Market Roundup
- EUR/USD +0.1%, USD/JPY flat, GBP/USD -0.4%, DXY +0.2%
- DAX +0.4%, FTSE +0.1%, Brent flat, Gold -0.2%, Copper +0.2%
- GBP extends fall, slips below 1.2500 to 1.2491
- Get ready for higher interest rates, says ECB's Coeure
- EZ Feb Producer prices 0.0% m/m, 4.5% y/y vs previous 1.1%/3.9% revised 0.3%/4.3% forecast
- EZ Feb Unemployment rate 9.5% vs previous 9.6%. 9.5% forecast
- EZ Mar Markit Mfg final PMI 56.2 vs previous 56.2. 56.2 forecast
- Germany Mar Markit/BME Mfg PMI 58.3 vs previous 58.2. 58.3 forecast
- Great Britain Mar Markit/CIPS Mfg PMI 54.2 vs previous 54.6. 54.7 forecast
- Switzerland Feb Retail Sales 0.6% y/y vs previous -1.2% revised
- Switzerland Mar Manufacturing PMI 58.6 vs previous 57.8. Highest since Feb 2011
- Switzerland domestic sight deposits 475.149blb w/e Mar 31, down from previous 476.304
- EUR/CZK briefly back on familiar ground at 27.02: 27.045 into NY
- USD/ZAR extends 6-day run to 13.69 as political uncertainty drives flow from ZAR
Economic Data Ahead
- (0930 ET/1330 GMT) The RBC will release Canada's Manufacturing PMI for the month of March. The indicator stood at 54.7 in the prior month.
- (0945 ET/1345 GMT) Financial firm Markit releases U.S. Manufacturing PMI for the month of March. The index is likely to edge up to 53.5 from 53.4 in the previous month.
- (1000 ET/1400 GMT) The Institute for Supply Management (ISM) is expected to report that U.S. manufacturing Purchasing Managers' index was little changed at 57.7 in March from a reading of 57.7 in February.
- (1000 ET/1400 GMT) The Commerce Department is likely to report that U.S. construction spending increased 1.0 percent in February after declining 1.0 percent in the previous month.
- (1030 ET/1430 GMT) The Bank of Canada releases Business outlook survey.
- (1030 ET/1430 GMT) Mexico will release its Markit PMI data for the month of March.
- (1530 ET/1930 GMT) Autodata Corp is expected to report that U.S. auto sales figures dropped to an annualized rate of 17.50 million units in March from 17.58 million units in February.
Key Events Ahead
- (1030 ET/1430 GMT) Federal Reserve Bank of New York President William Dudley gives opening remarks and participates in panel before an economic briefing on household borrowing, student debt trends and homeownership hosted by the Federal Reserve Bank of New York, in New York.
- (1500 ET/1900 GMT) Philadelphia Fed chief Patrick Harker speaks on "Fintech" at the University of Pennsylvania School of Engineering and Applied Science's Technology, Business, and Government Lecture Series.
- (1530 ET/1930 GMT) FedTrade 30-year Fannie Mae/Freddie Mac securities (max $1.275 bn)
- (1700 ET/2100 GMT) Richmond Fed President Jeffrey Lacker delivers a lecture, "From 'Real Bills' to 'Too Big to Fail': H. Parker Willis and the Federal Reserve's First Century" at Washington & Lee University, in Lexington.
FX Beat
DXY: The dollar slightly edged up versus its major peers as investors await for Fed officials' speeches for more clarity on the strength of the U.S. economy and pace of future interest rate hikes. The greenback against a basket of currencies traded 0.05 percent up at 100.60, having hit a high of 100.65 on Friday, its highest since Mar. 16. FxWirePro's Hourly Dollar Strength Index stood at 33.89 (Neutral) by 1000 GMT.
EUR/USD: The euro tumbled to a near 3-week low earlier in the day as mixed Eurozone economic releases weighed on market sentiment. The economy's March manufacturing PMI reading came in at 56.2 in line with estimates, while the February PPI data missed forecasts. Meanwhile, the bloc’s unemployment rate steadied at 9.5 percent in Feb. The European currency traded 0.02 percent down at 1.0654, having touched a low of 1.0653, its lowest since Mar. 15. FxWirePro's Hourly Euro Strength Index stood at -152.04 (Highly Bearish) by 1000 GMT. On the lower side, any break below 1.0650 confirms minor weakness, a decline till 1.0600 (Mar 14 low) is possible. Any break below 1.0600 will drag it till 1.05250 (Mar 9 low). The near term resistance is around 1.07120 (23.6 retracement of 1.09058 and 1.06512) and any break above targets 1.07800 (200- H MA)/1.08300.
USD/JPY: The dollar declined towards the 111.00 handle as an improvement in Japan's Tankan Manufacturing Index for the first quarter of 2016 strengthened the Japanese Yen. Meanwhile, mild negative sentiment surrounding the greenback following Friday's comments from the New York Fed President William Dudley continued to weaken the bid tone around the major. The pair traded 0.03 percent down at 111.33, hovering away from a high of 112.19 touched on Friday, its highest since Mar. 21. FxWirePro's Hourly Yen Strength Index stood at 16.52 (Neutral) by 1000 GMT. On the higher side, any break above 112.20 (100- day EMA) will take the pair till 112.90 (55- day EMA)/113.44. The near term support is around 110 and any break below will drag it till 108.65.
GBP/USD: Sterling slumped below the 1.2500 handle, reversing some of its previous session gains after data showed British manufacturing lost momentum in March, as export orders grew more slowly and demand for consumer goods weakened amid rising inflation. The economy's manufacturing PMI slipped to 54.2 from a downwardly revised 54.5 in February, missing a forecast of 55.1. Sterling trades 0.3 percent lower at 1.2509, having hit an intra-day low of 1.2490. FxWirePro's Hourly Sterling Strength Index stood at 132.97 (Highly Bullish) by 1000 GMT. Any break below 1.2500 will drag the pair down till 1.2460/1.2400 and any close below 1.2400 will take it till 1.23700/1.2320. On the higher side, any break above 1.2580 will take it till 1.2610/1.2640. Against the euro, the pound traded 0.4 percent lower at 85.23 pence, having hit a high of 84.81 on Friday, its highest since Feb 27.
USD/CHF: The Swiss franc declined, extending losses for the fifth consecutive session, as positive trading sentiment around global equity markets weighed on the Swiss Franc's safe-haven appeal. The major traded 0.05 percent up at 1.0032, having hit a high of 1.0034, its strongest since Mar. 15. FxWirePro's Hourly Swiss Franc Strength Index stood at -129.17 (Highly Bearish) by 1000 GMT. The near-term resistance is at 1.0078 (61.8% retracement of 1.03435 and 0.98136)/1.00950 (trend line joining 1.033 and 1.01700). On the lower side, near term support is around 0.9993 (21- day EMA) and nay violation below will take the pair till 0.9960/0.9912 (200- day MA) /0.98600/0.98100.
AUD/USD: The Australian dollar tumbled to fresh a 1-week low below the 0.7600 handle after the data released showed Australia's retail sales fell 0.1 percent in the month of February, compared to the expected figure of 0.3 percent. The Aussie trades 0.3 percent down at 0.7604, having hit a low of 0.7591 earlier, it’s lowest since Mar. 28. FxWirePro's Hourly Aussie Strength Index stood at -3.40 (Neutral) by 1000 GMT. On the lower side, the next immediate support stands at 0.75875 (61.8% retracement of 0.74910 and 0.77490) and any break below will drag the pair down till 0.7545 (200- day MA)/0.7490. The major resistance is around 0.7750 (Feb 23 high) and a break above will take it till 0.7800. The minor resistance is around 0.7680.
Equities Recap
European shares rose in early trade, boosted by gains in oil stocks, while investors awaited the FOMC officials' speech for insights on the central bank's monetary policy outlook.
The pan-European STOXX 600 index rallied 0.25 percent to 382.10 points, while the FTSEurofirst 300 index rose 0.24 percent to 1,506.63 points.
Britain's FTSE 100 trades 0.06 percent up at 7,327.54 points, while mid-cap FTSE 250 slumped 0.15 percent to 18,944.12 points.
Germany's DAX edged up 0.35 percent at 12,355.65 points; France's CAC 40 trades 0.06 percent lower at 5,119.73 points.
Tokyo's Nikkei gained 0.39 percent to 18,983.23 points, Australia's S&P/ASX 200 index rose 0.08 percent to 5,869.80 points.
South Korea's KOSPI advanced 0.34 percent to 2,167.51 points. Hong Kong’s Hang Seng added 0.6 percent to 24,261.48 points.
Commodities Recap
Crude oil prices declined as a rise in the U.S. rig count stoked worries about global oversupply. International benchmark Brent crude was trading 0.3 percent down at $53.52 per barrel by 0937 GMT, having hit a high of $53.74 the prior session, its strongest since Mar. 9. U.S. West Texas Intermediate crude fell 0.26 percent to $50.65 a barrel, after rising as high as $50.80 on Friday, its highest since Mar. 9.
Gold prices held gains as lacklustre economic data from the United States and dovish remarks from a Federal Reserve official on Friday supported the metal's safe-haven appeal. Spot gold edged lower by 0.1 percent to $1,246.78 per ounce at 0940 GMT, having hit a low of $1,239.53 the prior session, its lowest its Mar. 21. while U.S. gold futures slipped 0.2 percent to $1,248.8.
Treasuries Recap
The 10-year U.S treasury yield stood at 2.387 percent lower by 0.008 bps, while 5-year yield was 0.012 bps down at 1.916 percent.
Eurozone's lower-rated countries’ government bond yields rose, underperforming their peers as a reduction in the European Central Bank's bond purchase programme took effect.
The Japanese government bond prices were mostly steady, with the benchmark 10-year JGB yield flat at 1.065 percent, while the 30-year yield dipped a basis point to 0.835 percent. The two-year yield, in contrast, rose 2 basis points to minus 0.175 percent, its highest since late December.
The Australian government bond futures edged higher, with the three-year bond contract up 1 tick at 98.060, while the 10-year contract rose 2.5 ticks to 97.2950. The New Zealand government bonds gained, pushing yields as much as 4.5 basis points lower at the long end of the curve.
