Market Roundup
- Japan's Hamada, Abe adviser says PPP suggests USD/JPY at 105 appropriate (BBG)
- Greek PM's office denies FT report that Greece is preparing for debt default if talks with creditors fail
- Berlin hasn't heard U.S. complain about weak euro (German official)
- Fitch affirms USA at 'AAA'; outlook stable US deficit expected to narrow further in '15/'16
- US Federal Budget, USD Mar -53b, (consensus -43.0b, previous -192.0b)
- Brazil CB poll '15 inflation at 8.13 v 8.20% pvs wk, lower but still well above the BCB's upper band
- EUR down as short rates slip again to new record low; Greece threatens default if talks fail; asset markets quiet ahead of inflation data later in week
- USDJPY modestly weaker with stocks, Hamada 105.00 comment leaves small mark; Cable helped by break in EURGBP to 3 wk lows; EURCHF drops to 10 wk low
- US markets cautious ahead of Mar Retail Sales (Tue 8:30), stocks and rates softer; important data point for spring rebound narrative; CPI Friday
- AUD, NZD never recover from Monday Asian session; CAD off lows with better oil but still ends down; EM weak on China trade miss
- Russian markets strong; bonds, stocks currency all recover to near 200 dma; unintended consequence of Euro QE; flexes muscles, lifts Iran missile ban
- (1800 ET/ 2200 GMT) NewZealand NZIER Confidence (previous Q1 23%)
- (1800 ET/ 2200 GMT) NewZealand NZIER QSBO Capacity Q1 (previous 91.9%)
- (1845 ET/ 2245 GMT) NewZealand Food Price Index Mar (previous -0.7%)
- (2130 ET/ 0130 GMT) Australia NAB Business Conditions Mar (previous 2)
- (2130 ET/ 0130 GMT) Australia NAB Business Confidence Mar (previous 0)
- No Significant Events
FX Recap
Cable is taking back higher ground on the 1.46 handle, covering shorts on profit taking mode. This week brings tomorrow's release of UK Mar CPI that is expected to remain at zero y/y. GBP/USD is currently trading at 1.4673 with a high of 1.4682 and a low of and a low of 1.4564. Strong support lies at 1.4600, while resistance are seen at 1.4635 followed by 1.4713. Option expiries Tuesday 14th April: 1.4500 (537M), 1.4800 (591M)
EUR/CHF: Euro is among the worst performers on Monday and EUR/CHF is headed toward the lowest daily close since January 28. The pair broke below 1.0365 (Apr 10 low) and dropped sharply to bottom during the NY session at 1.0320. Currently the pair is trading at 1.0330/35, down 0.50% for the day.
EUR/USD recovery capped around 1.0600 and the pair now visiting once again the 1.0570 area. Greece remains a source of uncertainty and keeps weighing on the pair. Spanish and Italian consumer prices are due tomorrow, ahead of key retail sales in US docket. The pair is now trading at 1.0565 down 0.36% on the day. Next support is at 1.0520 (low ) followed by 1.0457 (2015 low ) and finally 1.0400. On the flip side, supports lie at 1.0620 (high ), 1.0684 (high ) and 1.0772 (10-d MA). Option expiries Tuesday 14th April: 1.0500 (1.1B), 1.0605 (534M)
NZD/USD: Kiwi dropped sharply against the US dollar following weak Chinese economic data. NZD/USD bottomed at 0.7421 during the European session. Rebound thereafter found resistance around 0.7460. Currently the pair is hovering around 0.7450, down more than 1% for the day. The pair still holds above the 0.7400 area, which is a key support level. Option expiries Tuesday 14th April: 0.7600 (355M)
USD/JPY: Yen gained traction today following the appreciations by K.Hamada. Buying interest around the yen picked up pace soon after the comments, although it could not push further than the upper-119.00s. US Retail Sales due tomorrow and Japan Industrial Production and Capacity Utilization due Wednesday will be watched for further direction. USD/JPY is currently trading at 120.20 up 0.01% on the day. 121.00 is an immediate hurdle ahead of 121.16 and finally 121.20 (high ). Supports lie at 120.10 (low ), 120.05 (low ) and then 119.73 (Tenkan Sen). Option expiries Tuesday 14th April: 120.00 (550M), 121.00 (2.1B)
USD/MXN posts another strong daily gain today. USD up for the third consecutive session against the peso and closed at the highest level in almost a month. Today USD/MXN peaked at 15.372, the highest since March 18. Apart from broad-based dollar strength, the peso was also hurt by a disappointing industrial output report.
