Market Roundup
- Ted Cruz wins Wisconsin Republican primary, Saunders Democratic primary
- BoC Wilkins: China slowing to more sustainable pace inevitable & desirable, problems possible
- Glencore sells agri unit stake for $2.5bn to Canadian pension fund
- The need to look beyond BoJ FX intervention
- Japan Feb Coincident indicator -3.2 vs 2.9 previous
- Japan Leading indicator -2.0 vs -0.4 previous
- Japan PM Abe: Must definitely avoid competitive FX devaluation
- Abe: Refrain from arbitrary intervention, FX stability important – WSJ
- Japan LDP Yamamoto: Consumer spending similar to post-Lehman crisis period
- Japan LDP Tachibana also says 'better to wait and assess the situation before intervening
- Chief Cabinet Secretary Suga: Watching FX, will respond as appropriate
- Yamamoto: Japan should lower and not up sales tax, Suga disagrees
- German Feb Industrial output -0.5%m/m vs 3.3% previous, -1.8% exp
- ECB excludes Catalonia from its support, re: bond buying – El Mundo
- 44% of Brits want to remain in EU, 43% want to leave, 13% don’t know-ICM poll
- Kenyan CB Gov: A potential Brexit will be a horrendous blow to everyone, poses big risk
- UK PM Cameron & family not set to benefit from offshore funds-spokesman
Economic Data Ahead
- (0930 ET/1330 GMT) Brazil's automakers' association releases automobile production figures for the month of March. Automobile output dropped 12.5 percent and sales declined 5.5 percent in February.
- (1000 ET/1400 GMT) The Ivey Purchasing Managers Index is likely to show that purchasing activity in Canada grew to 55.0 in March after slowing sharply in the prior month. The seasonally adjusted index declined to 53.4 from 66.0 in January.
- (1030 ET/1430 GMT) The Energy Information Administration reports its Crude Oil Stocks for the week ending April 1.
- (1400 ET/1800 GMT) The U.S. Federal Reserve releases the minutes of its last policy meeting in March.
- (1930 ET/2330 GMT) The Australian Industry Group and the Housing Industry Association will release its Performance of Construction Index for the month of March. The index stood at 46.1 in the previous month.
Key Events Ahead
- (1220 ET/1620 GMT) Cleveland Fed President Loretta Mester speaks on the U.S. and regional economic outlook and monetary policy before a joint luncheon hosted by the Cleveland Association for Business Economics, the CFA Society Cleveland, and the Risk Management Association of Northern Ohio.
- (1730 ET/2130 GMT) St. Louis Fed President James Bullard holds media availability in St. Louis.
- (1830 ET/2230 GMT) St. Louis Fed President James Bullard gives welcome remarks before a Homer Jones Memorial Lecture event.
- (2000 ET/0000 GMT) Dallas Fed President Robert Kaplan participates in a moderated question-and-answer session before the World Affairs Council of Dallas/Fort Worth, in Dallas.
FX Beat
USD: The dollar hovered near a 17-month low against the yen after declining overnight on comments by Japan's prime minister that suggested Tokyo was cautious about reining in the yen's rise. Against a basket of currencies, the dollar index trades 0.43 percent up at 95.025
EUR/USD: The euro edged 0.2 percent down to 1.1356, having touched sessions low of 1.13404. It made a high of 1.1387, before falling down to its current levels. The pair has slightlyrecovered after making a low of 1.1335. Intraday trend is still weak as long as resistance 1.1405 holds. Any break above 1.1405 will take it to next level 1.14380. The short term trend is reversal only above 1.1438. On the lower side any break below 1.1320 will drag the pair down till 1.1280/1.1200.
USD/JPY: The Japanese yen remained in bullish form, down less than 0.2 percent against the dollar at 110.33 yen, still within the distance of 109.93, its highest level against the dollar since October 2014. The pair has recovered after making a low of 109.94. The short term trend is slightly bearish as long as resistance 112 holds. On the lower side any break below 110
will drag the pair down till 108.85/108. The major resistance is around 112 and break above targets 112.60/113.
GBP/USD: Sterling stumbled again staying close to the previous day's 1-1/2-year low against the euro on growing concerns over the economic risks posed by the Brexit June referendum. Sterling slipped 0.56 percent to a 2-week low of 1.4067, while against the euro, it edged down 0.3 percent to 80.62 pence. On a trade-weighted basis sterling is at levels last seen in late 2013. The cable has broken minor support 1.4100 and declined till 1.4029. Any break above 1.4050 confirms short term trend reversal, a decline till 1.4000/1.3900. On the higher side any break above 1.4150 will take the g the pair further up till 1.4250/1.4320.
USD/CHF: The Swiss franc lost ground against the U.S. dollar, trading 0.49 percent lower around 0.9604. The pair has slightly recovered after making a low of 0.9545.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 flat at 0.7541, after declining to a low of 0.7510 in the previous session. Aussie has slightly recovered after making a low of 0.7532. 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 resistance is around 0.7570, while minor support is around 0.7500 and break below will drag the pair till 0.7470/0.7435.
NZD/USD: The New Zealand dollar continues its prior four session's bearish trend, trading 0.40 percent lower at 0.6775, however, above previous session low of 0.6758. Traders are likely to remain bearish, as the pair hovers towards session's low 0.6773. Immediate support is located at 0.6766 (20-DMA), while resistance is seen at 0.6835 (Previous Session High).
Equities Recap
European share prices rose as the dollar nudged off lows and oil prices rebounded from their lowest level in over a month.
Europe's FTSEurofirst 300 and Germany's DAX both were 0.2 pct up, while Britain's FTSE 100 and France's CAC 40 both gained 0.3 pct.
Tokyo's Nikkei ended down 0.11 pct at 15,715.36. MSCI's broadest index of Asia-Pacific shares outside Japan had ended the day barely in positive territory after falling to its lowest level since March. 16.
Shanghai Composite index edged down 0.1 pct at 3,050.59 points, while CSI300 index closed down 0.2 pct at 3,257.53 points. HK’s Hang Seng index nudged up 0.2 pct at 20,206.67 points.
Commodities Recap
Crude futures advanced as hopes for an agreement among exporters to freeze output boosted the market, although persistent global oversupply and Iran's plans to boost production pressured physical oil prices. U.S. crude futures gained almost 3 percent, to a high of $37.09 per barrel before easing to $36.90 per barrel at 1046 GMT. International Brent futures rose as high as $38.82 before easing to $38.73 a barrel, still up 54 cents from their last settlement.
Gold largely held onto sharp overnight gains as disappointing global economic data and a tumble in equities sent investors towards the safe-haven metal. Spot gold eased 0.48 percent to $1.225.04 an ounce by 1048 GMT on profit-taking, but retained most of its 1.3-percent gain from Tuesday.
Treasuries recap
The 10-year U.S. treasury yield stood at 1.7514 percent up by 0.024 bps.
Euro zone bond markets were mostly unchanged. A drop towards zero by 10-year Bund yields halted as oil futures recovered and market participants were wary of testing lows hit before a sell-off last May. German 10-year yields, the benchmark for euro zone borrowing costs, were little changed at 0.09 percent, within touching distance of the record low of 0.05 percent hit last April. 2-year yields were flat at minus 0.48 percent in secondary markets. Portugal's 10-year yields rose above 3 percent as the country readied for a syndicated sale of 2022 and 2045 bonds.
Japanese government bonds mostly slipped, though the Bank of Japan's buying operations kept losses in check. The benchmark 10-year yield added half a basis point to minus 0.065 percent. In the superlong zone, the 30-year JGB yield added 3.5 basis points to 0.455 percent. June 10-year JGB futures inched down 0.06 point to end at 151.49.
Gilts opened 12 ticks lower than the settlement of 121.63 as core markets scaled back some of the recent rally as oil prices stabilised. Gilt sellers are closing in on resistance on 10-year cash yields from 50% of February lows and March highs at 1.406%.
