Market Roundup
- EUR/USD +0.07%, USD/JPY -0.1%, GBP/USD +0.3%, AUD/USD +0.25%
- DAX -0.2%, Brent +0.6%, DXY -0.05%, Gold +1.34%
- Riksbank unchanged rates but QE extended SEK 45bln H2
- EUR/SEK dips to 9.1150 vs 9.1750 into the CVB decision
- Switzerland Mar Trade Bal. CHF2.163bln vs rvsed 4.022bln previous
- France Apr Business Climate 104 vs 102 previous, 101 exp
- UK Mar PSNB Ex-Bks GBP4.769bln vs 6.937bln previous, 6.0bln exp
- UK Mar PSNB GBP4.165bln m/m vs 6.333bln previous, 5.5bln exp
- UK Mar PSNCR GBP 16.598bln vs -381mln previous
- UK Mar R.Sales +2.7% y/y vs 3.6% rvsd previous, 4.4% exp
- Ex-BoJ Iwata – BoJ must cut key rate to -1.0% to put away deflation
- Japan's ruling bloc eyeing summer parliamentary session – Nikkei
- Moody’s – Rated China property developers credit quality to remain weak
- New Zealand April ANZ/RM consumer confidence index 120.0, March 118.0
Economic Data Preview
- (0830 ET/1230 GMT) The new applications for U.S. unemployment benefits likely rose 10,000 to a seasonally adjusted 263,000 for the week ending April 15. While continuing claims for the week ending April 8 is expected to remain unchanged at 2.171 M.
- (0830 ET/1230 GMT) The Philadelphia Federal Reserve business survey is likely to show manufacturing in the mid-Atlantic region expanded in the month of April.
- (0900 ET/1300 GMT) The Federal Housing Finance Agency is likely to report that Housing Price Index edged down 0.4 percent in the month of February from 0.5 percent in January.
- (1030 ET/1400 GMT) United State's Conference Board reports its Lending Index for the month of March. The index is expected to rise 0.4 percent from 0.1 percent in February.
- (1000 ET/1400 GMT) The European Commission will release preliminary consumer confidence index for the month of April. The index is likely to post a decline of 9.5 after dropping to 9.7 in the prior month.
- (1030 ET/1430 GMT) The Energy Information Administration reports its Natural Gas Storage for the week ending April 15.
Key Events Ahead
- (0830 ET/1330 GMT) ECB President releases the monetary policy statement and gives a press conference, following policy decision.
- (0945 ET/1345 GMT) FedTrade Ops 15-yr F.Mae/Fr.Mac max $650 mln
- (0945 ET/1345 GMT) FedTrade Ops30-yr Ginnie Mae max $1.125 bln
- (1000 ET/1400 GMT) The Bank of England Governor Mark Carney's Speech.
FX Beat
USD: The dollar lost ground against the yen and euro. Against a basket of currencies, the dollar index stood 0.2 percent lower at 94.363, having touched a high of 94.644 earlier in the session.
EUR/USD: The euro steadied around 1.1308, having touched session’s low of 1.1283 as investors adjusted positions before the European Central Bank policy meeting where markets widely expected the central bank to hold interest rates unchanged at record lows. Further weakness can be seen below 1.1150. Break below 1.1150 will take the pair till 1.1050 level. On the lower side minor intraday support is around 1.1270 and any violation below that level will drag the pair to next level 1.1230/1.1180 level. The pair is facing intraday resistance around 1.13250 level and any violation above this level will reach till 1.1380/1.1435/1.1460.
USD/JPY: The Japanese yen edged up against the U.S. dollar, trading around 109.73, after making a high of 109.51, earlier in the session. The short term trend is slightly bullish as long as support 108.75 (Daily Tenken-Sen) holds. On the lower side any break below 108.75 will drag the pair down till 108/107.60. The major resistance is around 110 and break above targets 111.25/112, while the minor resistance is around 109.25.
GBP/USD: The Sterling steadied, hovering towards 3-week high against the euro despite British retail sales data declining in March. The economy's retails sales for the month of March declined 1.3 percent, against market expectation of -0.1 percent and previous -0.5 percent. On annualized basis, it stood at 2.7 percent, versus previous 3.6 percent. Sterling was firm at 1.4373, while against the euro, it stood at 78.73 pence per euro, close to a 3-week high of 78.64 pence. The 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 gained against its U.S. counterpart, trading around 0.9709 after making a high of 0.7698 earlier in the session. Intraday trend is bullish as long as support 0.9630 holds. Any violation below 0.9630 will drag the pair down till 0.9580/0.9520/0.9500. The short term trend is reversal only below 0.9500 level. On the higher side break above 0.9690 will take the pair to next level till 0.9750/0.9780/0.9800.
AUD/USD: The Australian dollar was steady at 0.7804, hovering towards an 11-month peak of 0.7829, struck in the previous session. The Aussie declined to a low of 0.7786, before climbing back to its current levels. It has gained more than 2 cents this week. The short term trend is slightly bullish as long as support 0.7740 holds. On the higher side major resistance is around 0.7850 and break above targets 0.7915/0.7950. The major support is around 0.7740 and break below will drag the pair till 0.7700/0.7680/0.7630.
NZD/USD: The New Zealand dollar extended losses, trading 0.2 lower at 0.6956, away from a peak of 0.7053 touched on April 19. The Kiwi rose to a intra-day high of 0.6982 on local upbeat Visitor Arrivals data, however, it failed to sustain gains. On the downside, immediate support is located at 0.6917 (10-DMA), while on the upside, resistance is seen at 0.7048 (Previous Session High).
Equities Recap
World stock markets advanced to their highest in almost 5-months, as a surge in oil prices strengthened risk appetite.
European stocks edged higher at the open, with the FTSEurofirst 300 index up 0.2 pct, Germany's DAX and France's CAC both rose 0.3 pct, while UK's FTSE nudged up 0.1 pct
Shanghai Composite index closed down 0.7 pct at 2,952.89 points, while CSI300 index edged down 0.6 pct at 3,160.60 points. HK’s Hang Seng index rose 1.8 pct at 21,622.25 points.
Tokyo's Nikkei gained 2.70 pct at 17,363.62. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.8 percent, its highest since early November.
Commodities Recap
Brent crude extended strong gains to hit a 5-month peak just above $46 a barrel after the International Energy Agency stated that 2016 would see the biggest decline in non-OPEC production in a generation, helping to rebalance the oversupply. Benchmark Brent crude futures were at $45.87 a barrel by 1037 GMT, while U.S. crude futures were 17 cents higher at $44.35.
Gold prices rose to a high of $1261.48 an ounce and was trading at $1259.27 an ounce by 1044 GMT, after dropping 0.5 percent in the previous session. U.S. gold futures eased 0.6 percent to $1,246, catching up with moves in the spot market.
Treasuries Recap
The 10-year U.S. treasuries yield stood at 1.8575 up by 0.005.
Euro zone bond yields rose as oil prices hit a 5-month high, supporting the outlook for inflation. The benchmark German 10-year bonds yield, rose 32.67 pct to 0.199 pct, pulling away from 0.05 percent record lows. French 10-year bunds yield jumped 9.13 pct to 0.540 pct, Italian equivalents climbed 4.0 pct to 1.450 pct, while Spanish 10-year bonds yield inched up 4.44 pct to 1.6 pct.
Japanese government bonds edged down, as firm demand at a 20-year auction failed to offset waning risk aversion and rallying equities. The benchmark 10-year JGB yield added 1.5 basis points to minus 0.120 percent, a day after matching a record low set late last month. The 20-year yield added half a basis point to 0.260 percent. The 30-year JGB yield fell 2 basis points to 0.270 percent, after earlier skidding as low as 0.265 percent. The 10-year JGB futures contract ended down 0.12 point at 151.94.
Gilts opened 50 ticks lower than the settlement of 120.79 as a strong bounce in oil prices weighed on core fixed income markets. The yield on the benchmark 10-year bonds, moved higher 5.59 pct to 1.567 pct and the yield on the 2-year bonds rose 6.51 pct to 0.509 pct.
Australian government bond futures dropped to 1-month lows, with the 3-year bond contract off 6 ticks at 97.990. The 10-year contract shed 7.5 ticks to 97.4050 in a bearish steepening of the curve. The 20-year contract fell 5.5 ticks to 96.8500. New Zealand government bonds eased, sending yields 2 basis points higher at the long end of the curve.
