Market Roundup
- Currency fluctuations hit more No American firms’ earnings.
- Japan Fin Min Aso – Will act vs FX moves as needed if speculation gets out of hand, wants G20 debate on FX, excess volatility-disorderly moves hurt financial stability, tax evasion likely another topic of discussion.
- Japan - sentiment Tankan-ing, economic data tell a spotty story; the markets, a worrying one – Financial Times.
- Institutional investors are too hedged to slow rising yen – Nikkei.
- Japan March bank loans +2.0% y/y to Y498.334 trln, Feb +2.2%, Jan +2.4%.
- Australia March NAB business conditions index +12, confidence +6, Feb +8, +3, conditions best in eight years.
- NZ March REINZ median house prices +5.1% m/m, +3.4% y/y, sales +30.7%, +8.2%, best since ‘07.
Economic Data Ahead
- (0330 ET/0730 GMT) Sweden March CPI, +0.4% m/m, +0.7% y/y eyed; last +0.3%, +0.4%.
- (0330 ET/0730 GMT) Sweden March CPIF, +0.4% m/m, +1.4% y/y eyed; last +0.3%, +1.1%.
- (0430 ET/0830 GMT) UK March CPI, +0.3% m/m, +0.4% y/y eyed; last +0.2%, +0.3%.
- (0430 ET/0830 GMT) UK March –core, +0.3% m/m, +1.3% y/y eyed; last +0.4%, +1.2%.
- (0430 ET/0830 GMT) UK March RPI, +0.3% m/m, +1.4% y/y eyed; last +0.5%, +1.3%.
- (0430 ET/0830 GMT) UK March RPIX; last +0.5% m/m, +1.4% y/y.
- (0600 ET/1000 GMT) US March NFIB business optimism index; last 92.9.
- (0830 ET/1230 GMT) US March export/import prices, -0.2%, +1.0% m/m eyed; last -0.4%, -0.3%.
Key Events Ahead
- N/A France 20 and 50-year OAT syndications.
- N/A Norges Bank Gov Olsen, DepGov Matsen speak in Kongsberg.
- N/A Slovenia GDP, inflation forecasts.
- (0440 ET/0840 GMT) Spain 3 and 9-month treasury bill auctions.
- (0500 ET/0900 GMT) Netherlands E0.75-1.25 bln 2.75% 2047 DSL auction.
- (0505 ET/0905 GMT) Italy E6 bln 12-month BOT auction.
- (0530 ET/0930 GMT) Germany E500 mln 0.1% 2046 index-linked Bund auction.
- (0530 ET/0930 GMT) ECB zero% 7-day refi, E55 bln allotment eyed, E56.0 bln maturing.
- (0540 ET/0940 GMT) Belgium 3 and 12-month treasury certificate auctions.
- (0900 ET/1300 GMT) Philly Fed Harker speech in Philadelphia.
- (1200 ET/1600 GMT) World Bank Pres Kim speaks at Washington, DC IBD event, various forums.
- (1500 ET/1900 GMT) SF Fed Williams speaks at San Francisco conference.
- (1600 ET/2000 GMT) Richmond Fed Lackers speaks aqt UNC Wilmington.
FX Recap
USD: The U.S. dollar remained on the defensive on Tuesday, after carving out a fresh low on the break of a technical barrier overnight as momentum sellers joined in the fray. The dollar index was swept to a near eight-month low of 93.748 on Monday as the October trough of 93.806 gave way. It has since drifted back to 94.015 in early Asia.
EUR/USD: The euro, which touched a six-month high of $1.1454 last Thursday, was at $1.1406. Pair remains well supported above $1.14 marks and trading around $1.1411 mark. Intraday bias remains bullish till the time pair holds key support level at $1.1314. A daily close above key resistance at 1.1402 will drag the parity up towards $1.1469 marks. On the down side, key support level is seen at $1.1159/ $1.1057 marks.
USD/JPY: The Japanese Yen breaks key resistance at 108.04 and trading around 108.32 marks. On the top side, key resistance levels are seen at 109.67/112.60/114.87/115.96 levels. A daily close below key support level at 108.04 will drag the parity down towards 107.51 marks. Japanese authorities on Monday warned the yen moves were "one-sided and speculative" and that the government stood ready to intervene to weaken the currency.
GBP/USD: The sterling climbed to a high of $1.4287 and was last at $1.4245. The sterling erases previous loss against US dollar and supported above $1.42 marks. A sustained break below key support $1.4108 level will drag the parity down at $1.4057 marks. A daily close above $1.4357 will take the parity up towards key resistances at $1.4504/$1.4602.
AUD/USD: The Australian dollar popped to $0.7645, from $0.7596 early, nearing a nine-month peak of $0.7723 touched late March. Pair remains well supported above 0.7600 marks and trading around 0.7614 levels. Intraday bias remains bullish till the time pair holds key support at $0.7510 levels. On the other side, a sustained close above $0.7672 will drag the parity up towards $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. Today Australia released NAB business confidence data with positive numbers at 6 m/m vs 3 m/m previous release.
NZD/USD: The New Zealand dollar was steady at $0.6869, but up from a low of $0.6792 on Monday. The New Zealand dollar rose 0.2 percent to $0.6811, from a low of $0.6773 touched on Friday, benefiting from improving oil prices. It fell 1.6 percent last week. Short term bias remains bullish till the time pair holds key support at $0.6758. Key support was found at $0.6750, with resistance at $0.7002 levels.
Equities Recap
The Nikkei 255 index traded 1.20% higher at 15,940.54 points, while the broader Topix gauge sprung up 1.48% to 1,298.68 points.
Hong Kong Hang Seng index rose 0.33% to 20,509.83 points in early trade, while the Shanghai Composite index fell 0.41% to 3,021.62 points and Korea's Kospi index rose 0.30% to 1,976.39 points.
Australia's benchmark S&P/ASX 200 index was trading 0.71% higher to 4,966.40 points on Tuesday.
In New Zealand the benchmark S&P/NZX 50 index was trading 0.25% lower at 6,708.24 points.
Commodities Recap
Oil prices dipped on Tuesday, but both U.S. and international crude futures held above $40 per barrel ahead of a meeting of major producers to discuss freezing output levels to rein in ballooning oversupply. U.S. West Texas Intermediate (WTI) crude futures were trading at $40.24 per barrel at 0356 GMT, down 12 cents from their last settlement. International Brent crude futures were at $42.69 a barrel, 14 cents below their last close, but only 37 cents off their 2016-high reached the previous day.
Gold jumped to a three-week peak on Tuesday on expectations the Federal Reserve will not raise U.S. interest rates soon and as the dollar traded close to its lowest in nearly eight months, though profit-taking chipped away at some recent gains. Spot gold rose to $1,259.66 an ounce early on Tuesday, its highest since March 18. However, it pared gains to trade down 0.3 percent at $1,254 an ounce by 0306 GMT, on profit-taking following a 1.4-percent overnight gain.
Treasuries Recap
Australian government bond futures were off one-month highs, with the three-year bond contract 5 ticks lower at 98.160. The 10-year contract fell 6 ticks to 97.5350, while the 20-year contract shed 3.5 ticks to 96.9700.
New Zealand government bonds eased, sending yields around 3 basis points higher across the curve.
