Market Roundup
- Japan may resurrect Abenomics with big stimulus package in spring – Barron’s.
- BoJ Gov Kuroda (in Diet) – NIRP will impact economy-prices but with time lag, can’t solve all Japan problems with monetary policy, G20 agreed to use all policy tools available.
- BoJ Policy Board March 14-15 minutes – Heated debate on negative rate policy, drawbacks, markets unstable, aiming for surprise effect heightened concerns, rolling back NIRP would erode confidence in BoJ, balance of risks to Japan, overseas economies tilted to downside.
- The irony of negative rates: Japanese investors flock to Europe and vice versa.
- 62% of Japanese firms think BoJ NIRP bad decision, 3/4 want more economic stimulus, divided on whether govt should press ahead with sales tax hike.
- New Zealand February trade surplus NZ$339 mln, NZ$50 mln eyed, imports NZ$3.91 bln, exports NZ$4.25 bln, NZ$3.94 and 4.05 bln eyed, yr-to-Feb deficit NZ$3.32 bln.
Economic Data Ahead
- (0300 ET/0700 GMT) Germany April GFK consumer sentiment index, 9.5 eyed; last 9.5.
- (0345 ET/0745 GMT) France March business climate index, 103.0 eyed; last 103.0.
- (0430 ET/0830 GMT) Sweden February PPI; last -1.0% m/m, -3.1% y/y.
- (0500 ET/0900 GMT) Italy January industrial orders/sales; last -2.8% m/m, +1.5% y/y, -1.6%, -3.0%.
- (0530 ET/0930 GMT) UK February retail sales, -0.7% m/m, +3.8% y/y eyed; last +2.3%, +5.2%.
- (0530 ET/0930 GMT) UK February retail - ex-fuel, -1.0% m/m, +3.4% y/y eyed; last +2.3%, +5.0%.
- (0530 ET/0930 GMT) UK February retail BBA mortgage approvals; last 47.51k.
- (0600 ET/1000 GMT) Italy January retail sales; last -0.1% m/m, +0.6% y/y.
- (0700 ET/1100 GMT) Italy February trade balance, non-EU – flash; last E500 mln deficit.
- (0730 ET/1130 GMT) US February build permits – revised; flash 1.17 mln AR, -3.1% m/m.
- (0830 ET/1230 GMT) US February durable goods orders, -2.9% m/m eyed; last +4.7%.
- (0830 ET/1230 GMT) US February ex-transport, -0.2% m/m eyed; last +1.7%, ex-def +4.3%.
- (0830 ET/1230 GMT) US February non-def cap goods ex-air, -0.1% m/m eyed; last +3.4%.
- (0830 ET/1230 GMT) US weekly initial jobless claims, 268k eyed; last 265k.
- (0945 ET/1345 GMT) US March Markit composite, services PMI – flash; last 50.0, 49.7.
- (1100 ET/1500 GMT) US March KC Fed composite, manufacturing indices; last -12, -8.
Key Events Ahead
- N/A UK DMO GBP0.5/1.5/2.0 bln 1/3/6-month treasury bill auctions.
- (0245 ET/0625 GMT) SNB ’15 annual report release.
- (0500 ET/0900 GMT) ECB economic bulletin.
- (0600 ET/1000 GMT) Italy E250-750 mln 2.55%/3.1% 2026/2041 index-linked BTP auctions.
- (0600 ET/1000 GMT) Italy E2.5-3 bln 2018 CTZ auction.
- (0700 ET/1100 GMT) UK ChancExch Osborne parliamentary testimony on EU membership.
- (0815 ET/1215 GMT) St Louis Fed Bullard speech in New York.
- (1600 ET/2000 GMT) US Tsy Lago speaks at Washington, DC conference.
FX Recap
USD: The dollar climbed to a one-week high against a basket of currencies on Thursday while awaiting data due later in the session that could back some Federal Reserve officials' relatively optimistic views on the U.S. economy. The dollar index touched 96.235; it’s highest since March 16. The U.S. currency was on the front foot after St. Louis Fed President James Bullard added his support to the possibility of more U.S. interest rate hikes this year.
EUR/USD: The euro dipped 0.1 percent to $1.1172, hovering near a one-week trough of $1.1159 struck on Wednesday. Pair breaks $1.12 marks and trading around $1.1171. Intraday bias remains bearish till the time pair holds key resistance level at $1.1284. A daily close above key resistance 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: Japanese Yen was trading near a six-day high of 112.905 overnight. The greenback retreated to a 17-month low of 110.67 last week after the Fed reduced its rate hike projections for this year. Japanese Yen breaks key resistance at 112.60 and supported around 112.84 levels. On the top side, key resistance levels are seen at 114.87/115.96 levels. A daily close below key support level at 111.31 will drag the parity down towards at 110.66/ 108.75/107.51 marks thereafter.
GBP/USD: Sterling came under more selling pressure on Thursday on a view that the deadly attacks in Brussels would boost the campaign to take Britain out of the EU and with latest opinion polls showing a tight race between those who want to leave and those who want to stay in the bloc. Three-month euro/sterling equivalents rose to 13.50 percent, the highest since April 2009. Sterling extended earlier losses against US dollar and supported around $1.4100 marks. Pair breaks key support at $1.4146, turns the bias slightly bearish and dragged the parity down below $1.4100 marks. On the other side, a daily close above $1.4757 will take the parity up towards key resistances at $1.4504/$1.4602.
AUD/USD: The Aussie lost 0.3 percent to $0.7506, pulling further away from an eight-month peak of $0.7681 scaled last week. A sharp drop in crude oil prices took a toll on commodity-linked currencies like the Australian and Canadian dollars. Australian dollar was trading 0.37% lower at $0.7503 on Thursday; it’s lowest in a week. Intraday bias remains bearish till the time pair holds key resistance at $0.7648 levels. A sustained close above it will drag the parity 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: The New Zealand dollar was on track to post its fifth straight day of losses, dipping 0.1 percent to $0.6704 to move away from a near three-month high of $0.6875 reached last week. New Zealand's trade surplus expanded from a revised $13 million in January to $339 million last month, beating the $57 million surplus forecast by markets. Pair breaks key support level at $0.6750 marks and trading around $0.6695 levels. Short term bias remains bearish for the moment. Key support was found at $0.6585, with resistance at $0.6885 levels.
Equities Recap
The Japan’s Nikkei 225 index trading 0.14% lower at 16,979.38 points and the Topix gauge sliding 0.57% to 1,356.20 points.
Shanghai Composite fell 0.91% to 2,981.54 points and Hong Kong's Hang Seng index shed 1.10% to trade at 20,399.96 points.
South Korea's Kospi index fell 0.30% to 1,989.89 points on Thursday.
Australia’s S&P/ASX 200 index was trading 1.11% lower to 5,085.00 points on Thursday afternoon in Sydney.
New Zealand's S&P/NZX 50 index was trading largely flat at 6,669.47 points on Thursday afternoon in Wellington.
Commodities Recap
U.S. oil prices fell in Asian trading on Thursday, adding to a slump in the previous session, after stockpiles rose for the sixth week to another record, sapping the strength of a two-month rally in prices. U.S. crude futures were down 10 cents at $39.69 a barrel at 0302 GMT, trading further below the important $40 level. It closed down $1.66, or 4 percent, at $39.79 a barrel on Wednesday. That marked the sharpest one-day drop for the front-month contract in U.S. crude since Feb. 11. Brent crude futures were up 7 cents at $40.54 a barrel, after trading lower earlier in the session. They finished the last session down $1.32, or 3.2 percent, at $40.47 a barrel.
Spot gold steadied on Thursday, but was still facing its biggest weekly loss since early November after slipping around 2 percent in the previous session as hawkish comments by Federal Reserve officials stoked a recovery in the dollar. Spot gold was little changed at $1,218.30, down 0.1 percent by 0103 GMT. Gold on Wednesday fell as low as $1,215 an ounce, its weakest since Feb. 26 and was on track for a 2.9-percent weekly loss ahead of the Easter holiday break which starts on Friday. U.S. gold slipped 0.4 percent to $1,218.80.
Treasuries Recap
New Zealand government bond prices edged up, sending yields 2.5 basis points lower along the curve.
Australia three-year bond futures rose 4 ticks to 98.020, while the 10-year contract put on 6.5 ticks to 97.4150.
The Bank of Japan said it offered in the afternoon to lend 2.5477 trillion yen in Japanese government bonds (JGBs) as a secondary source of supply.
