Market Roundup
- Brexit deadlocked again: British parliament fails to find an alternative
- Outlook for UK business darkens fast ahead of Brexit, BCC warns
- Japan Inc's inflation expectations stagnate in blow to BOJ
- Australia's central bank sets measured tone on rates before budget
- Australia government set to offer surplus, tax cuts in pre-poll budget
- Australia Feb Building Approvals, 19.1%, -1.0% f'cast, 2.5% prev, 2.3% rvsd
- New Zealand Q1 business confidence falls, boosts rate cut expectations
Economic Data Ahead
- (0430 ET/0830 GMT) Great Britain Mar Markit/CIPS Cons PMI, 49.8 f'cast, 49.5 prev
- (0500 ET/0900 GMT) EZ Feb Producer Prices MM, 0.1% f'cast, 0.4% prev
- (0500 ET/0900 GMT) EZ Feb Producer Prices YY, 3.1% f'cast, 3.0% prev
Key Events Ahead
- (0300 ET/0700 GMT) ECB's Praet speaks at the 6th international conference at Goethe University in Frankfurt am Main, Germany
- (0330 ET/0730 GMT) Bank of France Governor Francois Villeroy de Galhau will present annual letter in Paris
- (0730 ET/2130 GMT Fed's Kaplan speaks after Fed policymakers sharply downgraded their forecasts for interest rates this year and next, Toronto
FX Beat
DXY: The dollar index rallied to a 3-week peak, as the 10-year Treasury yield surged, pulling back from a 15-month low of 2.34 percent recorded last week. The greenback against a basket of currencies traded flat at 97.32, having touched a peak of 97.39, its highest since Mar. 11. FxWirePro's Hourly Dollar Strength Index stood at 98.98 (Slightly Bullish) by 0500 GMT.
EUR/USD: The euro plunged to a 3-1/2 week low after Italian Economy Minister Giovanni Tria said the government will set a new 2019 budget deficit target below the 2.5 percent of gross domestic product predicted by the Organisation for Economic Cooperation and Development. The European currency traded 0.1 percent down at 1.1202, having touched a low of 1.1195, its lowest since Mar. 8. FxWirePro's Hourly Euro Strength Index stood at -1.28 (Neutral) by 0500 GMT. Investors’ attention will remain on the Eurozone producer price index, and ECB Praet's speech, ahead of the U.S. durable goods and total vehicle sales. Immediate resistance is located at 1.1246 (Mar. 29 High), a break above targets 1.1285 (Mar. 28 High). On the downside, support is seen at 1.1176 (Mar. 7 Low)., a break below could drag it till 1.1155.
USD/JPY: The dollar rallied to a near 2-week peak after data showed the Institute for Supply Management (ISM) index of national factory activity rose to 55.3 in March from 54.2 in February. The major was trading 0.05 percent up at 111.39, having hit a high of 111.45 earlier, its highest since Mar. 20. FxWirePro's Hourly Yen Strength Index stood at -66.56 (Bearish) by 0500 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. durable goods and total vehicle sales. Immediate resistance is located at 111.62 (Mar. 18 High), a break above targets 111.92 (Mar. 6 High). On the downside, support is seen at 111.06 (Mar. 13 Low), a break below could take it lower at 110.74 (Mar. 8 Low).
GBP/USD: Sterling plunged below the1.3100 handle, after the British parliament on Monday failed to agree on any alternative to Prime Minister Theresa May's withdrawal deal from the European Union. The major traded 0.2 percent down at 1.3074, having hit a low of 1.2976 on Thursday; it’s lowest since Mar. 11. FxWirePro's Hourly Sterling Strength Index stood at 14.96 (Neutral) 0500 GMT. Investors’ attention will remain on the UK Markit construction PMI, ahead of the U.S. fundamental drivers. Immediate resistance is located at 1.3160 (Jan. 31 High), a break above could take it near 1.3198 (Mar. 5 High). On the downside, support is seen at 1.2976 (Mar. 29 Low), a break below targets 1.2924 (Feb. 5 Low). Against the euro, the pound was trading 0.2 percent down at 85.72 pence, having hit a high of 84.83 last week, it’s highest since Mar. 13.
AUD/USD: The Australian dollar declined, extending previous session losses after the Reserve Bank Australia struck a cautious note in keeping the official cash rate at a record low of 1.5 percent at today's April board meeting. The Aussie trades 0.4 percent down at 0.7084, having hit a high of 0.7168 last week, it’s highest since Feb. 27. FxWirePro's Hourly Aussie Strength Index stood at -45.63 (Neutral) by 0500 GMT. Investors will continue to track overall market sentiment, ahead of U.S. economic releases. Immediate support is seen at 0.7041 (Mar. 14 Low), a break below targets 0.7003 (Mar. 8 Low). On the upside, resistance is located at 0.7149 (Mar. 20 High), a break above could take it near 0.7198 (Feb. 27 High).
NZD/USD: The New Zealand dollar slumped to a 3-1/2 week low after data showed domestic business confidence fell in the first quarter, indicating softer growth in the first half of the year and consolidating expectations of an interest rate cut. The Kiwi trades 0.3 percent down at 0.6780, having touched a low of 0.6771, its lowest level Mar. 8. FxWirePro's Hourly Kiwi Strength Index was at -129.73 (Highly Bearish) by 0500 GMT. Investors’ will continue to track broad-based market sentiment, ahead of U.S. economic data. Immediate resistance is located at 0.6827 (Mar. 5 High), a break above could take it near 0.6874 (Mar. 18 High). On the downside, support is seen at 0.6752 (Mar. 6 Low), a break below could drag it below 0.6719 (Feb. 12 Low).
Equities Recap
Asian shares rallied after a survey showed factory activity in China unexpectedly grew for the first time in four months in March, ebbing concerns over the global economy.
MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent.
Tokyo's Nikkei declined 0.05 percent to 21,505.31 points, Australia's S&P/ASX 200 index gained 0.4 percent to 6,242.40 points and South Korea's KOSPI rose 0.4 percent to 2,176.94 points.
Shanghai composite index surged 0.3 percent to 3,180.98 points, while CSI300 index traded 0.1 percent down at 3,973.35 points.
Hong Kong’s Hang Seng traded 0.1 percent higher at 29,589.33 points. Taiwan shares added 0.5 percent to 10,690.30 points
Commodities Recap
Crude oil prices surged to fresh 2019 highs, supported by firm Chinese economic data that eased demand concerns, the possibility of more sanctions on Iran and further Venezuelan supply disruptions. International benchmark Brent crude was trading flat at $69.12 per barrel by 0433 GMT, having hit a high of $69.47, its highest since Nov. 13. U.S. West Texas Intermediate was trading flat at $61.73 a barrel, after rising as high as $62.01, its highest since the Nov. 8.
Gold prices eased to a more than 3-week low as waning global economic slowdown concerns boosted the dollar and global markets. Spot gold was 0.2 percent down at $1,285.51 per ounce by 0444 GMT, having touched a low of $1,285.44, its lowest since March 8. U.S. gold futures were down about 0.2 percent at $1,291.30 an ounce.
Treasuries Recap
The Japanese government bond prices dipped, with the five-year JGB yield 1 basis point higher at minus 0.185 percent and the 10-year yield edged up 0.5 basis point at minus 0.080 percent. The 30-year yield stood unchanged at 0.515 percent.
The Australian 3-year bond future slipped 3 ticks to 98.625 but that follows weeks of gains that took the contract to record highs. The 10-year contract eased 4 ticks to 98.1850.
The yields on New Zealand government bonds edged up around 2 basis points.
The Canadian government bond prices were lower across a steeper yield curve. The 10-year was down 74 Canadian cents to yield 1.703 percent.
