Market Roundup
- BOJ says Keeps Monetary Policy Steady
- BOJ: Will Take Additional Easing Steps in 3 Dimensions of Quantity, Quality and Interest Rate, if needed to Hit Price Target
- BOJ: To Adopt Loan Support Program for Banks in Areas Hit by S. Japan Quake
- BOJ: Total Amount of Loans for New Fund Supply Operation is set at 300bln Yen
- BOJ: Will Provide Loans to Banks at Quake-Hit Area at Zero Interest Rate
- BOJ: Japan Real GDP Expected +1.2% in Fy2016/17 Vs +1.5% Projected in Jan
- BOJ: Japan Real GDP Expected +0.1% in Fy2017/18 Vs +0.3% Projected in Jan
- BOJ: Japan Real GDP Expected +1.0% in Fy2018/19
- BOJ: Japan Core CPI Expected +0.5% in Fy2016/17 Vs +0.8% Projected In Jan
- Japan Core CPI Expected +1.7% in Fy2017/18 Vs +1.8% Projected in Jan
- BOJ: Japan Core CPI Expected +1.9% in Fy2018/19
- Singapore Q1 Preliminary Unemployment Rate 1.9% Vs 1.9% in Q4 2015
- Singapore Total Employment +11,400 in Q1
- PBOC Sets Yuan Mid-Point at 6.4954 / Dlr Vs Last Close 6.4950
- Japan FinMin Aso: No Change to Japan's Currency Policy even when Japanese Markets are closed for Golden Week Holidays
- Japan EconMin Ishihara: CPI is Rising Gradually
- * Ishihara: Govt Will Support what BOJ is Say & Do Regarding 2% Inflation Targe
- Ishihara: Must wait and see to Judge Effects of BOJ's Negative Rate Policy
- Japan March Jobs-Applicants Ratio Rises to 1.30 from 1.28 in Feb (Poll: 1.28)
- Japan March Jobs-Applicants ratio Rises to Highest since Dec 1991
- Japan March Seasonally Adjusted Jobless Rate 3.2% - Govt (Reuters Poll: 3.3%)
- Brazil's Central Bank Holds Benchmark Interest Rate at 14.25% (Poll 14.25%)
- Brazil's Central Bank says Acknowledges Advances in Inflation Fight
- New Zealand's Reserve Bank OCR unchanged at 2.25%
Economic Data Ahead
- (0300 ET/0700 GMT) Spain HICP Flash
- (0300 ET/0700 GMT) Spain Unemployment Rate
- (0355 ET/0755 GMT) Germany Unemployment
- (0400 ET/0800 GMT) Norway Labour Force Survey
- (0400 ET/0800 GMT) Italy Wage Inflation
- (0400 ET/0800 GMT) Norway Indus Confidence
- (0400 ET/0800 GMT) Norway Retail Sales Ex. Auto
- (0500 ET/0900 GMT) Eurozne Cons Inflation Expectations
- (0500 ET/0900 GMT) Eurozne Selling Price Expectations
- (0500 ET/0900 GMT) Eurozne Consumer Confidence Final
- (0800 ET/1200 GMT) Germany HICP Prelim
Key Events Ahead
- N/A BELGIUM 7 Y E3.000B % 22/10/23 JOINT
- N/A BELGIUM 50Y E2.000B % 22/06/66 SYND
- (0500 ET/0900 GMT) Italy 5Y E2.250B 0.450% 01/06/21 1.75-2.25
- (0500 ET/0900 GMT) Italy 10Y E2.500B 1.600% 01/06/26 2.0-2.5BN
- (0500 ET/0900 GMT) Italy 7FR E3.000B 0.327% 15/07/23 2.5-3.0BN
FX Beat
USD: The dollar index slumped to 93.789, extending losses to hit a 1-week low of 93.725 after the Fed kept the interest rate on hold and indicated a gradual rate hike.
EUR/USD: The euro trades 0.1 percent higher at 1.1333, having touched session high of 1.1344. The greenback lost ground after the Federal Reserve indicated it was not in a rush to hike interest rates so soon, leaving the door open for an interest rate hike in June. Markets will now shift their focus towards series of economic data from the eurozone economies scheduled later in the day. The major declined to a session low of 1.1296, before climbing up to its current levels. Immediate resistance is located at 1.1360 (Previous session High), break above will take the pair above 0.1380 level. On the downside, support is seen at 1.1287 (5-DMA).
USD/JPY: The Japanese yen rose 2.9 percent to trade at 108.19 yen, against the dollar after the Bank of Japan held off from expanding monetary stimulus. Following the announcement the yen gained and Japanese stocks declined as investors were caught off guard, who had bet on additional stimulus measures. The decision came in the wake of data that showed Japan's core consumer price index dropped 0.3 percent in March, against economists' median estimate for a 0.2 percent gain. The economy's overall household spending slumped 5.3 percent versus previous 1.2 percent rise, adding further pressure on the BOJ to do more to spur growth. Immediate support is located at 108.02 (Apr 08 Low), break below could drag the pair to further losses. On the upside, resistance is seen at 111.88 (Session High).
GBP/USD: Sterling edged up to 1.4548, after declining from a high of 1.4621, struck in the previous session. It dropped to a low of 1.4473 after Organisation for Economic Co-operation and Development warned an "Out" vote would be a major setback, which would leave the UK economy 3 percent smaller by 2020. Against the euro it trades lower at 77.89. Immediate resistance is located at 1.4621 (Previous Session High), break above could take the pair to 1.4638 (12-Week High). On the lower side, support is seen at 1.4509 (5-DMA).
AUD/USD: The Australian dollar was steady at 0.7620, having slumped 2 percent in the previous session, recording its biggest 1-day drop in eight months. The Aussie was weighed down by downbeat inflation data, which revived expectations of a cut in rates by the Reserve Bank of Australia. However, the pair is seen making recover, after the economy's exports came in at -4.7 percent compared with previous -5.4 percent for the first quarter. The Aussie has dropped 2-1/2 cents, since touching a 10-month peak of 0.7835 one week ago. Immediate resistance is located at 0.7663 (20-DMA), while support is seen at 0.7548 (Previous Session Low).
NZD/USD: The New Zealand dollar rose 1.8 percent to 0.6948 after the Reserve Bank of New Zealand kept the interest rate unchanged at 2.25 percent. The kiwi bounced as high as 0.6941, pulling closer to a 10-month peak of 0.7055 touched last week and away from trough of 0.6806, hit on Wednesday. The pair continues to rise making fresh session highs. Immediate resistance is located at 0.6983 (Apr 21 High), break above will take it closer to its 10-month peak. On the lower side, support is seen at 0.6806 (Previous Session Low).
USD/CNY: The yuan reversed early losses after the Bank of Japan's decision to hold off on expanding monetary stimulus. The PBoC set the midpoint rate at 6.4954 per dollar prior to market open, 0.18 percent softer than the previous fix 6.4837. The spot yuan opened at 6.5000 per dollar and was changing hands at 6.4905, 0.07 percent stronger than the previous closeThe offshore yuan was trading 0.16 percent weaker than the onshore spot at 6.5009 per dollar.
Equities Recap
Asian shares traded on a mix note following the Federal Reserve, the Bank of Japan and Reserve Bank of New Zealnd policy decisions.
MSCI's broadest index of Asia-Pacific shares outside Japan added 0.4 percent.
Hong Kong stocks rose more than 1 percent, while Taiwan stocks lost1.0 pct at 8,473.87 points
Australia's S&P/ASX 200 index edged up 0.67 pct at 5,222.30 points, while Tokyo's Nikkei slumped 3.61 pct at 16,666.05, with Seoul shares nudged down 0.73 pct.
Commodities Recap
Crude futures edged down from 2016 highs as traders locked in profits after April's sharp rally, however, declining U.S. production and strong investor appetite could raise prices higher. International Brent crude futures were trading at $46.7 per barrel at 0628 GMT, while U.S. West Texas Intermediate futures were down 12 cents at $45.21 a barrel.
Gold extended gains after the Federal Reserve kept the door open for an interest rate hike in June, although it indicated it was in no hurry to take such a step. Spot gold rose 0.6 percent to $1,253.02 an ounce by 0629 GMT.
Treasuries Recap
The 10- year U.S. treasuries stood at 1.8313 percent down by 0.029 bps.
Australian government bond futures boosted on inflation figures, with the 3-year contract up 7 ticks at 98.140. The 10-year contract climbed 8.5 ticks to 97.4750 in a bullish flattening of the curve. The 20-year contract also rose 8.5 ticks to 96.9000.
New Zealand government bonds followed a rally in U.S. Treasuries after the Fed sounded in no rush to hike after its policy meeting. Yields were 5.5 basis points lower at the long end.
Canadian government bond prices were higher across the maturity curve, with the benchmark 10-year rising 43 Canadian cents to yield 1.505 percent, while the 2-year price up 4 Canadian cents to yield 0.677 percent. The 10-year yield on Tuesday reached its highest since Dec. 7 at 1.577 percent.
