Market Roundup
- 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
- 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 U.S. consumer price index likely rose 0.2 percent in March after declining 0.2 percent in February. Excluding food and energy, the core CPI is expected to rise 0.2 percent after increasing 0.3 percent in February.
- (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits likely increased 3,000 last week to a seasonally adjusted 270,000. While continuing claims for the week ending April 1 is expected to decline to 2.183 M from 2.191 M.
- (0830 ET/1230 GMT) The Statistics Canada will release New Housing Price Index (NHPI) for the month of February. The index is likely to have risen by 0.1 percent in February,
- (1030 ET/1430 GMT) The Energy Information Administration reports its Natural Gas Storage for the week ending April 8.
Key Events Ahead
- (1000 ET/1400 GMT) Federal Reserve Board Governor Jerome Powell along with Treasury Counselor Antonio Weiss testify on "Examining Current Trends and Changes in Fixed-Income Markets" before the Senate Banking subcommittee on securities, insurance, and investments and the subcommittee on economic policy, in Washington.
- (1000 ET/1400 GMT) Federal Reserve Bank of Atlanta President Dennis Lockhart participates in moderated discussion, "Federal Reserve Perspective," before the ENGAGE International Investment Education Symposium, in Chicago.
- N/A International Monetary Fund (IMF) Managing Director Christine Lagarde's interview: "The Managing Director's Interview on the Global Economy.
- N/A World Bank Group President Jim Yong Kim participates in discussion on Paris climate agreement, "Turning the Paris Climate Agreement into Action".
- N/A People’s Bank of China Deputy Governor Yi Gang joins Ben Bernanke to discuss China's economic situation, challenges for the global economy at Brookings.
- N/A Alfonso Prat Gay, former Wall Street analyst and newly appointed finance minister of Argentina, holds a conversation before an audience at the Atlantic Council.
FX Beat
USD: The dollar gained as improved risk sentiment led investors to trim positions in low-yielding currencies like the yen and the euro. Against a basket of currencies, the dollar index was up 0.1 percent at 94.897, after rallying nearly 1 percent on Wednesday.
EUR/USD: The euro edged down to 1.1264, way below a 6-month high of 1.1465 touched on Tuesday. The pair has broken major support 1.1320 and has slightly recovered after making a low of 1.1233. On the lower die major support is around 1.11850 and break below will drag the pair till Mar 2016 low (1.1050). Minor bullishness can be seen only above 1.1320 and break above targets 1.1380/1.1400/1.1460. While the minor support is around 1.1200.
USD/JPY: The Japanese yen lost 0.1 percent to 109.42 against the U.S. dollar, pulling well away from a 17-month trough of 107.63 hit on Monday. 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 minor support is around 108.40/108, while the major resistance is around 110 and break above targets 111.25/112. The minor resistance is around 109.25
GBP/USD: Sterling declined by around half a percent after a YouGov poll showed voters evenly split at 39 percent for either side on June's referendum to leave the European Union. Sterling trades 0.4 percent down at 1.4134, after making a low of 1.4090 earlier in the session. It continues to extend its losses after rising to 1.4347 on Tuesday. The pound fell 0.4 percent to 79.63 pence per euro in early trade. Cable has broken minor support 1.4180 and declined till 1.4090. Intraday trend is slightly weak as long as resistance 1.4185 holds. Any break above 1.4185 will take the pair up till 1.4250/1.4320. 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.
USD/CHF: The Swiss franc edged up 0.1 percent at 0.9652, drifting away from a low of 0.9687 touched earlier in the session, against its U.S. dollar. The short term trend is bullish as long as support 0.9575 (200 day HMA) holds. On the lower side break below 0.9575 will drag the pair down till 0.9525/0.9480. Resistance is at 0.9700 and break above will take it to next level at
0.9750/0.9800. Overall bearish invalidation can happen only above 0.9800.
AUD/USD: The Australian dollar trades 0.6 percent higher at 0.7701, hovering towards a high of 0.7717 hit in the previous session. The Aussie dropped to a low 0.7619, before climbing back to its current levels. The short term trend is slightly bullish as long as support 0.7570 holds. On the higher side major resistance is around 0.7725 and break above targets 0.7750/0.7780. The
major support is around 0.7570 and break below will drag the pair till 0.7400/0.7380. The minor support is at 0.7650.
NZD/USD: The New Zealand dollar trades 0.8 percent lower at 0.6859, having touched a low of 0.6823, and away from a peak of 0.6952 touched on Wednesday. The kiwi eased from 10-month peaks after optimism about global growth gave investors hope that the Fed will raise interest rates further. On the downside, immediate support is located at 0.6812 (20-DMA), while on the upside, resistance is seen at 0.6952 (Previous Session High).
Equities Recap
European shares were subdued as markets were cautious ahead of top policymaker and oil producer meetings.
Europe's FTSEurofirst 300 edged up 0.1 pct, Germany's Dax gained 0.3 pct, UK's FTSE and France's CAC remained flat.
Tokyo's Nikkei gained 3.23 pct at 16,911.05. MSCI's broadest index of Asia-Pacific shares outside Japan surged 5 percent since Friday.
Shanghai Composite index nudged up 0.5 pct at 3,082.36 points, while CSI300 index closed up 0.4 pct at 3,275.83 points. HK’s Hang Seng index rose 0.9 pct at 21,337.81 points.
Commodities Recap
Oil edged up after falling to a low after the International Energy Agency trimmed its forecast for demand growth and on signs that a producers' meeting this weekend will not yield a concrete plan to reduce oversupply. Brent crude futures were at $44.09 a barrel by 1036 GMT, while U.S. crude was down 47 cents at $41.29 a barrel.
Gold extended losses into a third straight session as the stock markets rose on upbeat economic data from China. Spot gold was at $1,239.31 an ounce by 1038 GMT. It hit a 3-week high of $1,262.60 earlier this week as stocks and the dollar tumbled. U.S. gold futures declined 1 percent.
Treasuries Recap
The 10-year U.S. treasury yield stood at 1.763 percent versus previous close of 1.762 percent.
Euro zone government bond yields declined, with Irish 10-year bond yields down 2 basis points at 0.84 percent, while Bund yields fell 1 basis point to 0.13 percent. Other yields in the single currency bloc were 1-3 basis points lower. Bund yields are 6 basis points below this week's highs hit as France surprised markets with a syndicated sale of 20- and 50-year bonds.
Japanese government bonds were steady, shrugging off a stock market rally and tepid demand at a 30-year auction. In the superlong zone, the 30-year JGB yield was flat at 0.405 percent, after a relatively volatile session in which it fluctuated between a record low of 0.385 percent before the auction and 0.420 percent. The yield on the benchmark 10-year JGB was flat at minus 0.090 percent, while 10-year JGB futures ended up 0.05 point at 151.68.
Gilts opened 6 ticks higher than the settlement of 121.02 as dealers squared positions ahead of the MPC meeting.
Australian government bond futures extended losses on the jobs data, with the 3-year bond contract off 5 ticks at 98.070. The 10-year contract shed half a tick to 97.4800, while the 20-year contract was steady at 96.8900. New Zealand government bonds gained, sending yields 1 basis point lower.
