Market Roundup
- Ex-MoF Sakakibara “Mr Yen” sees yen breaking 105.00 in next few months
- Ex-MoF Sakakibara sees yen may rise beyond 100 by year-end
- Japan Chief Cabinet Secretary Suga: G20 pact does not rule out Japan intervention
- Suga: Will take steps as necessary, recent FX moves one-side, speculative
- Suga: Excessive FX volatility, disorderly markets hurt economy
- Japan Feb Machinery orders -9.2%m/m vs 15.0% previous, -12.4% exp
- Japan Feb Machinery orders -0.7%y/y vs +0.9% previous, -2.7% exp
- OECD Secretary General Gurria: Yen seen as safe haven currency
- OECD Gurria: Safe haven status not a state of mind intervention can change
- OECD Gurria: Speaks well for Japan yen is seen as worthy currency
- OECD Gurria: Japan has room to raise sales tax to 15%
- BOJ: Negative rate applies to Y10-30 trln of reserves in April, May
- Beijing risks 'ERM-style' currency crisis as deflation persists - Evans-Pritchard, Daily Telegraph
- ECB/BdF Villeroy: ECB not short on ammunition
- ECB/BoI Visco: Risks of deflationary spiral in Italy
- ECB Mersch: Policy must be proportionate and respect rules
- Germany denies would mull legal action if ECB opts for chopper money
- German criticism of ECB gets louder as politicians say savers are losing out
- German economy gained pace at start of year – Economy Ministry
- UK economy lost steam in Q1, BCC survey shows
- UK PM Cameron urges to submit to MP’s questions on Brexit
- UK Top cabinet job for Boris as part of battle to ‘save Dave’ – Sunday Times
Economic Data Preview
- N/A The Canadian National Revenue Minister Diane Lebouthillier will unveil measures to combat tax evasion and avoidance.
- (0900 ET/1300 GMT) Mexico’s national statistics is likely to report that industrial output increased by the most in more than 3-years the previous month.
- (1901 ET/2301 GMT) The British Retail Consortium will release its Retail Sales Monitor for the month of March. The indicator stood at 0.1 percent in the previous month.
Key Events Ahead
- (0925 ET/1325 GMT) Federal Reserve Bank of New York President William Dudley speaks before the Association for Neighborhood and Housing Development Annual Community Development Conference in New York.
- (1300 ET/1700 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in a moderated question-and-answer session before a community forum hosted by the Federal Reserve Bank of Dallas, in Ruston, Louisiana.
FX Beat
USD: The greenback skidded against the yen, falling below 108 yen to a new 17-month low. Against a basket of currencies, the dollar index stood at 94.20.
EUR/USD: The euro trades around 1.1391, back above 1.1400 levels and not far from last week's high of 1.1454, its highest since October. The pair is consolidating in narrow range between 1.14540 and 1.13375 for the past two trading session. The major resistance is around 1.1460 and any break above confirms minor trend reversal, a jump till 1.1500/1.1545 is possible. On the lower side major support is around 1.1320 and break below targets 1.1280/ 1.1250/1.1200. Major trend reversal is only below 1.1050.
USD/JPY: The Japanese yen slightly edged down against its U.S. counterpart after rising more than 0.3 percent to 107.63 yen per dollar. It has gained for three weeks straight and appreciated around 10 percent so far this year against the dollar. The greenback trades 0.2 percent up at 108.25, drifting away from the low struck earlier in the session. The short term trend is slightly bearish as long as resistance 110 holds. On the lower side any break below 107.60 will drag the pair down till 106.5/105. The major resistance is around 110 and break
above targets 111.25/112, while the minor resistance is around 109.25.
GBP/USD: Sterling rose nearly 1 percent against the euro and the dollar as speculators trimmed bets against the pound after European share markets rose. It was trading 0.85 percent up at 1.4240, while against the euro it was higher at 80 pence per euro. This put trade-weighted sterling at 84, well above a 28-month low of 83.3 hit last week. On the higher side major
resistance is around 1.4260 and break above targets 1.4320/1.4380/1.4400 level. Cable faces major support around 1.4170. Any break below 1.4170 will drag the pair down till 1.4100/1.4040. Major trend reversal can happen only below 1.4000 and overall bearish invalidation only if it closes above 1.4400.
USD/CHF: The Swiss franc lost ground against the U.S. dollar, trading around 0.9546 after making a high of 0.9514 per dollar. Intraday bullishness can be seen only above 0.9630 level. Any indicative break above 0.9580 will take the pair till 0.9680/0.9755. On the lower side break below 0.9500 will drag it down till 0.9480/0.9420/0.9390. Overall bearish invalidation can happen only above 0.9800.
AUD/USD: The Australian dollar edged up on the back of commodities price rally, however, gains were muted by a rising yen. The Aussie rose to 0.7578, having dropped 1.6 percent last week in the second-largest weekly loss this year. The short term trend is slightly weak as long as resistance 0.7650 holds. On the higher side major resistance is around 0.7650 and break
above targets 0.7680/0.7725.The minor resistance is around 0.7600, while minor support is around 0.7465 and break below will drag the pair till 0.7400/0.7380.
NZD/USD: The New Zealand dollar trades 0.5 percent higher at 0.6834, from a low of 0.6770 touched on Friday, benefiting from improving oil prices. The kiwi rose to a high of 0.6844 and continues to hover towards it after making a low of 0.6791 earlier in the session. It declined 1.6 percent last week. Immediate resistance is located at 0.6862 (Apr 7 High), while on the downside, support is seen at 0.6784 (20-DMA).
Equities Recap
European shares rebounded following an initial decline amid heightened caution among investors as the yen and gold strengthened.
Europe's FTSEuroFirst 300 index and France's CAC 40 both rose 0.6 percent, Germany's DAX gained 0.9 percent and Britain's FTSE 100 edged up 0.2 percent.
Tokyo's Nikkei ended down 0.44 pct at 15,751.13. MSCI's broadest index of Asia-Pacific shares outside Japan was flat in late trading.
Shanghai Composite index advanced 1.6 pct at 3,033.96 points, while CSI300 index gained 1.4 pct at 3,230.10 points. HK’s Hang Seng index edged up 0.4 pct at 20,440.81 points.
Commodities Recap
Oil prices declined after banks dampened hopes that the result of next Sunday's meeting of producers in Qatar aimed at freezing current output levels would improve the current supply-demand balance. Brent crude futures were at $41.90 a barrel by 1104 GMT, retreating from a 3-week high struck on Friday. U.S. WTI crude also eased to $39.50 a barrel, down 22 cents from the prior session.
Gold prices escalated to their highest in almost 3-weeks, setting the market on a steady course toward $1,300 per ounce, gaining confidence from an ultra-low interest rate environment. Spot gold rose to $1,254.20 an ounce, its highest since March 22 and last stood at $1,249.80 by 1106 GMT.
Treasuries Recap
The U.S. 10-year treasuries yield at stood 1.723 percent versus previous close of 1.722 percent.
German 10-year Bund yields hit their lowest level, declining 2.7 basis point to 0.075 percent, within sight of a record trough of 0.05 percent.
Japanese government bonds were little changed after the Bank of Japan skipped its bond buying operation. The benchmark 10-year JGB, which saw no trade in the morning session, was traded at minus 0.090 percent, down 0.5 basis point from Friday. 10-year JGB futures prices were up 0.02 point at 151.67. The 5-year yield was up 0.5 basis point at minus 0.225 percent.
The 20-year yield declined 1.0 basis point to 0.315 percent, while the 30-year yield dropped 2.5 basis points to 0.395 percent.
Gilts opened 18 ticks higher than the settlement of 121.64 as core markets drew support from soft Japan February Machinery Orders. Buyers extended gains as support on 10-year cash
yields from April 4 gave way at 1.343%.
Australian government bond futures were quiet near 1-month highs, with the 3-year bond contract steady at 98.210. The 10-year contract dropped half a tick lower at 97.5950, while the 20 -year contract eased 1 tick to 97.0100. New Zealand government bonds eased, sending yields around 3 basis points higher across the curve.
