Market Roundup
- EUR/USD 0.22%, USD/JPY 0.14%, GBP/USD 0.47%, EUR/GBP -0.27%
- DXY -0.22%, DAX 1.27%, FTSE 0.69%, Brent 1.45%, Gold -0.01%
- Unexpected bounce in China's factory activity, but Asia broadly weak
- EZ Mar Markit Mfg Final PMI, 47.5, 47.6 forecast, 47.6 previous
- EZ Mar HICP Flash YY, 1.4%, 1.5% forecast, 1.5% previous
- EZ Feb Unemployment Rate, 7.8%, 7.8% forecast, 7.8% previous
- DE Mar Markit/BME Mfg PMI, 44.1, 44.7 forecast, 44.7 previous
- GB Mar Markit/CIPS Mfg PMI, 55.1, 51.0 forecast, 52.0 previous, 52.1 revised
- Brexit in disarray: May under pressure to go for soft Brexit
- Brexit has cost Britain nearly 2.5 percent of GDP - Goldman Sachs
- FR Mar Markit Mfg PMI, 49.7, 49.8 forecast, 49.8 previous
- IT Mar Markit/IHS Mfg PMI, 47.4, 47.4 forecast, 47.7 previous
Economic Data Ahead
- (0830 ET/1230 GMT) US Feb Retail Sales Ex-Autos MM, 0.4% forecast, 0.9% previous
- (0830 ET/1230 GMT) US Feb Retail Sales MM, 0.3% forecast, 0.2% previous
- (0930 ET/1330 GMT) CA Mar Markit Mfg PMI SA, 52.6 previous
- (0945 ET/1345 GMT) US Mar Markit Mfg PMI Final, 52.5 previous
- (1000 ET/1400 GMT) US Jan Business Inventories MM, 0.3% forecast, 0.6% previous
- (1000 ET/1400 GMT) US Mar ISM Manufacturing PMI, 54.2 forecast, 54.2 previous
Key Events Ahead
- N/A UK parliament is due to vote on Brexit alternatives
- (0900 ET/1300 GMT) ECB's Luis de Guindos presents the ECB's annual report for 2018 in Brussels
- (1510 ET/1910 GMT) BoC's Stephen Poloz speaks at Baffin Regional Chamber of Commerce and Nunavut Mining Symposium in Iqaluit, Canada.
FX Beat
DXY: DXY halted its 10 days winning streak and lost nearly 30 pips from the high of 97.34 made on Friday. The near term support is around 96.77 (20- day MA) and any violation below will take the index to next level till 96.55 (55- day EMA)/96.36. On the higher side, near term resistance is at 97.40 and any break above continues to reach 97.71 high made on Mar 7.
EUR/USD: EURUSD consolidating in narrow range after hitting low of 1.12100. The pair edged higher after better than expected Chinese PMI data and trade optimism over progress of trade talks between US and China. The yield spread between US and German 10 year has slightly widened from 241 basis point to 248 basis point. On the lower side near term support is around 1.11760 and any violation below will drag the pair till 1.1100. The near term resistance is around 1.12500 and any convincing break above targets 1.13000 (200- H MA)/1.3350/1.3381 .
USD/JPY: USD/JPY opened the week's trade with a bullish gap-up, hit session highs at 111.18 before paring some gains to currently trade around 111 handle. The major buoyed by risk-on in the markets on hopes that the United States and China would reach an agreement on trade as early as this month. Technical indicators are biased higher. RSI above 50, bias higher. Stochs show bullish momentum. Price action has bounced off daily cloud and is currently hovering around 110-EMA. Decisive break above eyes 200-DMA at 111.45. Breakout at 200-DMA could see test of 76.4% Fib at 112.21. Break below cloud negates any near-term upside.
GBP/USD: Cable buoyed after big UK manufacturing PMI beat. UK manufacturing PMI unexpectedly rebounds to 13-month highs of 55.1 in March. The pair is extending gains above 1.31 handle, was trading at 1.3117, up 0.64% at 1200 GMT. Price action has bounced off 200-DMA support on Friday's trade and we see weakness only on break below. 21-EMA at 1.3143 is immediate resistance. Break above will see further upside.
AUD/USD: AUD/USD opened with a bullish gap open after positive Chinese data buoyed sentiment. But the pair is struggling to extend gains, is trading in a narrow with with a Doji formation on the daily candle. Major trend in the pair is bearish. Immediate support lies at 5-DMA at 0.7101. Break below eyes 20-DMA at 0.7084. Next major resistance lies at 100-DMA at 0.7153. Break above targets trendline resistance at 0.7180.
EUR/JPY: EUR/JPY upside pauses shy of cloud top resistance at 124.97. The single currency was buoyed following upbeat China factory data and signs of progress in U.S.-China trade talks. But dismal eurozone CPI and PMIs keep lid on gains. Eurozone flash CPI arrived at 1.4% y/y in March, missing estimates. The pair has bounced off trendline support and has edged above 5-DMA. Break above 200H SMA eyes 20-DMA at 125.38 ahead of 100-DMA at 126.15. Break below cloud negates any bullish bias.
Equities Recap
European markets rally following upbeat China factory data and signs of progress in U.S.-China trade talks. At 1130 GMT, the pan-European STOXX 600 index was up 0.90 percent at 382.48 points, while the FTSEurofirst 300 index rose 0.81 percent to 1,496.31 points.
Britain's FTSE 100 trades 0.65 percent up at 7,326.36 points, while mid-cap FTSE 250 up 0.14 percent to 19,143.75 points.
Germany's DAX gained 1.13 percent to 11,656.29 points; France's CAC 40 trades 0.69 percent higher at 5,387.61 points.
Commodities Recap
Oil markets extended gains on supply worries. Brent crude for June delivery was up by 64 cents, or 1 percent, at $68.22 a barrel by 0606 GMT. U.S. West Texas Intermediate (WTI) futures rose 43 cents, or 0.7 percent, to $60.57 barrel.
Gold edges lower on rising risk appetite but downside was capped owing to weak USD. Spot gold was down 0.08 percent at $1,290.90 per ounce by 1130 GMT, after touching its lowest since March 8 at $1,286.35 on Friday. U.S. gold futures fell 0.2 percent to $1,295.80 an ounce.
Among other precious metals, spot palladium was down 0.5 percent at $1,377.21 an ounce, silver was down 0.6 percent at $15.05 an ounce, while platinum fell 0.1 percent to $844.35 an ounce.
Treasuries Recap
U.S.: The U.S. Treasuries plunged during afternoon session Monday, ahead of the country’s retail sales data for the month of February and ISM manufacturing PMI for the month of March, both scheduled to be released later today. The yield on the benchmark 10-year Treasury yield jumped 3 basis points to 2.444 percent, the super-long 30-year bond yields surged 3 basis points to 2.849 percent and the yield on the short-term 2-year traded 1-1/2 basis points higher at 2.290 percent.
UK: The United Kingdom’s gilts during Monday’s afternoon session, after the country’s manufacturing PMI for the month of March cheered market investors ahead of the 5-year auction, scheduled to be held on April 2 by 09:45GMT. The yield on the benchmark 10-year gilts, rose 1-1/2 basis points to 1.013 percent, the super-long 30-year bond yields also surged 1-1/2 basis points to 1.568 percent and the yield on the short-term 2-year traded 1 basis point up at 0.646 percent.
EUR: The German bunds fell during European session Monday even after the country’s manufacturing PMI for the month of March came in lower than market expectations, coupled with eurozone’s consumer price inflation for the similar period, which also disappointed market expectations. The German 10-year bond yields, which move inversely to its price, jumped 2 basis points to -0.047 percent, the yield on 30-year note surged nearly 3 basis points to 0.604 percent and the yield on short-term 2-year traded tad higher at -0.608 percent
JGBs: The Japanese government bonds closed lower at the start of trading week Monday ahead of the country’s 10-year and 30-year auctions, scheduled to be held on April 3 and 4 by 03:45GMT respectively amid a muted trading week that is scheduled to witness no data of extreme economic significance. The yield on the benchmark 10-year JGB note, which moves inversely to its price, rose up to -0.075 percent, the yield on the long-term 30-year edged higher to 0.521 percent and the yield on short-term 2-year too traded tad up at -0.170 percent.
