Market Roundup
- BOJ considering negative rates for lending programme for bks-Bbg
- USD/JPY 110.76 high from early 109.26 low
- USD/JPY +1.0%, EUR/JPY +1.0%, EUR/USD -0.1%, GBP/USD +0.15%
- DAX -0.75%, DXY +0.18%, Brent -0.35%, Gold +0.85%
- Germany Apr Flash Mfg PMI 51.9 vs 50.7 previous, 51.0 exp
- Eurozone Apr Flash Mfg PMI 51.5 vs 51.6 previous, 51.8 exp
- Italy Feb Ind Orders 3.8% y/y vs 0.10% previous
- Italy Feb Ind Sales -0.2% y/y vs -0.3% previous
- Japan eyes double-barreled stimulus to ease yen strains
- Japan Post Nagato – No plans to splurge on Japan stocks
- New Zealand FinMin English douses rpts on RBNZ inflation tgt concerns
Economic Data Ahead
- (0830 ET/1230 GMT) Canada's annual inflation rate is likely to have declined to 1.2 percent in March, drifting further from the Bank of Canada's target of 2 percent. While core inflation is expected to be strong at 1.7 percent.
- (0830 ET/1230 GMT) The Statistics Canada is expected to report that retail sales declined by 0.8 percent in February after posting strong gains in January.
- (0900 ET/1300 GMT) Mexico's inflation is expected to have remained steady at 2.71 percent in the 12 months through mid-April.
- (0945 ET/1345 GMT) Markit releases its preliminary U.S. manufacturing purchasing managers' index for the first half of April, which is likely to have edged up to 52.0 from 51.5 in March.
- (1300 ET/1700 GMT) Baker Hughes reports U.S. Oil Rig Count.
Key Events Ahead
- (1145 ET/1545 GMT) FedTrade Ops 30-yr F.Mae/Fr.Mac max $2.100 bln
FX Beat
USD: The dollar gained across the broad, it touched a high of 110.81 against the yen and 1.1255 against the euro. The dollar index, against a basket of currencies stood 0.2 percent higher at 94.854.
EUR/USD: The euro extended losses, after eurozone's business data showed an unexpected slowdown in the month of April. Eurozone's Markit preliminary manufacturing PMI for April came in at 51.5, against market consensus of 51.8 and previous 51.6. Markit preliminary services PMI also contracted edging down to 53.2 versus pervious 53.1. The pair trades around 1.1265, hovering towards session's low of 1.1255, and away from a high of 1.1398, struck in the previous session. On the lower side any break below 1.1270 will drag it to next level 1.1230/1.1180 level. Further weakness can be seen below 1.1150. Break below 1.1150 will take the pair till 1.1050 level. Intraday resistance around 1.1325 level and any violation above this level will reach till 1.1400/1.1435/1.1460.
USD/JPY: The Japanese yen trades 1.1 percent lower at 110.63 against the dollar, as markets speculate BoJ might go even further with negative interest rates. Traders are likely to remain cautious ahead of the BoJ's policy meeting next week. The greenback rose back again above the 110 mark, pulling away from a low of 109.26, struck earlier in the session. The short term trend is slightly bullish as long as support 109.10 (200 day HMA) holds. On the lower side any break below 109 will drag the pair down till 108/107.60. The major resistance is around 110.75 (Daily Kijun-Sen) and break above targets 111.25/112.
GBP/USD: Sterling was on course for its best week since early March, aided by polls that have showed strong support for Britain to remain in the EU in June's referendum. Sterling rose 0.3 percent higher at 1.4373, hovering towards sessions high of 1.4379. Against the euro it gained 0.5 percent to 78.39 pence. In trade-weighted terms, the pound is 1.3 percent higher on the week. Minor trend is slightly bearish as long as resistance 1.4460 holds. Any break below 1.4280 will drag the pair to next level till 1.4240/1.417/1.4100. On the higher side major resistance is around 1.4430 and break above targets 1.4460/1.45150 in short term. Overall bullish invalidation only below 1.4000.
USD/CHF: The Swiss franc extended losses against the U.S. dollar, trading around 0.9750, after going as low as 0.9772 earlier in the session. In the previous session, it made a high of 0.9647, however, could not sustain gains, closing out at 0.9752. Intraday trend is bullish as long as support 0.9700 holds. Any violation below 0.9700 will drag the pair down till 0.9680/0.9625/0.9575. The short term trend is reversal only below 0.9500 level. On the higher side break above 0.9800 will take the pair to next level till 0.9850/0.9900.
AUD/USD: The Australian dollar edged up to 0.7749, having touched session's high of 0.7774. The Aussie made a low of 0.7724 earlier in the session, before climbing up to its current levels. It is nearly 1 percent up this week and 6.5 percent for the year. The short term trend is slightly bearish as long as resistance 0.7850 holds. On the higher side major resistance is around 0.7850 and break above targets 0.7915/0.7950. The major support is around 0.7725 (200 days HMA) and break below will drag the pair till 0.7700/0.7680/0.7630.
NZD/USD: The New Zealand dollar trades 0.2 percent lower at 0.6891, after making a high of 0.6935 earlier in the session. Traders are likely to remain bearish, following previous two sessions trend; however, it is on track for a 0.2 percent gain on the week. Immediate support is located at 0.6877 (Session's Low), while on the upside, resistance is seen at 0.6952 (5-DMA).
Equities Recap
European shares were weighed down by disappointing earnings reports of the world's biggest tech companies, however, on course for weekly gains.
Europe's FTSEurofirst 300 and France's CAC 40 both lost 0.2 pct, Germany's DAX nudged down 0.5 pct and Britain's FTSE 100 dipped 0.4 pct.
Tokyo's Nikkei gained 1.20 pct at 17,572.49. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.8percent, as traders cashed in on the 5 1/2-month high hit on Thursday.
Shanghai composite index nudged up 0.2 pct at 2,959.24 points, while CSI300 index rose 0.5 pct at 3,174.90 points. HK’S Hang Seng index skidded 0.7 pct at 21,467.04 points
Commodities Recap
Oil prices edged down, after touching $45 a barrel mark, however, heading for a third straight week of gains as market sentiment turned more upbeat despite persistent oversupply. International benchmark Brent crude futures were trading at $44.48 per barrel at 1039 GMT, down by 0.5 percent. U.S. West Texas Intermediate crude was up 14 cents, or 0.3 percent, at $43.32 a barrel.
Gold declined and silver pared gains as the dollar strengthened against the yen, however, both metals were still headed for weekly gains. Gold was flat at $1,246.69 an ounce by 1046 GMT, after hitting a 5-week high of $1,270.10 an ounce on Thursday. Spot silver was up 1.06 percent at $17.161 an ounce. Silver is up 5.4 percent for the week, while gold is up 1 percent.
Treasuries Recap
The 10-year U.S. Treasuries yield stood at 1.8559 percent, compared with 1.752 percent at the end of last week. It rose to a 3-week high of 1.891 percent on Thursday.
German Bund yields were down 1 basis point at 0.22 percent, however, still up 9.1 basis points on course for one of their biggest weekly gains. French 10-year bunds yield dipped 0.60 pct to 0.559 pct, Spanish 10-year bonds yield inched down 0.31 pct to 1.586 pct and Portuguese 10-year bonds yield fell 0.25 pct to 3.191 pct.
Japanese government bond prices declined as safe-haven bids continued to recede as investor risk appetite improved globally. JGBs also came under pressure from a rise in U.S. Treasury and German Bund yields. The benchmark 10-year JGB yield climbed 1.5 basis points to minus 0.110 percent. The 20-year yield rose 1 basis point to 0.265 percent.
Gilts opened 2 ticks lower than the settlement of 119.74 but 4 ticks higher than the close.
Australian government bond futures eased, with the 3-year bond contract off 2 ticks at 97.980. The 10-year contract also shed 2 ticks to 97.3900, while the 20-year contract was unchanged at 96.8300. New Zealand government bonds eased, sending yields 2 basis points higher across the curve.
