Market Roundup
- Explosions hit Brussels airport, metro station at least 13 killed – Belgian media
- China Vice Fin Min Zhu – No secret US-China exchange rate agreement
- China considers Tobin tax to contain capital outflows – FX regulator
- Saudi policy-making body approves economic reforms – SAGIA head
- Japan Fin Min Aso – No need now for fresh fiscal stimulus, underlying fundamentals firm
- Japan Econ Min ishihara – NIRP effect not yet clear, must monitor for 3 months
- BoJ Dep Gov Nakaso – Possible for rates to go farther into negative territory, can’t say how far
- Japan Lower House approves reflationist Sakurai for BoJ Policy Board
- Ex-Norinchukin MD Takahashi appointed new GPIF head from April 1
- Japan Mar Nikkei Mfg PMI flash 49.1 vs 50.1 previous
- EZ Mar Markit mfg flash PMI 51.4 vs 51.2 previous, 51.3 exp
- EZ Mar Markit serv flash PMI 54.0 vs 53.3 previous, 51.3 exp
- EZ Mar Markit comp flash PMI 53.7 vs 53.0 previous, 53.0 exp
- German Mar Markit mfg flash PMI 50.4 vs 50.5 previous, 50.8 exp
- German Mar Markit serv flash PMI 55.5 vs 55.3 previous, 55.0 exp
- German Mar Markit comp mfg flash PMI 54.1 vs 54.1 previous
- German Mar Ifo business climate 106.7 vs 105.7 previous, 106.0 exp
- German Mar Ifo current conditions 113.8 vs 112.9 previous, 112.6 exp
- German Mar Ifo expectations 100.0 vs 98.8 previous, 99.5 exp
- German Mar ZEW economic sentiment 4.3 vs 1.0 previous, 5.0 exp
- German Mar ZEW current conditions 50.7 vs 52.3 previous, 53.0 exp
- UK Feb CPI 0.2% m/m vs -0.8% previous, 0.4% exp
- UK Feb CPI 0.3% y/y vs 0.3% previous, 0.4% exp
- UK Feb Core CPI 0.4% m/m vs -1.0% previous, 0.5% exp
- UK Feb Core CPI 1.2% y/y vs 1.2% previous, 1.2% exp
- UK Feb RPI 0.5% m/m vs -0.7% previous, 0.5% exp
- UK Feb RPI 1.3% y/y vs 1.3% previous, 1.3% exp
- UK Feb PSNB Ex Banks GBP 7.089bn vs -11.21bnprevious, 5.8bn exp
- UK Feb PSNB GBP 6.485bn m/m vs -11.81bn previous, 5.25bn exp
- Paddy Power cuts Brexit odds to 13/8, from 2/1 Monday & 9/4 a week ago
- Moody’s warns UK budget signals negative for rating
- Chancellor Osborne looks set to miss budget target for 2015/16
- London Mayor Johnson says abandoned welfare cuts were a mistake
Economic Data Ahead
- (0900 ET/1300 GMT) Federal Housing Finance Agency's Housing Price Index likely edged up to 0.5% in January from a reading of 0.4% in December.
- (0945 ET/1345 GMT) The Markit Economics releases its Preliminary Manufacturing Purchasing Managers Index (PMI) for the month of March. The index stood at 51.3 in February.
- (1000 ET/1400 GMT) Federal Reserve Bank of Richmond is expected to report that the Manufacturing Index slightly improved to -1 in March from -4 in previous month.
- (1630 ET/2030 GMT) API reports its weekly crude oil stocks.
Key Events Ahead
- N/A Canadian Finance Minister Bill Morneau will present his first budget and he is set to unveil a deficit of up to C$30 billion ($22.96 billion).
- (1330 ET/1730 GMT) Federal Reserve Bank of Chicago President Charles Evans will speak on monetary policy and the risks to the U.S. economic outlook.
- (1900 ET/2300 GMT) Federal Reserve Bank of Philadelphia President Patrick Harker speaks on "Growth and the Role of Economic Policies" before the Money Marketeers of New York University.
FX Beat
USD: The dollar index trades 0.21% up at 95.593, pulling further away from a 5-month low of 94.578 set on Friday. The short term trend is slightly bullish as long as support 95 holds.
On the lower side any break below 95 will drag the pair till 94.50/94/93.16. Any break above major resistance 95.70 will take the index till 96.05/96.55/97.10.
EUR/USD: The euro trades lower at 1.1207, after having rebounded from Thursday's 1-month high of 1.1342, with investors ignoring the German IFO survey and euro zone purchasing managers' surveys on the back of the explosions in Brussels. The pair has broken 1.1207 level and declined till 1.1883. Intraday trend is weak as long as support 1.1260 holds. On the lower side any break below 1.12070 (trend line joining 1.12558 and 1.12355) will drag the pair down till 1.1155/1.1100, while break above 1.1260 will confirm minor bullishness for the intraday, a jump till 1.1300/1.1350 is possible. The short term bearish invalidation is only above 1.13500.
USD/JPY: The yen was 0.24% up at 111.67 yen against the dollar, having touched day's high of 111.38 yen. It traded lower before the start of the European trading session. Against the euro, the yen rose to a 12-day high, rising almost 1 percent at one point. The short term trend is slightly weak as long as resistance 112.70 holds. On the lower side major support is around 110 and break below targets 108.85/106. The major resistance is around 112.70 and break above targets 113.60/114.25.
GBP/USD: Sterling was 0.6 percent down at 1.4281, more than two cents off Friday's 1-month high of 1.4514 after a warning from Moody's on the impact on Britain's credit rating of last week's budget, hurt the investors sentiments. The pound dipped following the consumer prices release, which showed consumer prices still struggling to gain pace in both monthly and annual terms. Sterling was 0.2 percent lower at 78.34 pence per euro. The pair has broken major support 1.4350 and declined till 1.4250. The short term trend is weak as long as resistance 1.4400 holds. Any break above will take the pair to next levels at 1.4450/1.4500. The short term bearish invalidation is only above 1.4520. On the lower side any break below 1.4250 will drag the pair down till 1.4200/1.4150
USD/CHF: The Swiss franc rose after explosions in Brussels spurred inflows into traditional safe-haven currencies. The pair has retreated after making a high of 0.9729 and trades around 0.9710. The short term trend is slightly bullish as long as support 0.9650 holds. The major support is around 0.9650 and any break below will drag the pair down till 0.9600/0.9528 level. On the higher side minor resistance is around 0.9750 and any break above targets 0.9780/0.9855. The short term bearish invalidation is only above 0.9780. The Swiss franc advanced to a 2-week high of 1.0879 franc per euro.
AUD/USD: The Australian dollar trades 0.33 percent higher at 0.7601, after making a low of 0.7550. The short term trend is slightly bullish as long as support 0.7550 holds. On the higher side major resistance is around 0.7680 and break above targets 0.7725/0.7750, while the minor resistance is around 0.7650. The pair’s major support is around 0.7550 and break below will drag the pair till 0.7500/0.7430.
NZD/USD: The New Zealand dollar trades 0.17 percent lower at 0.6746, having touched session's low of 0.6720. Traders are likely to continue the previous two session's bearish trend. Earlier in the day, it made a high of 0.6776 before falling down to its current levels. Immediate support is located at 0.6707 (20-DMA), while resistance is seen at 0.6791 (Previous Session High).
Equities Recap
European stocks declined and investors rushed for the safety of gold and government bonds, after blasts in Brussels prompted a flight towards safe-haven assets, overshadowing data.
The STOXX Europe 600 Travel & Leisure index was the top sectoral faller, down 2.2 percent. Europe's FTSEuroFirst 300 index and Germany's DAX were down 1 percent, Britain's FTSE 100 slumped 0.5 pct, France's CAC 40 lost 0.7 pct.
Shanghai Composite Index edged down 0.6 pct at 2,999.36 points, while CSI300 Index ended down 0.7 pct at 3,225.79 points. HK’s Hang Seng Index nudged down 0.1 pct at 20,666.75 points, Tokyo's Nikkei rose 1.94 pct at 17,048.55.
Commodities Recap
Oil prices slumped on Tuesday, swept lower by investor nervousness after explosions at Brussels sent investors towards safe-haven assets. Brent crude futures dropped 14 cents to $41.56 a barrel by 1025 GMT, having risen to a session high of 41.73, while U.S. May crude futures were down 11 cents at $41.49 a barrel.
Spot gold edged up on Tuesday after declining for 3 days after a Fed official stated that the next U.S. rate rise could come as soon as next month. Spot gold was trading up 0.7 percent at
$1,252.23 an ounce by 1030 GMT, while U.S. gold was up 0.5 percent at $1,250.6 an ounce.
Treasuries Recap
The 10-year U.S Treasuries yield stood at 1.910 percent versus previous close of 1.921 percent.
Euro zone yields declined as explosions in Brussels firmed demand for safe haven bonds. The yield on benchmark German government bonds fell to a 2-week low of 0.18 percent. Bonds have followed Bunds slightly higher, extending their earlier gains as the 10-year Bund futures are up over ½ point from their open and from Monday's settle.
Japanese government bond prices gained with the 30-year yield reaching a new record low, as investors reinvested proceeds from maturing debt back into the market.
June 10-year JGB futures nudged up 0.02 point to 151.73. The 30-year yield touched a life-time low of 0.455 percent. The benchmark 10-year yield stood little changed at minus 0.100
percent after hitting an all-time low of minus 0.135 percent last week.
June Gilts pushed around 7 ticks higher on the data to 120.67 before easing back a couple of ticks.
Australian government bond futures fell, with the 3-year bond contract off 2 ticks at 98.040. The 10-year contract eased 3 ticks to 97.401, while the 20-year contract shed 4.5 ticks to 96.8300. New Zealand government bonds eased, sending yields 2.5 basis points higher at the short end of the curve and 4.5 basis points higher at the long end.
