Market Roundup
- NZD/USD takes out key 0.6900 level to reach 0.6965 9-mth high
- EUR/USD up 0.3% to 1.1333, GBP/USD up 0.1% to 1.4452
- USD/JPY 112.02 low from 112.81 and 113.81 Tuesday
- Brent +1.35%, DAX +1.5%, Gold -0.23%, DXY -0.3%
- CH Mar KoF Ind. 102.5 vs 102.6 rvsd, 101.9 exp
- EZ Mar Business Climate 0.11 vs 0.07 previous, 0.08 exp
- EZ Mar Econ Sentiment 103.0 vs 103.8 previous, 103.8 exp
- EZ Mar Ind. Sentiment -4.2 vs -4.4 previous, -4.2 exp
- EZ Mar Cons. Confidence -9.7 vs -8.8 previous, -9.7 exp
- Norway Jan Labour Force Survey 4.8% vs 4.6% rvsd, 4.5% exp
- China Pres. Econ at new normal shifting to moderate pace from high
- ECB will not move to absurdly negative territory-Coeure tells Politico
- UK Latest BMG poll-45% to leave, 41% to stay, 14% undecided
- Japan-Abe to weigh implementing extra stimulus NHK-Bbg
- Japan Feb Industrial Output -6.2% M/M – Meti (Reuters Poll: -6.0%)
- Japan Manufacturers See March Output +3.9% m/m (Prev: +3.1% – Meti
- Westpac / MNI China Consumer Sentiment (March) 118.1 (prior 111.3)
Economic Data Ahead
- (0815 ET/1215 GMT) Payrolls processor ADP is likely to report that U.S. private employers added 194,000 jobs in March after adding 214,000 jobs in February.
- (0930 ET/1330 GMT) Brazil's primary budget deficit is expected to expand to 10 billion reais in February after posting a surplus of 27.913 billion reais in January.
- (1000 ET/1400 GMT) Mexico is likely to report that Jobless rate edged down 4.13 percent as compared to 4.24 percent in the previous month.
- (1030 ET/1430 GMT) The Energy Information Administration reports its Crude Oil Stocks for the week ending March 25.
- (1630 ET/2030 GMT) Mexico reports fiscal balance for the month of February. The economy posted a deficit of -48.17 billion pesos in the prior month.
- (1905 ET/2305 GMT) GFK releases Consumer Confidence index for the month of March. The index is expected to decline further -1 after it stood at 0 in the month of February.
Key Events Ahead
- (1300 ET/1700 GMT) Chicago Federal Reserve Bank President Charles Evans speaks on current economic conditions and monetary policy before the Forecasters Club of New York.
- (1420 ET/1820 GMT) Bank of Canada deputy governor Lynn Patterson gives a speech on “Adjusting to the Fall in Commodity Prices: One Step at a Time” in Alberta, which has been affected by declining oil prices.
FX Beat
USD: The dollar declined across the board, with the dollar index down at 94.814, adding further losses to its biggest 1-day fall in nearly two weeks, with investors pricing in chances of a rate hike only towards the end of the year.
EUR/USD: The euro trades 0.33 percent higher at 1.1325, hovering towards sessions high 1.1334. The pair has broken minor resistance 1.1260 and jumped till 1.13325. Intraday trend is slightly bearish as long as resistance 1.1350 holds. On the lower side any break below 1.1270 will drag the pair down till 1.1200/1.1155. The pair’s major resistance is around 1.1350 and any break above 1.1350 will take the pair to next level till 1.1380/1.14350/1.1500 is possible.
USD/JPY: The Japanese yen trades 0.23 percent higher against the US dollar at 112.30 level. The pair has broken minor support 113 and have declined till 112.01 earlier in the session. The short term trend is slightly bearish as long as resistance 113 holds. On the lower side major support is around 112 and break below targets 111/110.60. The major resistance is around 113 and break above targets 113.80/114.25.
GBP/USD: Sterling advanced against a weakened dollar, after comments from the Fed chief left investors convinced that U.S. interest rates would not rise anytime soon and drove many to cut favourable bets on the greenback. Sterling was up 0.4 percent at 1.4435, gaining for a third straight day and hitting its highest level in 9 days. The pound underperformed the euro, with the European single currency steady at 78.50 pence. Cable has retreated after making a high of 1.4450 level and trades around 1.43925. The short term trend is slightly bearish as long as resistance 1.4480 holds and break above will take the pair to next level around 1.4520/1.4580. On the lower side any break below 1.4350 (55 day EMA) will drag the pair till 1.4280/1.4200/1.4150 level. The short term bearish invalidation only if it closes above 1.4500 level.
USD/CHF: The Swiss franc gained 0.31 percent to 0.9631 against its U.S. counterpart, following Fed Yellen's dovish comments. Traders continue to remain bearish on the dollar, dragging the pair away from a peak of 0.9786. The short term trend is slightly bullish as long as support 0.9630 holds. Any break below 0.9630 will drag the pair down till 0.9580/0.9530 in short term. On the higher side any trend reversal can happen only above 0.9800. The minor resistance is around 0.9680 and break above targets 0.9720/0.9750/0.9780 level.
AUD/USD: The Australian dollar advanced to 0.7670, edging closer to the recent 8-1/2 month peak of $0.7682. The Aussie has surged 6.8 percent so far in March, which if sustained would mark the biggest monthly increase since 2011. The short term trend is slightly bullish as long as support 0.7570 holds. On the higher side major resistance is around 0.7700 and break above targets 0.7725/0.7750. The minor resistance is around 0.7680, while major support is around 0.7570 and break below will drag the pair till 0.7500/0.7470.
NZD/USD: The New Zealand dollar rose to a 5-month peak of 0.6965 following Fed Yellen's cautious stance on future rate hikes. The kiwi trades 1.19 percent higher at 0.6923 levels. It has advanced from a low of 0.6668 struck earlier in the week and continues to rise as traders are likely to remain bullish on it. Immediate resistance is located at 0.6965 (Session's High), while on the downside, support is located at 0.6822 (Dec 31 Low).
Equities Recap
World stocks gained as markets pared back expectations on U.S. interest rates hikes this year, weighing down the dollar and strengthening sovereign bonds.
MSCI world equity index which tracks shares in 45 countries, rose 0.8 percent near to 2016 highs, while the euro zone's blue-chip Euro STOXX 50 index rose 0.8 percent.
The pan-European FTSEurofirst 300 index advanced 1 percent, Britain's FTSE 100 rose 1.2 percent, while Germany's DAX and France's CAC gained 0.7 percent.
Shanghai Composite index rose 2.8 pct at 3,000.64 points, CSI300 index gained 2.6 pct at 3,216.28 points. HK’s Hang Seng index closed up 2.2 pct at 20,803.39 points, while Tokyo's
Nikkei ended down 1.31 pct at 16,878.96.
Commodities Recap
Oil futures edged up to near $40 per barrel as a weaker dollar boosted demand for riskier assets and the International Energy Agency stated that expectations for a deluge of oil from Iran were misplaced. Brent futures advanced 55 cents to $39.69 a barrel as of 1053 GMT after settling down $1.13 in the previous session. U.S. crude rose 61 cents to $38.89 a barrel after ending Tuesday down $1.11.
Gold edged back below $1,240 an ounce as investors cashed in some of the previous day's 1.7 percent gains, as Yellen remained cautious on further interest rate hikes. Spot gold was at $1,233.46 an ounce at 1100 GMT, down 0.7 percent, after rising 1.7 percent overnight.. U.S. gold futures for April delivery were up $2.50 an ounce at $1,238.30.
Treasuries Recap
The 10-year U.S. treasury yield stood at 1.817 percent versus previous close of 1.812 percent.
Euro zone bond yields were 1-2 basis points lower. German 10-year Bund yields slipped closer to their record lows after Fed's Yellen sounded a cautious tone on U.S. interest rate increases. German 10-year Bund yields, the benchmark for euro zone borrowing costs, fell to 0.127 percent in early trade, within a whisker of this year's low of 0.102 percent and an all-time low of 0.05 percent hit last year.
Japanese government bonds edged up, taking their cue from a rise in U.S. Treasuries. The benchmark 10-year JGB yield edged down half a basis point to minus 0.095 percent, inching back toward a record low of minus 0.135 percent hit earlier this month. In the superlong zone, the 20-year JGB yield slipped 1.5 basis points to 0.395 percent. June 10-year JGB futures added 0.04 point to end at 151.83.
Australian government bond futures rose, with the 3-year bond contract 5 ticks higher at 98.080. The 10-year contract gained 6.5 ticks to 97.4900, while the 20-year contract was steady at 96.9250. The spread between 10-year and 3-year government bonds shrank to 56 basis points, the lowest in nearly one year. New Zealand government bonds rose, sending yields 3 basis points lower.
The material has been provided by InstaForex Company – www.instaforex.com