trades 0.2 percent down at 0.7582, having hit a low of 0.7577 earlier, it’s lowest since Mar. 15. FxWirePro's Hourly Aussie Strength Index stood at -159.86 (Highly Bearish) by 0500 GMT. Investors will continue to digest RBA interest rate decision, ahead of U.S. economic data and Fed Tarullo’s speech. Immediate support is seen at 0.7569 (Mar-6 Low), a break below targets 0.7530. On the upside, resistance is located at 0.7628 (50.0% retrace of 0.7679 and 0.7577), a break above could take it near 0.7700.
NZD/USD: The New Zealand dollar fell below the 0.7000 handle after data showed the economy's business morale dipped from previous 28 percent to 17 percent in Q1 2017. Moreover, the risk-off market profile also dented the bid tone around the major. The Kiwi trades 0.4 percent down at 0.6987, hovering towards a low of 0.6975 touched on Friday, its weakest since Mar. 17. FxWirePro's Hourly Kiwi Strength Index was at -32.58 (Neutral) by 0500 GMT. Investors’ will continue to track overall market sentiment, ahead of U.S. macro fundamental drivers and Fed speeches. Immediate resistance is located at 0.7040, a break above could take it near 0.7100. On the downside, support is seen at 0.6968 (Mar 16 Low), a break below could drag it lower 0.6950.
Equities Recap
Asian shares declined as an attack by a suspected suicide bomber on a metro train in St. Petersburg, Russia and caution tone ahead of a meeting between U.S. President Donald Trump and Chinese President Xi Jinping later this week triggered a fresh bout of risk aversion.
MSCI's broadest index of Asia-Pacific shares outside Japan eased.
Tokyo's Nikkei fell 1.05 percent to 18,784.66 points, Australia's S&P/ASX 200 index eased 0.25 percent to 5,857.90 points.
South Korea's KOSPI was trading 0.25 percent down at 2,162.32 points.
China, Hong Kong, and Taiwan were closed for holidays.
Commodities Recap
Crude oil prices edged higher, reversing some of its previous session losses, despite a rebound in Libyan production and a rise in U.S. drilling rig capacity. International benchmark Brent crude was trading 0.1 percent up at $53.14 per barrel by 0420 GMT, having hit a high of $53.74 on Friday, its strongest since Mar. 9. U.S. West Texas Intermediate crude rose 0.1 percent to $50.26 a barrel, after rising as high as $50.80 last week, its highest since Mar. 9.
Gold prices touched a one-week high, supported by a weaker dollar as investors turned to safe-haven assets on worries over geopolitical tensions. Spot gold rose 0.2 percent to $1,256.09 per ounce at 0423 GMT, having hit a high of $1,256.99 earlier, its highest since March 28. U.S. gold futures were up 0.3 percent at $1,257.9.
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 jumped sharply following the Reserve Bank of Australia’s (RBA) monetary policy decision. The yield on the benchmark 10-year Treasury note plunged 6-1/2 basis points to 2.62 percent, the yield on 15-year note also plunged nearly 6-1/2 basis points to 2.99 percent and the yield on short-term 2-year traded 3-1/2 basis points lower at 1.72 percent.
The New Zealand bonds traded higher as investors are curiously eyeing the GlobalDairyTrade (GDT) price auction, scheduled to be held on April 5 for detailed direction in the debt market. The yield on the benchmark 10-year bond slumped 7 basis points to 3.11 percent, the yield on 7-year note plunged 4 basis points to 2.74 percent and the yield on short-term 2-year note also traded 3-1/2 basis points lower at 2.11 percent.
The Canadian government bond prices were mixed across the yield curve, with the two-year flat to yield 0.749 percent and the 10-year rising 10 Canadian cents to yield 1.612 percent.
