Market Roundup
- USD/JPY plays 113.23-113.80 and mid-range into NY
- GBP/USD maintaining bull run with 1.4272 high from 1.4196 low
- DAX off 0.3%, Brent down 2.0%, Gold off 0.2%, DXY up 0.03%
- EZ Feb M3 5.%0 vs 5.0% prev, 5.0% exp
- EZ Feb Loans to Households 1.6% vs 1.4% prev
- IT Mar Consumer Confidence 115.00 vs 114.5 prev, 114.00 exp
- IT Mar Business Confidence 102.2 vs 102.00 prev, 102.3 exp
- Fed’s Williams (non-voting) urges Fed to stay on track with rate rises
- Japan Abe-Orders Aso to speed up budget spending next FY2016
- Abe-Economic recovery trend remains intact
- Japan Asakawa-exch rate doesn’t matter, but volatility does
- Japan FinMin Aso – FX, stock markets showing signs of stabilizing
- E.Min Ishihara – PM decision on any tax delay based on econ conditions
- Japan Feb retail sales +0.5% y/y, +1.7% eyed, tourism down with JPY up?
- Neg rates beginning to bite BoJ, CP ylds dipping deep into neg territory – Nikkei
- EgyptAir domestic flight hijacked and landed in Cyprus
- China’s milk stockpile leaves New Zealand dairy farmers struggling
Economic Data Ahead
- (0830 ET/1230 GMT) Canadian producer prices are likely to have declined 0.2 percent in February after rising 0.5 percent in January.
- (0900 ET/1300 GMT) The Case/Shiller house price index is expected to have edged up 5.8 percent in January, after posting a rise of 5.7 in the year earlier.
- (1000 ET/1400 GMT) The Conference Board's consumer confidence index is likely to have increased to 94 in March after decreasing to 92.2 in February.
- (1630 ET/2030 GMT) API reports its weekly crude oil stocks for the week ending March 25.
- (1745 ET/2145 GMT) The Statistics New Zealand will release building permits s.a. for the month of February. It posted a decline of -8.2 percent in the previous month.
- (1950 ET/2350 GMT) Japan's Industrial Production is expected to have slumped -6.0 percent in February, after increasing 3.7 percent in January.
Key Events Ahead
- (1200 ET/1600 GMT) Federal Reserve Bank of New York President William Dudley is presider at an Economic Club of New York luncheon.
- (1220 ET/1620 GMT) U.S. Federal Reserve Chair Janet Yellen speaks on the economic outlook and monetary policy before an Economic Club of New York luncheon.
- (1245 ET/1645 GMT) NY Fed purchases up to $1.10bln 30-yr G.Mae secs.
- (1300 ET/1700 GMT) Federal Reserve Bank of Dallas President Robert Kaplan participates in moderated Q&A session before the Austin Chamber of Commerce.
FX Beat
USD: The dollar index was up 0.2 percent at 96.152 after slipping on Monday from 96.399, its highest since March 16. It has declined slightly after making a high of 96.22. The short term trend is slightly weak as long as resistance 96.80 (200 day 4HMA) holds
EUR/USD: The euro was trading lower around 1.1199, having touched sessions high of 1.1216. The pair has slightly recovered after making a low of 1.1168. Intra day trend is slightly bullish as long as support 1.1150 holds. On the lower side any break below 1.1150 will drag the pair down till 1.1100/1.1050. The minor resistance is around 1.1220 and any break above 1.1230 will take the pair to next level till 1.1260/1.1300/1.1350 is possible. The short term bearish invalidation is only above 1.13500.
USD/JPY: The yen was 0.2 percent down at 113.62 yen per dollar, having touched sessions low of 113.22. It has slightly retreated after making a high of 113.80. The short term trend is slightly bullish as long as support 113 holds. On the lower side major support is around 113 and break below targets 112.60/112. The major resistance is around 114.25 and break above targets 115/115.80.
GBP/USD: Sterling edged down against the dollar as European investors returned from the Easter holiday, and on a trade-weighted basis looked set to finish March with a fourth straight monthly decline. Sterling fell 0.2 percent to $1.4230 and was flat against the euro at 78.55 pence. The pair has broken minor resistance 1.4286 and jumped till 1.42938 at the time of writing. The short term trend is weak as long as resistance 1.4340 holds. Any break above 1.42860 will take the pair to next level till 1.4340/1.4380. Overall bearish invalidation will happen if it closes above 1.4400. On the lower any break below 1.4200 will drag the pair down till 1.4150/1.4100/1.4050 level. The minor support is around 1.4250
USD/CHF: The pair has slightly retreated after making a high of 0.97830 and trades around 0.97466. The short term trend is slightly weak as long as resistance 0.9800 holds. The major support is around 0.9720 and any break below will drag the pair down till 0.9680/0.9650 level. On the higher side minor resistance is around 0.9800 and any break above targets 0.9855/0.9900.
AUD/USD: The Australian dollar edged down to 0.7552, from 0.7533 hit on Thursday before the long Easter break, however it remained within reach of an 8-month peak of 0.7681 touched earlier this month. It has rose 5.7 percent so far in March which, if sustained, would be the largest monthly rise since 2011. Aussie has retreated after making a high of 0.7570. 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 0.7725/0.7750. The minor resistance is around 0.7570, while the major support is around 0.7470 and break below will drag the pair till 0.7400/0.73550.
NZD/USD: The New Zealand dollar trades 0.44 percent higher at 0.6750, having rallied overnight from a low of 0.6668. It has rose to 0.6762 from its previous session after six days of decline. Investors now await the Global Dairy Price auction which will be held in the early hours of Wednesday morning. The pair faces immediate resistance at 0.67701 (Mar 23 High), while support is located at 0.6709 (5-DMA).
Equities Recap
European shares soared as investors await Federal Reserve Chair Janet Yellen speech for clues to the interest rate outlook following weak U.S. data.
The pan-European Eurofirst 300 stock index rose 0.6 percent, with insurers among the gainers after positive broker comments. Britain's FTSE 100 index soared 0.8 percent, Germany's
DAX gained 0.5 pct, France's CAC 40 added 0.6 pct.
Tokyo's Nikkei slumped 0.18 pct at 17,103.53 as weak U.S. data rattled sentiment towards exporters. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.4 percent.
Shanghai Composite Index lost 1.3 percent at 2,919.83 points, while CSI300 index ended down 1.1 percent at 3,135.41 points . HK’s Hang Seng index edged up 0.1 pct at 20,366.30 points.
Commodities Recap
Oil prices declined, reflecting growing concerns that a 2-month rally may be in danger of fizzling, while analysts forecast another rise to record levels for U.S. crude stockpiles. Brent crude futures dropped to $39.18 a barrel by 1112 GMT, having lost some six percent in the last six trading days, while U.S. crude fell 47 cents to $38.92.
Gold dipped slightly but held above a 1-month low as softer dollar and weak U.S. economic data dented prospects of an immediate U.S. interest rates hike. Spot gold was down 0.24 percent
at $1,218.38 an ounce by 1113 GMT. The metal had fallen to a 1-month low of $1,208.15 on Monday, before closing the day up 0.4 percent.
Treasuries Recap
The 10-year U.S. Treasury yield stood at 1.891 percent versus previous close of 1.872 percent.
German 10-year Bund yields hit 4-week lows as cheap oil held inflation expectations below the levels seen before the European Central Bank unveiled its last monetary policy easing package. German 10-year, the benchmark for borrowing costs in the euro zone, fell 3.3 basis points to 0.16 percent, the lowest since March 1 and only slightly off this year's lows of 0.10
percent hit in February. Most other euro zone bond yields were 3-7 bps lower.
Japanese government bond prices edged down as investors tweaked their debt holdings ahead of the fiscal year-end, generating some selling. The benchmark 10-year JGB yield rose 1 basis point to minus 0.085 percent. The June 10-year JGB futures dipped 0.09 point to 151.78. The benchmark yield for JGBs slid to a record low of minus 0.135 percent after the BOJ embarked on a negative interest rate policy in January. The central bank's adoption of negative rates has driven JGB yields below zero, while also increasing market volatility.
Gilts opened at 120.89, up 17 ticks from the previous 120.72 settlement price. 10-yr Gilt yield is down 3bp at 1.43%, in line with other core euro denominated bonds.
Australian government bond futures were a touch firmer, with the 3-year bond contract up 1 tick at 98.040. The 10-year contract rose half a tick to 97.4250, while the 20-year contract edged up 1 tick to 96.8550. New Zealand government bonds gained, sending yields 1 basis points lower along most of the curve.
The material has been provided by InstaForex Company – www.instaforex.com