Market Roundup
- CFTC IMM CTA data - Specs lash net USD longs to lowest since January ’09.
- G20 worried by modest global growth, commodities weakness
- IMF members urge growth-friendly spending, new lending tools
- Policymakers fret as storm clouds gather over world economy
- Oil slides after Saudi opposition blocks talks on output freeze
- Japan’s pitch for FX action meets cool G20, US response
- Japan rules out FX devaluations but signals action vs abrupt JPY spike
- Japanese government promises to back quake-hit companies
- CLSA - Yuan peg to USD may end in ’17 – South China Morning Post.
- China to implement appropriate monetary, more forceful fiscal policies
- China March new home prices +4.9%y/y, Feb +3.6%, Beijing +16%, Shanghai +25%.
- US TsySec Lew – No one-size-fits-all approach to growth
- US February net capital inflow $33.5 bln, China and Japan securities holdings up, foreign buying of US Treasuries first in three months.
- Sources - ECB not aiming to weaken EUR against USD
- ECB/Austria CB Nowotny – No concessions to London in case of Brexit
- SNB Chair Jordan – Finance chiefs support Swiss negative rates
- Australia March ABS new vehicle sales +2.2% m/m, largest in 5 mos, +4.2% y/y.
- New Zealand Q1 CPI +0.2% q/q, +0.4% y/y, +0.1% and +0.4% eyed, as projected by RBNZ.
- Brazil Congress backs impeachment proceedings again Pres Rousseff – media.
Economic Data Ahead
- (1000 ET/1400 GMT) US Apr NAHB housing market index, 59.0 eyed; last 58.0.
- (1230 ET/1630 GMT) Minny Fed Kashkari speech in Minneapolis.
- (1900 ET/2300 GMT) Boston Fed Rosengeren lecture in New Britain, Connecticut.
Key Events Ahead
- (0540 ET/0940 GMT) Netherlands E1-2 bln 3 and 6-month DTC auctions.
- (0600 ET/1000 GMT) Belgium E2.5-3.5 bln 4.25/1.0/1.0/5.0% 2021/26/31/35 OLO auctions.
- (0830 ET/1230 GMT) Canada international securities transactions data.
- (0855 ET/1255 GMT) France E3-3.4/1.3-1.7/1-1.4 bln 3/6/12-month BTF note auctions.
FX Beat
USD: The greenback skidded to a low of 107.83 yen while gained 1.1 percent against the Canadian dollar to C$1.2985. Against a basket of currencies, the dollar index was steady at 94.730, having slumped 0.2 percent on Friday.
EUR/USD: The euro rose to a high of 1.1306, before reversing gains to trade in a lower range bound around 1.1282. Traders will remain cautious on the pair as the ECB is scheduled to announce its interest rate decision ahead in the week. Later in the day, markets will focus on FOMC member Dudley’s speech, as economic calendar remains data empty in the eurozone.
Immediate support is located at 1.1245 (Previous Session Low), break below will drag the pair to 1.1233. While on the upside, resistance is seen at 1.1343 (10-DMA).
USD/JPY: The Japanese yen gained against the U.S. dollar as major oil producers failed to agree on a output freeze, sending oil prices sharply lower along with the Asian indices. Risk -off
sentiment strengthened the demand for safe-haven yen, sending the pair below 108 level, The major trades 0.6 percent lower at 108.08, having touched a low of 107.83 earlier in the session. Recovery will remain fragile, as markets continue to absorb the disappointing Doha meeting results. Immediate support is located at 107.83 (Session Low), while resistance is
seen at 108.81 (5-DMA).
GBP/USD: Sterling trades 0.1 percent lower at 1.4169, after rising to a high of 1.4241 in the previous session. Traders continue to wary on Britain's vote to leave the European Union at a referendum on June 23, for which the official campaign begins on Friday. Major banks expect sterling could lose around a fifth of its value if Britain votes to leave. The pair continues slide, hovering towards session low of 1.4162. Immediate support is located at 1.4132 (Previous Session Low), break below could drag the pair to 1.4090 (Apr 14 Low). While resistance is seen at
1.4207 (20-DMA).
AUD/USD: The Australian dollar skidded around 1 percent to a low of 0.7631, from a near 10-month peak of 0.7735 touched on Friday after a meeting of oil exporters hoping to freeze oil output disappointed market sentiments. The Aussie gained 2.4 percent last week, in part following upbeat economic data both at home and in China, Australia's top export market. Immediate support is seen at 0.7620 (10-DMA), while resistance is located at 0.7683 (5-DMA).
NZD/USD: The New Zealand dollar was steady around 0.6920, rising back from a low of 0.6843 as higher-than-expected inflation data pushed back anticipated rate cuts. Consumer price index had risen 0.2 percent in the first quarter, surpassing market expectations of 0.1 percent rise. Markets anticipated that a weak inflation data might narrow the odds of a cut in
interest rates at the Reserve Bank of New Zealand's policy meeting next week. Resistance is located at 0.6952 (Apr 13 high), while on the downside, support is seen at 0.6825 (20-DMA).
USD/CNY: The yuan edged lower despite the PBoC set the midpoint rate at 6.4787 per dollar prior to market open, 0.19 percent firmer than the previous fix of 6.4908. The weakness in the yuan comes as robust corporate dollar demand, strengthened the dollar. The spot market opened at 6.4770 per dollar and was trading at 6.4885 at midday, easing 0.12 percent from the previous close. While the offshore yuan was trading 0.15 percent softer than onshore spot at 6.491 per dollar.
Equities Recap
Asian shares were dragged down by tumbling crude oil futures after oil producers' talks failed to agree a plan to restrain the global supply glut.
MSCI's broadest index of Asia-Pacific shares outside Japan was 0.9 percent lower, pulling away from a five-month intraday high touched on Friday.
Tokyo's Nikkei slumped 3.40 pct at 16,275.95 as investors and companies assessed the impact of devastating earthquakes in southwestern Japan on manufacturers' supply chains.
Australia's S&P/ASX 200 index ended down 0.36 pct at 5,138.80 points, while Seoul shares unofficially closed down 0.33 pct. Taiwan stocks lost 0.4 pct at 8,666.01 points.
Commodities Recap
Gold gained on dissapointing Doha meeting outcome, further aiding the safe haven demand for bullion. Spot gold rose to a session high of $1,239.41 an ounce, before giving up gains to trade
flat at $1,235 by 0608 GMT. U.S. gold futures climbed 0.4 percent to $1,239.70.
Oil prices tumbled nearly 7 percent after a meeting by major producers in Qatar failed to agree on to hold output. International benchmark Brent crude futures were trading at $41.14 per barrel at 0610 GMT, while U.S. crude futures were down 5.7 percent at $38.06 a barrel.
Treasuries Recap
The U.S. 10-yen treasuries tield stood at 1.7273 down by 0.025 bps.
BOJ offers to lend Y2 trillion of JGBs on spot basis through 4/19 as a secondary source of JGBs.
Australian government bond futures bounced, with the 3-year bond contract up 4 ticks at 98.080. The 10-year contract gained 6.5 ticks to 97.5100, while the 20-year contract added 6 ticks to 96.9300.
New Zealand government bonds gained amid the general risk-off mood, sending yields 3 basis points lower along the curve.
