Market Roundup
- Westpac / MNI China Consumer Sentiment (March) 118.1 (prior 111.3).
- Asian Development Bank Cuts ‘16 Growth Forecast (Developing Asia) to 5.7% from 6.0%.
- ADB Forecasts China Growth at 6.5% in 2016, 6.3% in 2017.
- ADB Sees India Growth at 7.4% in 2016, 7.8% in 2017.
- PBOC Sets Yuan Mid-Point at 6.4841 / Dlr Vs Last Close 6.5065.
- Japan February Industrial Output -6.2% M/M - Meti (Reuters Poll: -6.0%).
- Japan Manufacturers See March Output +3.9% M/M (Previous Forecast: +3.1%) – Meti.
- Japan Manufacturers See April Output +5.3% M/M – Meti.
- New Zealand S/Adjusted New Dwelling Consents +10.8% in February Vs previous Month.
Economic Data Ahead
- (0400 ET/0800 GMT) Norway Labour Force Survey.
- (0500 ET/0900 GMT) Euro zone Selling Price Expectations, previous -5.5.
- (0500 ET/0900 GMT) Euro zone Industrial Sentiment, previous -4.4.
- (0500 ET/0900 GMT) Euro zone Business Climate previous 0.1.
- (0500 ET/0900 GMT) Euro zone Consumer Confidence Final, previous -8.8, forecast -10.0.
- (0500 ET/0900 GMT) Euro zone Economic Sentiment.
- (0500 ET/0900 GMT) Euro zone Services Sentiment previous 10.6, expected 11.0.
- (0500 ET/0900 GMT) Euro zone Consumer Inflation Expectation, previous 3.7.
- (0800 ET/1200 GMT) Germany HICP Prelim, previous 0.4, forecast 0.7.
Key Events Ahead
- (0630 ET/1030 GMT) Germany 5Y 4.000B 09/04/21.
- (0600 ET/1000 GMT) Italy 7YFR E1.500B 0.337% 15/12/22 EUR1-1.5BN .
- (0600 ET/1000 GMT) Italy 5Y E3.500B 0.450% 01/06/21 EUR3-3.5BN.
- (0600 ET/1000 GMT) Italy 10Y E3.000B 1.600% 01/06/26 EUR2.5-3.0.
FX Recap
USD: Dollar bulls were on the defensive on Wednesday after Federal Reserve chair Janet Yellen's cautious tone left markets wondering if there will be even one hike to U.S. interest rates this year. In a speech to the Economic Club of New York, Yellen stressed the need to be cautious in raising rates and highlighted external risks including low oil prices and slower growth abroad. The greenback dipped about 0.2 percent to 112.43 yen after bumping to a nearly one-week session low of 112.39, moving further away from a nearly two-week high of 113.805 touched on Tuesday.
EUR/USD: The Euro was last steady at $1.1293, after popping up as high as $1.1303 overnight, within sight of this month's peak of $1.1342 set on March 17. Pair refrains to fall below key support at $1.1159 marks and rose sharply up around $1.1300 mark. Intraday bias remains bullish till the time pair holds key support level at $1.1159. A daily close above key resistance at 1.1272 will drag the parity up towards $1.1342/ $1.1376 marks. On the down side, key support level is seen at $1.1159/ $1.1057 marks.
USD/JPY: The yen firmed even as dismal data released early in the session heightened speculation that Japan will need to muster more stimulus to avert another recession. Factory output fell 6.2 percent last month from the previous month, the biggest tumble since 2011 when the devastating earthquake, tsunami and nuclear crisis disrupted Japan's supply chain. Japanese Yen breaks key support at 112.60 and remains well supported around 112.27 levels. A daily close below key support level at 112.60 will drag the parity down towards at 110.66/ 108.75/107.51 marks thereafter. On the top side, key resistance levels are seen at 114.87/115.96 levels.
GBP/USD: Sterling broke above $1.4400 overnight, pulling further away from a seven-year trough of $1.3836 set on Feb. 29, as the market put aside "Brexit" jitters for now. It was last steady at $1.4374. Pair breaks initial resistance level at $1.4358 and trading around $1.4401 marks. A daily close above $1.4357 will take the parity up towards key resistances at $1.4504/$1.4602. Alternatively, a sustained break below key support level will drag the parity down at $1.4057 marks.
AUD/USD: The Australian dollar climbed to $0.7629, edging closer to the recent 8-1/2 month peak of $0.7681. A break above $0.7681 would target the June peak of $0.7849. Australian dollar remains supported around $0.7630. Intraday bias remains bullish till the time pair holds key support at $0.7497 levels. A sustained close above it will drag the parity up towards $0.7680/$0.7725 levels. On the downside, a sustained break below $0.7433 support levels will turn bias back to the downside for retesting 0.7365 low.
NZD/USD: The New Zealand dollar scaled a five-month peak on Wednesday. The New Zealand dollar soared as far as $0.6884, having gained 2 percent on Tuesday when short positions were squeezed. It was last at $0.6852, building on momentum from a three- cent bounce since mid-month and on track to post a 4 percent gain in March. Resistance is found at the October peak of $0.6897. A daily close above $0.6750 will drag the parity to test $0.6897 level. Short term bias remains bullish till the time pair holds key support at $0.6668. Key support was found at $0.6585, with resistance at $0.6885 levels.
Equities Recap
The Nikkei 225 index was seen trading 0.63% lower at 16,995.87 points on Wednesday morning in Asia, while Tokyo's broader Topix gauge pared early losses to trade 0.22% lower at 1,374.58 points.
The Shanghai Composite rallied 1.63% to 2,967.74 points in early trade on Wednesday, while Hong Kong's Hang Seng index jumped 1.62% to 20,696.45 points.
South Korea's Kospi index gained 0.31% to trade at 2,001.07 points on Wednesday.
Australia's S&P/ASX 200 index rose 0.01% to 5,005.20 points on Wednesday afternoon in Sydney.
New Zealand's benchmark S&P/NZX 50 index rose 0.44% to 6,705.60 points on Wednesday in Wellington.
Commodities Recap
Oil futures rebounded in Asian trade on Wednesday, buoyed by a less than expected build in crude oil stockpiles last week. A weakening dollar also lent some support but concern that a two-month rally was fading in an oversupplied market put a ceiling on gains. Brent futures climbed 28 cents to $39.42 a barrel as of 0547 GMT after settling down $1.13 in the previous session. U.S. crude rose 38 cents to $38.66 a barrel after ending the previous session down $1.11.
Gold held on to sharp overnight gains on Wednesday, buoyed by a softer dollar and Federal Reserve chair Janet Yellen's remarks that the U.S. central bank should be cautious in raising interest rates. Spot gold had dipped 0.5 percent to $1,236 an ounce by 0305 GMT, after gaining 1.7 percent on Tuesday.
Treasuries Recap
New Zealand government bonds rose, sending yields 3 basis points lower.
The yield on benchmark 10-year Treasury notes stood at 1.810 percent, in Asia, after skidding to a four-week low of 1.805 percent in U.S. trade on Tuesday.
Australian government bond futures rose, with the three-year bond contract 5 ticks higher at 98.080.
