Market Roundup
- EUR/USD 0.12%, USD/JPY -0.10%, GBP/USD 0.09%, EUR/GBP 0.03%
- DXY 0.01%, DAX 0.23%, FTSE 0.21%, Brent 0.70%, Gold -0.04%
- ECB expected to take confident tone despite slowing economy
- Germany May GfK Consumer Sentiment, 10.8, 10.8% forecast, 10.9% previous
- Great Britain Mar UK Finance Mortgage Approvals, 37.567k, 38.120k previous, 38.035k revised
- Great Britain Apr CBI Distributive Trades, -2, 5 forecast, -8 previous
- British PM May feels more heat over EU's customs union
- German economic growth to bounce back in second quarter – DIW
- Spain's unemployment rate rises slightly in first quarter
Economic Data Ahead
- (0745 ET/1145 GMT) The European Central Bank will announce its interest rate decision.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have decreased by 2,000 to a seasonally adjusted 230,000 for the week ended Apr. 21, while continuing claims for the week ended Apr. 14 is expected to decline to 1.850 million from a previous reading of 1.863 million.
- (0830 ET/1230 GMT) The U.S. Census Bureau is likely to report that preliminary wholesale inventories rose 0.7 percent in March after posting a gain of 1.0 percent in February.
- (0830 ET/1230 GMT) The United States releases goods trade balance data for the month of March. The economy recorded a trade deficit of $75.9 billion in the previous month.
- (0830 ET/1230 GMT) The U.S. durable goods orders are expected to have increased 1.6 percent in March after rising 3.0 percent in February, while non-defense capital goods orders excluding aircraft are likely to have risen 0.6 percent after gaining 1.4 percent the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending April 20.
- (1100 ET/1500 GMT) Federal Reserve Bank of Kansas City issues manufacturing activity index for the month of April. The indicator stood at 17 in the previous month.
- N/A Bank of Mexico publishes the minutes of its latest monetary policy meeting.
Key Events Ahead
- (0830 ET/1230 GMT) European Central Bank President Draghi and Vice President Vitor Constancio releases the monetary policy statement and gives a press conference.
FX Beat
DXY: The dollar index eased from a 3-1/2 month high hit earlier in the session, as the U.S. Treasury yields stalled, while investors awaited the U.S. GDP figures due on Friday that could provide fresh clues on the strength of the economy. The greenback against a basket of currencies trades 0.1 percent down at 91.18, having touched a high of 91.32, its highest since Jan. 12. FxWirePro's Hourly Dollar Strength Index stood at 61.99 (Bullish) by 1000 GMT.
EUR/USD: The euro retreated from a near 2-month low as the European Central Bank is set to keep policy unchanged at its monetary meeting. However, expectations that the ECB President Draghi would deliver downbeat remarks on the Eurozone economic outlook limited the upside in the major. The European currency traded 0.2 percent up at 1.2178, having touched a low of 1.2156 earlier, its lowest since Mar. 1. FxWirePro's Hourly Euro Strength Index stood at -12.04 (Neutral) by 1000 GMT. Immediate resistance is located at 1.2246 (5-DMA), a break above targets 1.2290 (Apr. 6 High). On the downside, support is seen at 1.2154 (Mar. 1 Low), a break below could drag it lower 1.2100.
USD/JPY: The dollar declined after rallying to an 11-week peak earlier on the back of higher U.S. Treasury yields. Investors now eye Friday's Bank of Japan interest rate decision and the U.S. GDP expectations for further clues on the major. The major was trading 0.1 percent down at 109.31, having hit a high of 109.46 earlier, its highest since Feb. 8. FxWirePro's Hourly Yen Strength Index stood at -93.26 (Slightly Bearish) by 1000 GMT. Investors’ will continue to track broad-based market sentiment, ahead of the U.S. unemployment benefit claims, wholesale inventories, good trade balance and durable goods orders. Immediate resistance is located at 109.75 (Feb. 1 High), a break above targets 110.28 (Feb. 2 High). On the downside, support is seen at 108.38 (5-DMA), a break below could take it lower 107.78 (10- DMA).
GBP/USD: Sterling slumped to a 1-1/2 month low as investors grew wary about the outlook for the British economy ahead Bank of England meeting next month. Markets are split over whether the BoE will raise interest rates after Governor Mark Carney dented rate hike expectations. The major traded 0.1 percent up at 1.3940, having hit a low of 1.3895 earlier, it’s lowest since Mar. 16. FxWirePro's Hourly Sterling Strength Index stood at 114.61 (Highly Bullish) by 1000 GMT. Immediate resistance is located at 1.4031 (Apr. 23 High), a break above could take it near 1.4110 (21-DMA). On the downside, support is seen at 1.3874 (Mar. 13 Low), a break below targets 1.3788 (Mar. 9 Low). Against the euro, the pound was trading 0.05 percent down at 87.33 pence, having hit a high of 87.27 pence on Wednesday, it’s highest since Apr. 19.
USD/CHF: The Swiss franc declined, extending losses for the eighth straight session as the greenback steadied near multi-month peaks after the 10-year U.S. Treasury yield reached 3 percent for the first time since 2014. The major trades 0.1 percent up at 0.9839, having touched a high of 0.9848 earlier, it’s highest since Dec. 28. FxWirePro's Hourly Swiss Franc Strength Index stood at -52.85 (Bearish) by 1000 GMT. On the higher side, near-term resistance is around 0.9863 (Dec. 28 High) and any break above will take the pair to next level till 0.9915 (Dec. 26 High). The near-term support is around 0.9772 (5-DMA) and any close below that level will drag it till 0.9705 (10-DMA).
Equities Recap
European shares advanced, boosted by upbeat corporate results and a recovery among industrials stocks, while the sterling slumped to multi-week lows as markets were split over whether the central bank will hike interest rates.
The pan-European STOXX 600 index surged 0.4 percent at 381.51 points, while the FTSEurofirst 300 index rallied 0.4 percent to 1,564.40 points.
Britain's FTSE 100 trades 0.2 percent up at 7,391.68 points, while mid-cap FTSE 250 gained 0.4 percent to 20,090.19 points.
Germany's DAX rose 0.2 percent at 12,440.50 points; France's CAC 40 trades 0.5 percent higher at 5,438.63 points.
Commodities Recap
Crude oil prices rallied, bolstered by expectations the United States will re-impose sanctions against Iran and a fall in output in Venezuela. International benchmark Brent crude was trading 0.8 percent up at $74.58 per barrel by 0926 GMT, having hit a high of $75.44 on Tuesday, its highest since Nov. 2014. U.S. West Texas Intermediate was trading 0.8 percent up at $68.50 a barrel, after rising as high as $69.53 last week, its highest since Nov. 2014.
Gold prices declined and were hovering towards a 5-week low hit in the previous session, weighed down by a stronger dollar and a surge in U.S. Treasury yields. Spot gold was 0.1 percent down at $1,322.25 per ounce at 0928 GMT, having hit a low of $1,318.69 an ounce on Wednesday, its lowest since March 21. U.S. gold futures rose 0.3 percent to $1,326.2 an ounce.
Treasuries Recap
The U.S. 10-year Treasury yield hovered around the 3.00 mark during the late European session, albeit remaining on the downside ahead of today’s initial jobless claims data and the 7-year note auction, also due today by 17:00GMT. The yield on the benchmark 10-year Treasuries slumped 2 basis points to 3.00 percent, the super-long 30-year bond yields also plunged nearly 2 basis points to 3.19 percent and the yield on the short-term 2-year traded nearly 1 basis point lower at 2.48 percent.
The German bunds climbed Thursday after the country’s GfK consumer climate index for the month of May disappointed market expectations, while investors remain keen to watch the European Central Bank’s (ECB) monetary policy decision, scheduled to be unveiled today by 11:45GMT. The German 10-year bond yields, which move inversely to its price, jumped 1-1/2 basis points to 0.64 percent, the yield on 30-year note remained flat at 1.29 percent and the yield on short-term 2-year traded 1/2 basis point higher at -0.53 percent.
The Japanese 10-year government bond yield climbed to over 7-week high during late Asian session after the United States counterpart breached the 3.00 psychological mark overnight, owing to rising expectations of higher inflationary pressures and hopes of a faster pace of interest rate hikes by the Federal Reserve this year. The yield on the benchmark 10-year Treasury note, which moves inversely to its price, rose nearly 1 basis point to 0.06 percent, the yield on the long-term 30-year note jumped nearly 2 basis points to 0.76 percent and the yield on short-term 2-year hovered around 1 basis point to trade at -0.12 percent.
The Australian government bonds slumped following heavy sell-off in the U.S. Treasuries, pushing the U.S. 10-year Note yield above 3 percent mark for the first time in 4-1/2 years. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, rose 3-1/2 basis points to 2.879 percent, the yield on the long-term 30-year Note also surged 3 basis points to 3.443 percent and the yield on short-term 2-year up over 1 basis point to 2.124 percent.
