Market Roundup
- GBP/JPY third consecutive daily bounce-153.45-155.50
- EUR/USD 65-point range above 1.1400
- USD/JPY plays 107.87 to 108.41
- GBP/USD trades towards 1.4348 high into NY vs 1.4227 low
- Germany Mar final CPI +0.3% y/y vs 0.3% previous, 0.3% exp
- Germany Mar W/Sales PX idx -2.6% y/y vs -1.9% previous
- UK Mar CPI +0.5% y/y vs 0.3% previous, 0.4% exp
- UK Mar Core CPI +1.5% y/y vs 1.2%
- FX fluctuations hit more N. American firms’ earnings
- Japan FinMin Aso – Will act vs FX moves as needed if spec gets out of hand
- Aso-wants G20 FX debate, excess volatility-disorderly moves hurt stability
- Japan: Sent Tankan-ing, econ data tells a spotty story; mkts, a worrying one
- Institutional investors are too hedged to slow rising yen – Nikkei
- Australia Mar NAB bus cond idx +12, conf +6, Feb +8, +3, conditions best in 8-yrs
Economic Data Ahead
- (0830 ET/1230 GMT) The U.S. import prices are likely to have increased 1.0 percent in March for the first time in eight months after decreasing 0.3 percent in February. While export prices are expected to have declined 0.2 percent in March, after posting a drop of 0.4 percent in February.
- (1400 ET/1800 GMT) The U.S. Treasury Department issues the budget report for the month of March.
- (1630 ET/2030 GMT) API reports its weekly crude oil stocks.
- (1800 ET/2200 GMT) Chile's central bank will announce its benchmark interest rate and the central bank is expected to keep it unchanged at 3.5 percent.
- (1845 ET/2245 GMT) The Statistics New Zealand will release Food Price Index (FPI) for the month of March. The index declined 0.6 percent in the prior month.
Key Events Ahead
- (0900 ET/1300 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker's speech.
- (1500 ET/1900 GMT) Federal Reserve Bank of San Francisco President John Williams speaks on U.S. monetary policy and the global economic outlook before the Lendlt USA 2016 Conference in San Francisco.
- (1600 ET/2000 GMT) Federal Reserve Bank of Richmond President Jeffrey Lacker speaks on "Economic Leadership in an Uncertain World" before the Chancellor's Distinguished Lecture Series sponsored by the University of North Carolina Wilmington's Cameron School of Business, in Wilimington.
FX Beat
USD: The dollar index declined to as low as 93.627, its weakest since late August as a rise in oil prices whetted investors' appetite for riskier assets across financial markets.
EUR/USD: The euro edged down to 1.1385 after hitting a 6-month high of 1.1465 earlier in the session. The pair has broken major resistance 1.1450. On the higher side any break above 1.1450 will take it till 1.1500/1.1545 in short term. The minor resistance is around 1.14380, while minor weakness can be seen only if it breaks below 1.13800. Any break below 1.13800 will drag it to lower level till 1.1320/1.1280/1.1200
USD/JPY: The Japanese yen lost ground against the U.S. dollar, after touching a 1-1/2-year high in the previous session. The greenback trades around 108.37, 0.46 percent up for the day. 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 major resistance is around 110 and break above targets 111.25/112, while the minor resistance is around 109.25.
GBP/USD: The sterling rose above 1.4300 to hit its highest in more than a week after inflation figures in Britain rose at a faster than expected pace in March. Consumer prices rose 0.5 percent surpassing market expectations of 0.4 percent annual rise and a 0.3 percent increase in February. Sterling rose about half a percent after the data to 1.4347, its highest since April 4. It is on track for three successive days of gains and is up 2.2 percent from a low of $1.4006 struck on April 6. The euro gave up earlier gains against the pound to trade 0.1 percent down on the day, falling to 80.08 pence, from 81.21 before the data. Cable faces major support around 1.4250. Any break below 1.4250 will drag the pair down till 1.4170/1.4100. On the higher side major resistance is around 1.4350 and break above targets 1.4380/1.4400 level. Major trend reversal can happen only below 1.4000. Overall bearish invalidation is only if it closes above 1.4400.
USD/CHF: The Swiss franc trades 0.15 percent lower at 0.9554, having touched a high of 0.9498 against its U.S. counterpart. Intraday bullishness can be seen only above 0.9580 level. Any indicative break above 0.9580 will take the pair till 0.9630/0.9680. On the lower side break below 0.9500 will drag it down till 0.9480/0.9420/0.9390. Overall bearish invalidation can happen only above 0.9800.
AUD/USD: The Australian dollar rose to 0.7671, from $0.7592 early, nearing a 9-month peak of $0.7723 touched late March. The Aussie was boosted after Australian firms across most industries saw improving conditions in March, lifting an index of activity to its highest in eight years. The Aussie trades around 0.7664, having broken major resistance 0.7650 and jumped till 0.76718. The short term trend is slightly bullish as long as support 0.7570 holds. On the higher side major resistance is around 0.7650 and break above targets 0.7680/0.7725. The minor support is around 0.7570 and break below will drag the pair till 0.7400/0.7380.
NZD/USD: The New Zealand dollars rose to 0.6917 from a low of 0.6792 struck on Monday. The kiwi continues to rise for the third successive session, drifting away from a low of 0.6762 touched last week. Traders are likely to remain bullish continuing previous three sessions trend. Immediate resistance is located at 0.6937 (Apr 1 High), while support is seen at 0.6833 (5-DMA).
Equities Recap
European shares edged lower on the back of downbeat first batch of corporate results while oil prices held above $40 ahead of major producers meeting of to discuss freezing output.
Europe's FTSEurofirst 300 was lower 0.33 pct, Germany's DAX gained 0.5 pct, France's CAC nudged up 0.2 pct. while UK's FTSE was flat.
Tokyo's Nikkei gained 1.13 pct at 15,928.79. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.
Shanghai Composite index nudged down 0.3 pct at 3,023.65 points, while CSI300 index closed down 0.4 pct at 3,218.45 points. HK’s Hang Seng index edged up 0.3 pct at 20,504.44 points.
Commodities Recap
Oil reached a 2016 high above $43 a barrel, supported by hopes that an upcoming meeting of oil producers will agree steps to tackle a supply glut. Brent crude was up 50 cents at $43.31 a barrel at 1015 GMT and reaching a 2016 high of $43.55 earlier in the session. U.S. crude gained 39 cents to $40.75 a barrel.
Gold advanced to a 3-week peak on expectations the Federal Reserve would not raise U.S. interest rates soon and as the dollar traded close to its lowest in nearly eight months. Spot gold rose to $1,262.56 an ounce, its highest since March 18. However, it pared gains to trade down at $1,258.40 an ounce by 1019 GMT. U.S. gold futures climbed to a 3-week top of $1,261.90.
Treasuries Recap
The U.S.10-year treasuries yield stood at 1.743 percent versus previous close of 1.724 percent
German 10-year Bund yields were up 2 basis points on the day at 0.13 percent, having hit a 1-year low of 0.075 percent on Monday. Which was close to a record low of 0.05 percent hit last April. The 30-year German bond yields rose to 0.84 percent, up 4 basis points in line with their Dutch and French peers.
Japanese government bonds mostly edged higher as investors looked ahead to a sale of 30-year JGBs later this week. In the superlong zone, the 30-year JGB yield was flat at 0.400 percent, after earlier falling as low as 0.390 percent. The yield on the benchmark 10-year JGB fell half a basis point to minus 0.095 percent, after earlier dropping to minus 0.085 percent. The 10-year JGB futures prices ended up 0.08 point at 151.75. after trading in a relatively narrow 151.61-151.81 range.
British government bond futures extended losses by more than 10 ticks after the inflation data to hit their lowest level since April 4. 10-year government bond yields rose to their highest, touching 1.452 percent, up 6 basis points on the day as their yield premium over German Bunds widened by 1 basis point to 129 points.
Australian government bond futures were off 1-month highs, with the 3-year bond contract 5 ticks lower at 98.160. The 10-year contract fell 6 ticks to 97.5350, while the 20-year contract shed 3.5 ticks to 96.9700. New Zealand government bonds eased, sending yields around 3 basis points higher across the curve.
