Market Roundup
- NZD/USD up 1.1% as AUD/NZD profit taking a standout feature
- USD/JPY -0.26%, EUR/USD -0.08%, GBP/USD -0.3%
- DAX +0.15%, Brent -0.5%, DXY +0.04%, Nikkei +3.23%
- Switzerland Mar Prod/import prices -4.7% y/y vs -4.6% previous
- EZ final Mar CPI 0.0% y/y vs -0.1% previous, -0.1% exp
- UK You-Gov poll-In and out campaigns tied at 39%, 17% don’t no
- Swiss radio-Possibility SNB reintroducing new EUR/CHF floor on Brexit
- Finnish parliament to debate in fortnight whether to hold EUR referendum
- Fin Min Aso: Japan told US concerned about "1-sided" FX moves
- BoJ Gov Kuroda – BoJ hasn’t shifted policy focus on rates
- Kuroda: Does not think yen rise was caused by NIRP
- Suga: Cautious of one-sided FX moves, will take action if needed
- Kuroda-many ways to ease more if needed
Economic Data Preview
- (0830 ET/1230 GMT) The Canadian manufacturing sales are likely to have dropped by 1.5 percent in February, reversing some of the previous month's strong gain.
- N/A The industry group for Canadian real estate agents will release sales of existing homes figures for the month of March.
- (0915 ET/1315 GMT) The U.S. industrial production is expected to have declined 0.1 percent in March after posting a fall of 0.5 percent in February.
- (0915 ET/1315 GMT) The Federal Reserve Board is expected to report that capacity utilization edged down 75.4 percent in the month of March, from 76.7 percent in February.
- (1000 ET/1400 GMT) The University of Michigan releases its preliminary consumer sentiment index for the month of April. The index stood at 91 in the prior month.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events
- (1250 ET/1650 GMT) Federal Reserve Bank of Chicago President Charles Evans speaks on current economic conditions and monetary policy, before the J.P. Morgan Investment Seminar in Washington.
- N/A Central bankers and finance ministers gather for 2016 Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group.
- The World Bank's Jim Yong Kim participates in discussion on "Forced Displacement: A Global Development Challenge."
FX Beat
USD: The U.S. dollar started to ease back again, having made more than 1 percent against both the yen and the euro this week. Against a basket of currencies, the dollar index edged down about 0.1 percent to 94.80, however, up about 0.7 percent for the week.
EUR/USD: The euro edged up about 0.1 percent to 1.1275, having touched a 6-month high of 1.1465 on Tuesday, however, it is set to shed about 1.3 percent for the week. Intraday trend is slightly weak as long as resistance 1.1330 holds. On the lower side major support is around 1.11850 and break below will drag the pair till Mar 2016 low (1.1050). The minor support is around
1.1230/1.1200. Minor bullishness can be seen only above 1.1330 and break above targets 1.1380/1.1400/1.1460.
USD/JPY: The Japanese yen was steady at 108.92 yen per dollar, down from this week's more than 17-month high of 107.63, however, on track to gain 1.4 percent for the week. The pair has retreated after making a high of 109.73. The short term trend is slightly bearish as long as resistance 110 holds. On the lower side any break below 108.80 will drag the pair down till
108/107.60. The major resistance is around 110 and break above targets 111.25/112. The minor resistance is around 109.25
GBP/USD: Sterling was steady at 1.4189, however not far from recent lows, and vulnerable to fresh bouts of uncertainty over whether Britain will stay in the European Union. Sterling regained its ground after Bank of England policymakers voted unanimously to keep interest rates at a record low of 0.5 percent. It pulled away from a low of 1.4090 to close at 1.4150 in the previous session. The euro was flat at 79.50 pence, while trade-weighted sterling was at 84.3, having fallen to a 28-month low of 83.3 last week. Intraday trend is slightly weak as long as resistance 1.4220 holds. Any break above 1.4220 will take the pair up till 1.4260/1.4320. Overall bearish invalidation is only if it closes above 1.4400. On the lower side support is around
1.4090 and break below targets 1.4040/1.4000. The minor support is around 1.4170.
USD/CHF: The Swiss franc trades 0.1 percent lower at 0.9676 against the dollar, away from a high of 0.9498 touched on Tuesday. It lost nearly 1 percent for the week. The pair has slightly recovered after making a low of 0.9634. The short term trend is bullish as long as support 0.9630 holds. On the lower side break below 0.9630 will drag the pair down till 0.9575/0.9525. The resistance is at 0.9700 and break above will take the USD/CHF to next level at 0.9750/0.9800. Overall bearish invalidation can happen only above 0.9800.
AUD/USD: The Australian dollar rose to 0.7712, near a 10-month summit of 0.7737 touched on Thursday. The Aussie has gained more than 2 cents this week, strengthened by gains in key commodity prices. Aussie has recovered till 0.7734 after making a low of 0.7691. The short term trend is slightly bullish as long as support 0.7630 holds. On the higher side major resistance is around 0.7735 and break above targets 0.7750/0.7780. The major support is around 0.7630 and break below will drag the pair till 0.7570/0.7500. The minor support is at 0.7650.
NZD/USD: The New Zealand dollar rose 1.1 percent to 0.6914 after downbeat U.S. inflation decreased the prospects for another hike by the Federal Reserve. The kiwi reversed previous session losses after a run of encouraging data from China fortified risk appetite. Immediate resistance is located at 0.6952 (Apr 13 High), while on the downside, support is seen at 0.6817 (20 -DMA).
Equities Recap
European shares edge lower as investors were cautious ahead of oil producers' meeting at Doha on a potential output freeze.
Europe's FTSEurofirst 300 edged down 0.1 pct, Germany's DAX skidded 0.3 pct, France's CAC 40 nudged down 0.2 pct, while Britain's FTSE 100 gained 0.1 pct.
Tokyo's Nikkei lost 0.37 pct at 16,848.03. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent. That index has gained about 3.6 percent on the week during which it hit a 5-month high.
Shanghai Composite index and CSI300 index both edged down 0.1 pct at 3,078.12 points and 3,272.21 points, respectively. HK’s Hang Seng index also closed down 0.1 pct at 21,316.47 points.
Commodities Recap
Crude futures were steady in thin trade as investors were reluctant to take on new positions ahead of major oil exporters meeting at the weekend. Brent crude futures were at $43.12 a barrel at 1016 GMT, virtually unchanged from their last close. U.S. West Texas Intermediate futures were also almost unchanged, trading at $41.49.
Gold steadied after 3-days of declines, however, was heading for its first weekly drop in three as strength in the dollar and global equities curbed appetite for the safe-haven metal. Spot gold edged up 0.2 percent to $1,229.97 an ounce by 1018 GMT, following a drop of 1.3 percent in the previous session. It is down nearly 1 percent for the week.
Treasuries Recap
The 10-year U.S. treasury yield stood at 1.790 percent versus previous close of 1.781 percent.
The German Bunds gained as investors poured into safe-haven assets. Heavy European bonds redemption supported the bunds prices to move up. The benchmark 10-year bunds yield, fell 12.20 pct to 0.145 pct and 2-year bonds yield dipped 0.61 pct to -0.497 pct. Greek 2-year yields held around 12.22 percent, up more than 180 basis points on the week and their worst run since early February.
Japanese government bonds firmed, bolstered by the Bank of Japan's buying operations. The yield on the benchmark 10-year JGB fell 2 basis points to minus 0.115 percent , while 10-year JGB futures ended up 0.21 point at 151.89. In the superlong zone, the 30-year JGB yield fell 1 basis point to 0.390 percent.
Gilts were up, in line with Bunds and there is some scope for Gilts to outperform especially with the 10yr UK/Germany spread having held 130bp again this week.
Australian government bond futures extended losses, with the 3-year bond contract off 4 ticks at 98.040. The 10-year contract shed 2 ticks to 97.4600, while the 20-year contract lost 1.5 ticks to 96.8800. New Zealand government bonds gained, with yields moving 1 to 1.5 basis points lower across the curve.
