BOJ LIKELY TO DEBATE POSSIBILITY OF EASING MONETARY POLICY AT APRIL 27-28 RATE REVIEW – SOURCES

Market Roundup

Impact of China on advanced economies set to grow – Financial Times

China bank regulator says lenders should tighten overseas risk control 

Nikkei 225 Index closes down 2.42%

BoJ Gov Kuroda – QQE exerting intended effects, still half-way to inflation target 

BoJ Sakurai – Warns against frequent policy changes. NIRP not wrong 

Japan Fin Min Aso – Frontload FY ’16 budget spending for public works to spur growth 

Japan Chief Cabinet Sec Suga: Not right time to discuss extra FY ’16 budget 

Japan Suga: Continue to monitor markets & take appropriate action if needed 

Japan Suga: Volatile FX moves can damage economy 

Japan Econ Min Ishihara: Japan not in deflation but hasn’t escaped deflation risk 

RBA holds OCR at 2%, continued low inflation provide scope for easier policy 

RBA lays out its (limited) policy options 

Azerbaijan reports more losses as Nagorno-Karabakh fighting rumbles on 

India cuts repo rate by 25bp to 6.5%, lowest since 2011 

Eurozone Mar Markit services final PMI 53.1 vs 54.0 prev, 54.0 exp

Eurozone Mar Markit comp final PMI 53.1 vs 53.7 previous, 53.7 exp

Eurozone Feb Retail sales 0.2%m/m vs 0.4% previous, 0.0% exp

Eurozone Feb Retail sales 2.4%y/y vs 2.0% previous 1.9% exp

German Feb Industrial orders -1.2% vs -0.1% previous, 0.2% exp

German Mar Markit services PMI 55.1 vs 55.5 previous, 55.5 exp

New US inversion rules threaten Pfizer-Allergan deal 

UK Markit/CIPS services PMI 53.7 vs 52.7 prev, 53.7 exp

ICE seals funds for GBP 10bn London Stock Exchange bid – Sky News

51% of Brits want to remain in EU, 43% leave, 5% undecided – ORB poll for Telegraph   

Economic Data Ahead

(0830 ET/1230 GMT) The U.S. trade deficit is likely to have widened to $46.2 billion in February from $45.7 billion in January, as a rise in imports reversed a rebound in exports,
suggesting a slow economic growth in the first quarter. 

(0830 ET/1230 GMT) The Statistics Canada releases trade balance figures for the month of February. The trade deficit is expected to have widened to C$900 million from C$660 million
in January.

(0945 ET/ 1345 GMT) The Markit Economics will release its Services Purchasing Managers Index (PMI) for the month of March. The index stood at 51 in the month of February. 

(1000 ET/1400 GMT) The Institute for Supply Management is likely to report that its non-manufacturing activity index rose to 54 in March from 53.4 in February. 

(1630 ET/2030 GMT) API reports its weekly crude oil stocks for the week ending April 1.

(1901 ET/2301 GMT) The British Retail Consortium releases its Shop Price Index for the month of February. The index declined -2 percent in the previous month. 

Key Events Ahead

(0945 ET/1345 GMT) NY Fed purchases up to $1.85 bn 30-year Fannie Mae / Freddie Mac securities

(1545 ET/1945 GMT) Bank of Canada Senior Deputy Governor Carolyn Wilkins will speak on the topic of China's economic transition and what it means for Canada in Vancouver. 

FX Beat 

USD: The dollar was down 0.9 percent at 110.30 yen, its lowest since Oct. 31, 2014 and down 8.2 percent on the year. Against a basket of currencies, the dollar index stood at 94.79, up by 0.24 percent.

EUR/USD: The euro lost ground against the dollar to trade at 1.1359, well below a 5-1/2-month peak of 1.1438 touched last week. The pair has retreated after making a high of 1.1405.
Intraday trend is still weak as long as resistance 1.1405 holds. Any break above 1.1405 will take the major to next level 1.14380. The short term trend is reversal only above 1.1380. On
the lower side any break below 1.1320 will drag the pair down till 1.1280/1.1200. Against the yen, the euro fell 1.2 percent to a 2-week low of 125.30 yen.

USD/JPY: The Japanese yen rose to its highest in 17 months against its U.S. counterpart as sentiment in stock and commodity markets soured, driving investors to seek traditional
safe-haven currencies and assets. The pair trades 0.77 percent lower at 110.46 yen, having gone as low as 110.26. It has broken major support 110.60. The short term trend is slightly
bearish as long as resistance 112 holds. On the lower side any break below 110.60 will drag the pair down till 110/108.85. The major resistance is around 112 and break above targets
112.60/113.

GBP/USD: Sterling declined with a slight improvement in a monthly business sentiment indicator, however, too little to settle nerves over Britain's economic performance. Sterling
dropped 0.35 percent to 1.4211 and was 0.15 percent lower at 79.07 pence per euro. Trade-weighted sterling, stood at 84.4, off a more than 2-year low of 84.1 hit on Monday. The cable has
made a high of 1.43215 and declined from that level. The pair has broken major support and 1.4250 and declined till 1.42250 level. The short term trend is still weak as long as
resistance 1.4320 holds. Any break above 1.4320 will take the major 1.4380/1.4400. On the lower side any break below 1.4250 will drag the pair further down till 1.4170/1.4100.

USD/CHF: The Swiss france trades flat at 0.9586, having touched a low of 0.9604 against the U.S. dollar, earlier in the session. The short term trend is slightly bullish as long as support
0.9550 holds. Major support is around 0.9550 and any break below 0.9580 will drag the pair down till 0.9530/0.9475 in short term. On the higher side any trend reversal can happen only
above 0.9800. The minor resistance is around 0.9630 and break above targets 0.9680/0.9720 level.

AUD/USD: The Australian dollar was down 0.8 percent at 0.7539 having risen after the Reserve Bank of Australia left interest rates unchanged at a record low 2 percent as widely
expected. Aussie has broken major support around 0.7570 and declined till 0.7525. The short term trend is slightly weak as long as resistance 0.7600 holds. On the higher side major
resistance is around 0.7600 and break above targets 0.7680/0.7725. The minor support is around 0.7500 and break below will drag the pair till 0.7470/0.7435. 

NZD/USD: The New Zealand dollar follows its fellow antipodean and trades 0.88 percent lower at 0.6770, having touched session's low of 0.6761. Traders continue to remain bearish on
the pair, following previous three sessions trend. Immediate support is located at 0.6758 (20-DMA), while on the upside, resistance is seen at 0.6864 (5-DMA). 

Equities Recap

European shares declined as falling commodity prices and weaker U.S. dollar continued to weigh on investors sentiment.

Europe's FTSEurofirst 300 share index dropped 1.5 percent. Germany's DAX index slid 2.2 percent, Britain's FTSE 100 edged down 0.8 pct, France's CAC 40 lost 1.4 pct.

Tokyo's Nikkei slumped 2.42 pct at 15,732.82. MSCI's broadest index of Asia-Pacific shares outside Japan was earlier down 1.3 percent.

Shanghai Composite index gained 1.4 pct at 3,053.07 points, while CSI300 index rose 1.3 pct at 3,264.49 points. HK’s Hang Seng index closed down 1.6 pct at 20,177.00 points.

Commodities Recap 

Oil slipped to a 1-month low after a surprise fall in gasoline demand in the United States and on doubts whether oil producers can agree an output freeze to dampen a global supply glut.
Brent crude, the global oil price benchmark, was down 25 cents at $37.44 a barrel at 1041 GMT, its lowest since March 4, while U.S. futures declined by 21 cents to $35.49, also a 1-
month low.

Gold advanced by more than 1 percent to a session-high of $1,231.23 an ounce following a 2-day decline. It had dropped 1.4 percent in the past two sessions.

Treasuries Recap

The U.S. 10-year Treasury yields fell nearly 5 basis points to 1.731 percent, their lowest since March 1.

The core-European government bonds yields are 3.75bp lower with German 10-year Bund yields, the benchmark for euro zone borrowing costs, 0.92 percent down, its lowest in almost a
year and June Bund futures make a new contract high at 164.28.

Japanese government bond prices were down, although a steady 10-year bond auction outcome limited market losses. The benchmark 10-year JGB yield was up 1.5 basis points at
minus 0.070 percent after rising to as much as minus 0.065 percent. The 20-year bonds yielded 0.355 percent, up half a basis point, after rising to as high as 0.360 percent.

Gilts opened 27 ticks higher than the close of 120.99 as markets expressed caution due to mixed messages from the Fed ahead of the FOMC minutes tomorrow. Buyers made early gains
and extended the move higher as recent support on 10-year cash gave way at 1.378%

Australian government bond futures were little changed with the 3-year bond contract flat at 98.150, while the 10-year contract edged up 1 tick to 97.5450. New Zealand government bond prices were a touch firmer, pushing yields 2 basis points lower.