Market Roundup
- China April Trade Balance USD, +28.78 bln, forecast +24.70 bln, last -4.98 bln.
- China April Exports YY, +12.9%, forecast +6.3%, last -2.7%.
- China April Imports YY, +21.5%, forecast +16.0%, last 14.4%.
- Trump to unveil Iran decision Tuesday; Europeans move his way.
- White House says China trade talks to resume in Washington next week.
- Tax cuts, spending boost likely in budget as Australia eyes return to surplus.
- Australia March Retail Sales MM, 0.0%, forecast 0.3%, previous 0.6%.
- Australia Q1 Retail Trade, 0.2%, forecast 0.6%, previous 0.9%.
- Japan March household spending -0.1% m/m, -0.7% y/y, economy likely slowed in Q1.
- Japan and North Korea should talk, South Korea's Moon says –Yomiuri.
- Japan to set new debt/GDP ratio fiscal reform goal – Yomiuri.
Economic Data Ahead
- (0330 ET/0730 GMT) UK April Halifax House Prices MM, forecast -0.2%, last 1.5%.
- (0330 ET/0730 GMT) UK April Halifax House Price 3M/YY, forecast 3.3%, last 2.7%.
Key Events Ahead
- (0315 ET/0715 GMT) Fed's Powell speaks in Zurich, Switzerland.
FX Recap
USD: The dollar index against basket of six major currencies was 0.1 percent higher at 92.864 after reaching 92.974 overnight, its highest since Dec 28.
EUR/USD: The euro was effectively flat at $1.1920 after plumbing $1.1897 the previous day, its lowest in more than four months. Intraday bias remains slightly bearish till the time pair holds key resistance at $1.1988 mark. A consistent close below $1.1922 will drag the parity down towards key supports around $1.1745 levels. Alternatively, reversal from key support will take the parity higher towards key resistances around $1.1988, $1.2032, $1.2240, $1.2345 and $1.2482 marks respectively.
USD/JPY: The yen remains almost unchanged against U.S. dollar despite lower than expected household spending data. It made intraday high at 109.14 and low at 108.85 levels. A sustained close above 109.86 is required to take the parity higher towards key resistance around 112.96 marks. Alternatively, a daily close below 108.80 will drag the parity down towards key supports around 108.54, 106.71 and 105.32 marks respectively.
GBP/USD: The sterling was trading marginally higher against U.S. dollar. The pair was currently trading around $1.3583 marks. On the top side key resistance was seen at $1.3665 and support was seen at $1.3302 mark. A sustained close above $1.3572 requires for upside rally. Alternatively, key support was seen at $1.3185 levels.
AUD/USD: The Australian dollar took a knock on Tuesday when unexpectedly weak readings on retail sales cast doubt on the strength of the domestic economy, suggesting a government budget due later in the day would do well to offer some fiscal stimulus. The Aussie eased around a fifth of a U.S. cent to $0.7503 in the wake of the data, though support was lined up at $0.7490 and the recent 11-month trough of $0.7472.
NZD/USD: The New Zealand dollar was pinned at $0.7022 having taken a dip of its own when a survey of inflation expectations showed a pullback. Support lies around $0.6985 and $0.6832 levels respectively with resistance at $0.7120. Intraday bias remains neutral for the moment.
Equities Recap
Japan’s Nikkei was trading 0.18 pct higher at 22,507.55 points.
Seoul shares open up 0.29 pct.
Shanghai composite index to open flat at 3,135.30 points and China's CSI300 index to open flat at 3,834.61 points.
Australia's S&P/ASX 200 index was up 0.16 pct at 6,094.50 points in early trade.
Hong Kong’s Hang seng was trading 1.17 pct higher at 30,344.50 points.
Taiwanese stock was trading around 0.77 percent higher at 10,686.75 points.
India’s NSE Nifty was trading around 0.14 percent higher at 10,730.80 points while BSE Sensex was trading 0.20 points higher at 35,274.88 points.
Commodities Recap
Oil prices retreated from 3-1/2 year highs on Tuesday as investors waited on an announcement by President Donald Trump on whether the United States will re-impose sanctions on Iran. U.S. West Texas Intermediate (WTI) crude futures had dropped 73 cents, or 1 percent, to $70 a barrel by 0240 GMT. At one point they fell below $70, after settling above that level for the first time since November 2014 on Monday. Brent crude futures were down 63 cents, or 0.8 percent, at $75.54, having jumped 1.7 percent to settle at $76.17 a barrel in the previous session.
Gold prices remained subdued on Tuesday as the dollar held steady near its 2018 high on the relative strength of the U.S. economy. Spot gold was down 0.1 percent at $1,312.66 per ounce as of 0343 GMT, after closing marginally lower in the previous session. U.S. gold futures for June delivery were about 0.1 percent lower at $1,313.40 per ounce.
Treasuries Recap
Yields on U.S. 10-year paper rose above those in Australia in February and the U.S. government currently has to pay 21 basis points more to borrow.
Australian government bonds gained on Tuesday following weaker-than-expected March retail sales data, hinting that weaker consumer spending could drag overall economic activity. That dragged the benchmark 10-year Note yield to over 3-week low of 2.740. The yield on Australia’s benchmark 10-year Note, which moves inversely to its price, fell over 2 basis points to 2.740 percent, the yield on the long-term 30-year Note dipped 3 basis points to 3.251 percent and the yield on short-term 2-year slumped nearly 1/2 basis point to 2.023 percent by 03:00 GMT. Australian government bond futures edged up on Tuesday, with the three-year bond contract gaining 1 tick to 97.810. The 10-year contract rose 1.5 ticks to 97.2450.
