Market Roundup
•Canada Mar IPPI (MoM) 0.8% ,0.8% forecast, 0.7% previous
•US Mar Chicago Fed National Activity 0.15, 0.05 previous
•Canada New Housing Price Index (MoM) 0.0%, 0.1% forecast, 0.1% previous
•Canada Mar IPPI (YoY) ) 0.8%, -1.7% previous
•Canada Mar RMPI (MoM) 2.9% forecast,2.1% previous
•French 12-Month BTF Auction 3.474%,3.471% previous
•French 3-Months BTF Auction 3.825% ,3.814% previous
•French 6-Months BTF Auction 3.710% ,3.706% previous
•EU Apr Consumer Confidence -14.7,-14.0 forecast,-14.9 previous
Currency Summaries
EUR/USD: The euro declined on Monday as dollar gained as investors reversed some defensive positions on cooling Middle East tensions. The rethink on Fed easing has led to a general repricing of global rate cut timelines, but expectations for the European Central Bank (ECB) and the Bank of England (BoE) to start cutting by mid-year are still intact. The dollar index , which measures the currency against six major peers, rose 0.19% to 106.28. It was also at a five-month top last week, at 106.51. The euro , which is heading for its biggest monthly drop against the dollar since January, was down 0.01% at $1.0653. Immediate resistance can be seen at 1.0656(38.2% fib), an upside break can trigger rise towards 1.0675(9EMA).On the downside, immediate support is seen at 1.0616 (23.6% fib), a break below could take the pair towards 1.0600 (23.6% fib).
GBP/USD: The pound declined against the dollar as drop was driven by tensions in the Middle East and expectation Bank of England will cut interest rates.Investors have cut back their bets in either direction on the pound and hold a fairly neutral stance, based on weekly data from the U.S. markets regulator.Investors are pricing in roughly two quarter-point cuts from the Bank of England this year, compared with fewer than two from the Federal Reserve and with nearly three from the European Central Bank.The next risk event for sterling is the release of preliminary business activity surveys for April on Tuesday. Immediate resistance can be seen at 1.2341 (38.2%fib), an upside break can trigger rise towards 1.2387 (50%fib).On the downside, immediate support is seen at 1.2310 (Daily low), a break below could take the pair towards 1.2288 (23.6 % fib).
USD/CAD: The Canadian dollar strengthened to a 10-day high against its U.S. counterpart on Monday as risk appetite improved and after domestic data showed new home prices stabilizing in March. The loonie was 0.4% higher at 1.3695 to the U.S. dollar, or 73.02 U.S. cents, adding to its winning streak since Wednesday and trading at its strongest level since April 12. U.S. stocks rose after steep losses in the previous session as easing Middle East tensions buoyed risk appetite. Canada is a major producer of commodities, including oil, so the loonie tends to be sensitive to shifts in investor sentiment. Immediate resistance can be seen at 1.3724 (5DMA), an upside break can trigger rise towards 1.3743 (23.6%fib).On the downside, immediate support is seen at 1.3678(38.2% fib), a break below could take the pair towards 1.3642(50% fib).
USD/JPY: The U.S. dollar climbed to a fresh 34-year peak against the yen on Monday even as they remained alert to any signs of intervention by Japan to prop up its struggling currency. The market is laser-focused on the yen ahead of the Bank of Japan's (BOJ) policy review on Friday. Besides the BOJ meeting and one of the biggest weeks for U.S. earnings releases, investors will also get U.S. first-quarter gross domestic product data on Thursday and the inflation metric the Fed targets, the personal consumption price expenditures (PCE) index. The dollar rose to 154.85 yen versus the Japanese currency, its highest since mid-1990. It was last up 0.1% at 154.82 yen , a whisker away from the 155-level that is next on traders' radars for possible intervention. Strong resistance can be seen at 154.84 (23.6% fib), an upside break can trigger rise towards 155.00 (Psychological level).On the downside, immediate support is seen at 154.14 (5 EMA), a break below could take the pair towards 153.44 (38.2% fib).
Equities Recap
European stocks closed higher on Monday, with British blue-chips nearing record levels as investors took comfort from easing tensions in the Middle East and looked ahead to earnings from European banks and U.S. tech giants later this week.
UK's benchmark FTSE 100 closed up by 1.62 percent, Germany's Dax ended up by 0.64 percent, France’s CAC finished the day up by 0.22 percent.
Wall Street stocks ended higher on Monday following a market sell-off in previous sessions as investors eyed a busy week for quarterly results from key companies that would provide a glimpse of the U.S. economy's health.
Dow Jones closed up by 0.67% percent, S&P 500 closed up by 0.87% percent, Nasdaq settled up by 1.11% percent.
Treasuries Recap
U.S. Treasury yields were little changed on the day on Monday ahead of Treasury sales of $183 billion in new supply and as investors waited for data to provide new clues on when the Federal Reserve is likely to begin cutting interest rates.
Benchmark 10-year note yields were last at 4.621%. They are holding just below the 4.696% level reached on April 16, which if broken would be the highest since early November.
Commodities Recap
Gold prices dropped more than 2% to a one-week low on Monday as worries over a wider Middle East conflict subsided, prompting investors to scale back safe-haven trades in favour of riskier assets like equities.
Spot gold was down 2.5% at $2,330.51 per ounce as of 1:52 p.m. ET (1752 GMT), and marked its biggest intra-day fall in more than a year.U.S. gold futures settled 2.8% lower at $2,346.4.
Oil futures fell on Monday as traders focused on market fundamentals, seeing little near-term risk that the Middle East conflict would impact supply.
Brent crude futures settled at $87.00 a barrel, down 29 cents, or 0.33%. U.S. West Texas Intermediate crude finished down 29 cents, or 0.35%, at $82.85 a barrel.
