Market Roundup
- St Louis Fed Bullard – Rate hike possible in April or June.
- US NABE survey – GDP forecasts for ’16, ’17 lowered, two Fed rate hikes.
- CFTC IMM CTA data week-ended March 22 – Net JPY long positions up to 53,346 contracts, EUR shorts off to 66,053, GBP shorts jump to 37,723, AUD longs up to 18,030.
- Japan CabSec Suga – Not true government decided to delay sales tax hike, no change in stance, no delay unless major financial crisis.
- China Money –Investors lose appetite for Yuan assets.
- China CSRC – To investigate new types of grey margin finance.
- China Jan-Feb industrial profits +4.8% y/y, CNY780.7 bln, despite weakening business conditions, slowing overall growth, Dec -4.7% y/y.
Economic Data Ahead
- (0830 ET/1230 GMT) US February personal consumption, +0.1% m/m sa eyed; last +0.5% sa, +0.4% nsa.
- (0830 ET/1230 GMT) US February personal income, +0.1% m/m eyed; last +0.5%.
- (0830 ET/1230 GMT) US February PCE price index; last +0.1% m/m, +1.3% y/y.
- (0830 ET/1230 GMT) US February core, +0.2% m/m eyed; last +0.3% m/m, +1.7% y/y.
- (0830 ET/1230 GMT) US February trade balance – advance; last US$62.23 bln deficit.
- (1000 ET/ 1400 GMT) US February pending home sales, +1.0% m/m eyed; last -2.5%, index 106.0.
- (1030 ET/1430 GMT) US March Dallas Fed manufacturing business index; last -31.8.
- (1300 ET/1700 GMT) US February Dallas Fed PCE; last +2.2%.
Key Events Ahead
- Most major centers in region, worldwide still closed for Easter Monday.
- Tokyo, Singapore and United States markets open.
- (0430 ET/0830 GMT) BoE FPC statement.
- (0515 ET/ 0915 GMT) SF Fed Williams speech at Singapore National University.
- (0700 ET/1100 GMT) ECB/Slovaikia CB Makuch press conference on latest economic forecasts.
- N/A CBO analysis of ’17 Obama budget.
- (1130 ET/1530 GMT) FOMC Chair Yellen at New York Economic Club luncheon/16:00 NY Fed Dudley.
- (1300 ET/1700 GMT) Dallas Fed Kaplan speaks in Austin, Texas/20:00 Speaks at UT Austin.
FX Recap
USD: The dollar nudged up against the Yen on Monday, after rebounding last week following a series of comments from U.S. Federal Reserve officials who supported the case for more interest rate hikes than markets had anticipated. Such views helped the greenback recover from a knock earlier this month when the Fed halved its rate hike expectations to two from four this year. The dollar index, which measures the dollar's value against a basket of six major currencies, touched a high of 96.399 earlier on Monday, its highest level since March 16. It last stood at 96.327.
EUR/USD: The euro held steady at $1.1163 following a loss of 0.9 percent last week. Pair remains supported around key support at $1.1159 marks and trading around $1.1165. Intraday bias remains bullish till the time pair holds key support level at $1.1159. A daily close above key resistance at 1.1217 will drag the parity towards $1.1342/ $1.1376 marks. On the down side, key support level is seen at $1.1159/ $1.1057 marks.
USD/JPY: The Japanese yen falls 0.4 percent and trading around 113.60 marks. US dollar had gained 1.4 percent versus the yen last week, pulling away from a 17-month low of 110.67 plumbed mid-months. Japanese Yen breaks key resistance at 112.60 and supported around 113.48 levels. On the top side, key resistance levels are seen at 114.87/115.96 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.
GBP/USD: Sterling steadied on Monday after falling to its weakest on a trade-weighted basis in two years, helped by investors squaring positions before the long Easter weekend and a marginally more optimistic reading of British retail sales. Pair hovers around key support levels at $1.4146 and intraday bias turns neutral for the moment. A sustained break below key support level will drag the parity down at $1.4057 marks. On the other side, a daily close above $1.4357 will take the parity up towards key resistances at $1.4504/$1.4602.
AUD/USD: The Australian dollar edged up 0.1 percent to $0.7511. The Aussie had lost 1.4 percent last week and pulled away from an eight-month high of $0.7681 set in mid-March, as commodity prices slid sharply from their recent peaks. Australian dollar remains supported above $0.7500 and trading at $0.7525 on Friday. Intraday bias remains bearish till the time pair holds key resistance at $0.7553 levels. A sustained close above it will drag the parity up towards 0.7725 levels. On the downside, a sustained break below $0.7533 support levels will turn bias back to the downside for retesting 0.7365 low.
NZD/USD: Kiwi erases previous loss against US dollar and edged up 0.3 percent to $0.6696. Pair breaks key support level at $0.6750 marks and trading around $0.6690 levels. 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 Japan’s Nikkei 225 index was trading 0.77% higher at 17,134.38 points.
China’s CSI300 was trading 0.52% higher at 3214.59 points.
South Korea's Kospi index was trading 0.10% higher to 1,985.89 points on Monday.
Taiwan index was trading 0.10% lower at 8695 points at the start of new week.
Commodities Recap
Oil prices rose on Monday after a three-day break, adding to gains in recent weeks as optimism holds that a production freeze among major producers may be implemented, but volumes were thin as a number of markets remain on holiday for Easter. U.S. crude's front-month contract was up 50 cents at $39.96 a barrel at 0622 GMT. Last week, the contract rose 2 cents, finishing up for a sixth straight week. Brent's front-month climbed 45 cents to $40.89 a barrel. Last week, it fell 76 cents, or nearly 2 percent, its first decline in five weeks. Oil prices have risen about 50 percent from multi-year lows hit in January on glut worries.
Gold dropped to its weakest in a month on Monday, pressured by a firmer dollar following hawkish comments from U.S. Federal Reserve officials that suggested at least two interest rate hikes this year, with the first potentially coming next month. Spot gold was down 0.5 percent at $1,209.85 an ounce by 0237 GMT. It touched a session-low of $1,208.90, its cheapest since Feb. 23. The metal lost 3 percent last week. U.S. gold for April delivery slipped 0.9 percent to $1,210.40 an ounce. Trading was likely to remain slow on Monday with other markets, including London, still shut for Easter holidays.
Treasuries Recap
BOJ offers to lend Y4.95 trln of JGBs on spot basis through 3/29 as a secondary source of JGBs. Yields on Japanese government bonds of up to 12 years to maturity fell below zero recently, Japanese banks and life insurers have flocked into foreign bonds. Most of them, however, use currency swaps or forwards to hedge the risk of investing in another currency.
South Korea sells 20-year treasury bonds at average yield of 1.895 pct.
