Market Roundup
- Yen weakness sees USD/JPY up 0.7% to 109.30 , GBP/JPY +0.4% to 155.62
- DAX up 2.3%, Brent -1.1%, DXY +0.5%, EUR/USD -0.7%, USD/JPY +0.7%
- UK BoE-Lenders say plan to expand business lending at slowest since Q1 2012
- UK Top Tory donors in GBP5mln push for Brexit- Telegraph
- EZ Feb Ind. Prod. y/y vs 2.8% previous, 1.2% exp
- US Tsy off’l – To push G20, IMF members on currency, infrastructure issues
- Japan, US look split over currency policy heading into G20 – Nikkei
- IMF/ex-MoF Furusawa – Limits to BoJ NIRP policy
- Furrusawa - JPY rises haven’t deviated sharply from IMF view
- Deals can help Japan’s banks offset dollar drought
- OECD’s Gurria urges G7 to coordinate fiscal spending boost
- China March $29.86 bln trade surplus, $30.85 bln eyed, exports +11.5% y/y
- Australia April Westpac/MI consumer confidence -4.0% to 95.1, -1.1% y/y
Economic Data Preview
- (0830 ET/1230 GMT) The U.S. Census Bureau is expected to report that consumer spending regained momentum in March as households increased purchase of a range of goods. According to a Reuters survey of economists, retail sales excluding automobiles, gasoline, building materials and food services gained 0.3 percent in March after staying flat in the prior month.
- (0830 ET/1230 GMT) The U.S. Labor Department's Producer Price Index is likely to have rose 0.2 percent in March after declining 0.2 percent in February.
- (1000 ET/1400 GMT) The U.S. Commerce Department will release business inventories figures, which are expected to have decreased 0.1 percent in February after rising 0.1 percent in January.
- (1000 ET/1400 GMT) The Bank of Canada will announce its benchmark interest rate and the central bank is widely expected to hold interest rates at 0.5 percent.
- (1030 ET/1430 GMT) The Energy Information Administration reports its Crude Oil Stocks for the week ending April 8.
- (1400 ET/1800 GMT) The Federal Reserve issues its "Beige Book".
- (1830 ET/2230 GMT) The Business New Zealand will release its PMI index for the month of March. The index stood at 56 in the month of February.
- (1901 ET/2301 GMT) The Royal Institution of Chartered Surveyors will report Britain's Housing Price Balance for the month March. The indicator is expected to have edge down 49% from 50% in the previous month.
Key Events Ahead
- (1115 ET/1515 GMT) Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins will hold a press conference following the bank's rate decision and the release of the monetary policy report.
- N/A International Monetary Fund Managing Director Christine Lagarde gives opening remarks at the conference titled "Low-Income Developing Countries: Conference on Sustainable Economic Development in a Challenging Global Environment."
- N/A The World Bank holds "Chief Economists Roundtable: Growth and Inclusion in Turbulent Times."
- N/A The U.S. Treasury Deputy Secretary Sarah Bloom Raskin speaks before the Committee for Economic Development 2016 Spring Policy Conference, in Washington.
FX Beat
USD: The dollar rose as high as $1.1298 per euro, its strongest in a week, before settling at $1.1305. The dollar index against a basket of currencies was 0.5 percent up at 94.580.
EUR/USD: The euro edged down 0.6 percent to 1.1305, having gone as high as 1.1464 in the previous session. The pair failed to sustain a new 2016 high after eurozne industrial production declined 0.8 percent m/m as compared to previous gain of 1.9 percent m/m. It has broken major support 1.1320 which confirms minor trend reversal , decline till 1.1200/1.1180 is possible. Minor bullishness can be seen only above 1.1400 and break above targets 1.14380/1.1460. In the data space US will release retail sales and PPI today at 12:30 GMT .
USD/JPY: The yen was down 0.6 percent at 109.24 against the dollar, having stalled at its strongest in 17 months, 107.61 yen, on Monday. The pair has broken minor resistance at 109.10 and jumped till 109.39. The short term trend is slightly bearish as long as resistance 110 holds. On the lower side any break below 107.60 will drag the pair down till 106.5/105. The minor support is around 108.40/108. The major resistance is around 110 and break above targets 111.25/112.
GBP/USD: The sterling extended its previous day's losses after an opinion poll showed that the "Out" campaign in front ahead of a June referendum on whether Britain should remain in the EU. It was trading down at $1.4253, well below a 1-week high of $1.4347 struck in the previous session after data showed British inflation increased in March. The euro was steady at 79.81 pence, while the pound has lost more than 7 percent this year on a trade-weighted basis and reached a 2-1/2-year low last week, on worries over the Brexit vote. Intraday trend is slightly bullish as long as support 1.4185 holds. Any break below 1.4185 will drag the pair down till 1.4100/1.4040. Overall bullish invalidation is only below 1.4000. On the higher side resistance is around 1.4280 and break above targets 1.4320/1.4350. The pair should close above 1.4400 for further upside.
USD/CHF: The Swiss franc trades 0.9 percent at 0.9630 lower against the dollar, after having touched a high of 0.9498 in the previous session. The short term bullishness can be seen only above 0.9630 level. Any indicative break above 0.9630 will take it till 0.9680/0.9725. On the lower side break below will drag the pair down till 0.9480/0.9420/0.9390. The minor support is around 0.9580/0.9530. Overall bearish invalidation can happen only above 0.9800.
AUD/USD: The Australian dollar edged back to 0.7658, after having powered up 1.1 percent on Tuesday and nearing the 2016 peak of 0.7723 set a few weeks ago. The Aussie had already been buoyed by a near 5 percent rise in price of iron ore, Australia's top export earner. The short term trend is slightly bullish as long as support 0.7570 holds. On the higher side major resistance is around 0.7725 and break above targets 0.7750/0.7780. The minor support is around 0.7570 and break below will drag the pair till 0.7400/0.7380.
NZD/USD: The New Zealand dollar rose to 0.6928, from 0.6852 the previous day, however, it failed to hold its ground, edging slightly lower to 0.6907. The kiwi hovered near a 10-month peak, after upbeat Chinese export data and a rally in commodity prices underpinned appetite for risk assets. Immediate support is located at 0.6851 (5-DMA), while on the upside, resistance is seen at 0.6966 (Apr 1 High).
Equities Recap
Global stocks rose after unexpected upbeat Chinese trade data strengthened investors sentiments, fuelling risk appetite.
Europe's FTSEuroFirst index of leading 300 shares rose 1.4 percent at a 2-week high of 1,334 points , Germany's DAX and France's CAC 40 were both up 1.8 percent and Britain's FTSE 100 gained 1.1 percent.
Tokyo's Nikkei gained 2.84 pct at 16,381.22, its biggest daily gain in six weeks. MSCI's broadest index of Asia-Pacific shares outside Japan added 1.5 percent, its sixth straight gain.
Shanghai Composite index closed up 1.4 pct at 3,066.64 points, while CSI300 index ended up 1.3 pct at 3,261.38 points. HK’s Hang Seng index rose 3.2 pct at 21,158.71 points
Commodities Recap
Oil futures traded lower on concerns that a producer meeting, planned for Sunday in Doha to discuss freezing output, will do little to trim oversupply and a strengthening dollar. Brent crude was down 27 cents at $44.35 a barrel at 1051 GMT, after hitting a 4-month high in the previous session. U.S. crude declined by 49 cents to $41.68 a barrel after gaining $1.81 the day before.
Gold declined from a 3-week high as the dollar regained some ground from the yen and equities traded higher, hampering the metal's safe-haven appeal. Spot gold was down 1.0 percent at $1,242.49 an ounce as of 1053 GMT, after earlier hitting a session low of $1,241.33.
Treasuries Recap
The U.S. 10-year treasuries yield at stood 1.791 percent up by 0.011 bps.
The German bonds gained as International Monetary Fund and German leading economic institute cuts 2016 economic growth outlook. The yield on the benchmark 10-year Treasury note moved down 3.75 pct to 0.155 pct and the yield on the 3-year Treasury bond dipped 1.32 pct to -0.511 pct.
Greek 2-year yields rose 54 basis points to 11.57 percent, up more than 100 basis points from levels seen after the IMF potrayed a grave outlook for its economy and renewed calls for its reluctant EU partners to grant substantial debt relief.
Japanese government bonds slipped modestly, as the Bank of Japan's purchases underpinned the JGB market. The yield on the benchmark 10-year JGB added 1.5 basis points to minus 0.085
percent. The 10-year JGB futures prices ended down 0.12 point at 151.63. The 30-year yield edged up half a basis point to 0.405 percent, ahead of Thursday's auction of 800 billion yen of 30-
year JGBs.
Gilts open 11 ticks lower than the settlement of 121.95 as core fixed income markets came under pressure from above forecast China trade data. The cash curve also offers some modest incentive with 10s/30s trading 2bp steeper than the last tap at around 90bp.
Australian government bond futures declined, with the 3-year bond contract off 4 ticks at 98.120. The 10-year contract dropped 6 ticks to 97.4800, while the 20-year contract shed 4.5 ticks to 96.9000. New Zealand government bonds eased, sending yields 5 basis points higher.
