Market Roundup
- EUR/USD +0.3%, USD/JPY -0.6%, GBP/USD +0.35%, AUD/USD -0.05%
- DAX -0.75%, Brent -1.15%, DXY -0.2%, Gold -0.22%
- Germany Apr IFO Business Climate 106.6 vs 106.7 previous, 107.00 exp
- Germany Apr IFO Current Cond. 113.2 vs 113.8 previous, 113.8 exp
- Germany Apr IFO Expectations 100.4 vs 100.00 previous, 100.8 exp
- U.K Apr CBI Trends Orders vs -14.00 prev, -15 exp
- SNB sight deposits rise for 6 straight weeks
- Japan Abe Adviser Honda: More BOJ easing needed - DJN
- Honda: Not sure if this week is best time to ease - DJN
- Honda: Don't feel BOJ needs to offer loans to banks at negative rates - DJN
- CFTC IMM CTA data - Specs have net USD shorts for first time since May
- Japan’s life insurers stung by negative rates, look abroad for assets - NEN
- Obama boosts UK’s remain camp and infuriates the Brexiteers
- US-style credit crunch/Jpn-style grinding malaise increasingly likely
- ECB/Austria CB Nowotny – Neg rates necessary to avoid deflation
Economic Data Ahead
- (0900 ET/1300 GMT) Mexico will release its retail sales figures for the month of February. The indicator witnessed its biggest rise in more than two years in the prior month.
- (1000 ET/1400 GMT) The Commerce Department is likely to report that new home sales gained 1.0 percent to an annualized rate of 520,000 units in March from 512,000 units in February.
- (1030 ET/1430 GMT) The Dallas Fed releases its Manufacturing Business Index for the month of April. The index posted a decline of 13.6 percent in the prior month.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade Ops 30-yr Ginnie Mae max $1.125 bln.
FX Beat
USD: The dollar nursed losses across the board as investors poured into safe-haven asset. Against a basket of currencies, the dollar index was trading 0.3 percent lower on the day at 94.963.
EUR/USD: The euro rose 0.3 percent to 1.1255, pulling away from a low of 1.1215. The short term trend is slightly bearish as long as resistance 1.1320 holds. On the higher side major intraday resistance is around 1.12650 and break above targets 1.1320/1.1380/1.1400. The pair should close above 1.1400 for further bullishness. The support is at 1.1200 and nay violation below that level targets 1.11500/1.10500 level.
USD/JPY: The Japanese yen recovered from a low of 111.88 as investors anticipate the Bank of Japan to deliver further easing of monetary policy in a bid to halt the currency’s rise. The yen rose 0.5 percent to 111.16 yen, hovering towards sessions high 111.03 against the U.S. dollar. The short term trend is slightly bullish as long as support 110 holds. On the lower side any break below 110 will drag the pair down till 109.50/109. The major resistance is around 112.35 (55 day EMA) and break above targets 113/114.50.
GBP/USD: Sterling trades near a 6-week high against the euro, supported by growing expectations that Britons would vote to stay in the European Union after U.S. President Barack Obama appealed for Britain to remain in the 28-country bloc. Sterling rose 0.3 percent against the dollar to trade at 1.4447 and hit a 6-week high against the euro of 77.49 pence per euro. The pair was also aided by UK's CBI Trends Survey which came in at -11, better the market expectations -15 and previous -14. Intraday trend is slightly bullish as long as support 1.4400 holds. Any violation below 1.4400 will drag the pair down till 1.4370/1.4320/1.4280 in short term. On the higher any indicative break above 1.4460 will take it to next level till 1.45150/1.4545/1.4600.
USD/CHF: The Swiss franc trades 0.2 percent higher at 0.9744 against the dollar, pulling away from a low of 0.9789, struck earlier in the session. The greenback continues to decline, hovering towards session's low of 0.9743. The short term trend is slightly bearish as long as resistance 0.9800 holds. Any violation above 0.9800 will take the pair to next level till 0.9850/0.9900. The short term trend is reversal only below 0.9 level. On the lower side break below 0.9700 will drag the pair to next level till 0.9650/0.9630.
AUD/USD: The Australian dollar edged up to 0.7713, hovering towards session's high of 0.7726. The Aussie rose after following a 3-day continuous decline. The short term trend is slightly bearish as long as resistance 0.7850 holds. On the higher side minor resistance is around 0.7750 and break above targets 0.7780/0.7835/0.7850. The major support is around 0.7650 (daily Kijun-Sen) and break below will drag the pair till 0.7630/0.7575. The minor support is around 0.7680.
NZD/USD: The New Zealand dollar trades 0.3 percent higher at 0.6873, drifting towards session high of 0.6877. The kiwi continues to rise amid mixed market sentiments. Traders will remain cautious ahead of the Federal Reserve and RBNZ policy meeting due later in the week. The pair faces resistance at 0.6882 (20-DMA), break above could take the pair to 0.6928. Immediate support is seen at 0.6834 (Previous session Low).
Equities Recap
European shares declined as investors locked in some recent gains ahead of Federal Reserve and BoJ meetings this week.
Europe's FTSEurofirst skidded 0.4 pct, Germany's DAX dipped 0.6 pct, France's CAC 40 lost 0.2 pct while Britain's FTSE 100 was flat.
Tokyo's Nikkei ended down 0.76 pct at 17,439.30. MSCI's benchmark 23-country emerging market index dropped roughly 0.8 percent as it witnessed its second consecutive session of falls.
Shanghai Composite index and CSI300 index both edged down 0.4 pct at 2,946.67 points and 3,162.03 points, respectively. HK’s Hang Seng index lost 0.8 pct at 21,304.44 points.
Commodities Recap
Oil prices slumped as investors took profits after 3-weeks of gains. Front-month Brent crude was trading at $44.62 per barrel at 1029 GMT, down 53 cents from its last settlement. U.S. West Texas Intermediate futures were down 63 cents at $43.10 a barrel.
Gold edged up as the dollar reversed some of its recent gains; however it was curbed as investors remain cautious ahead of the Federal Reserve policy meeting later this week. Spot gold was trading flat at $1,232.80 an ounce by 1032 GMT, after rising 0.2 percent to $1237.36 earlier in the session. Silver edged down after it rose to an 11-month top last week.
Treasuries Recap
The 10-year U.S. treasuries yield stood at 1.8790 down by 0.007.
German Bund yields held above 0.2 percent, hovering near 1-month highs as investors remain cautious ahead of FOMC and BoJ meetings this week. The yield on 10-year German bonds, the benchmark in the euro zone, was steady at 0.23 percent and within sight of 1-month highs hit last week at 0.24 percent. The 2-year bonds yield climbed 3.21 pct to -0.271 pct.
French 10-year bunds yield dipped 1.16 pct to 0.561 pct, Spanish 10-year bonds yield inched down 0.37 pct to 1.559 pct and Portuguese 10-year bonds yield fell 1 pct to 3.263 pct.
Japanese government bond prices slipped; in anticipation the BoJ may not enhance bond buying if it should further ease monetary policy at its policy-setting meeting later in the week. The benchmark 10-year yield was up 4.5 basis points at minus 0.080 percent, reaching an 11-day peak. The 30-year yield climbed 5 basis points to 0.385 percent.
Gilts opened 5 ticks lower than the settlement of 119.56 but soon turned higher in line with external core markets.
