Market Roundup
• U.S. wholesale inventories fall sharply (-0.5% v forecast -0.1%, -0.2% previous), points to weaker growth.
• Atlanta GDPNow model forecast for real GDP growth in Q1 is 0.1% down from 0.4% on April 5.
• JP Morgan cuts q1 GDP view to 0.2% from 0.7% after drop in Feb inventories.
• Fed's Dudley sees risks lingering, cautious on U.S. rate hikes, Risks tilted 'slightly' to downside despite U.S. strength (Japan/Europe), Minimum wage rises could help inflation goal at margins.
• Germany's Gabriel says ECB rate policy expropriates “little people”, argues Europe needs a growth program.
• Oil prices jump 6 pct on U.S. stockpile draws, Keystone pipeline outage, Doha meeting also support crude.
• Yen falls as Japan's Finance Minister Aso warns on intervention, Short covering seen supporting USD/JPY for now.
• Oil rise lifts Latin American currencies; eyes on Peru, Brazil.
Looking Ahead – Economic Data (GMT)
• –:– China M2 Money Supply YY* Mar forecast 13.5%, 13.3%-previous
• –:– China New Yuan Loans* Mar forecast 1046.7b, 726.6b- previous
• –:– China Outstanding Loan Growth* Mar forecast 14.5%, 14.7%- previous
• 1:30 China PPI YY* Mar forecast -4.6%, -4.9%- previous
• 1:30 China CPI YY* Mar forecast 2.5%, 2.3%- previous
• 1:30 China CPI MM* Mar forecast -0.3%, 1.6%- previous
• 1:30 Australia Housing Finance* Feb forecast 2%, -3.9%- previous
• 1:30 Australia Invest Housing Finance* Feb -1.6%- previous
Looking Ahead – Events, Other Releases (GMT)
• 06:15 Japan Bank of Japan Governor Haruhiko Kuroda delivers speech at annual meeting of trust banks
• 06:30 Japan OECD Secy-General Angel Gurria holds a news conference at Japan National Press Club. Gurria will unveil OECD proposals for Japan's economy
Currency Summaries
EUR/USD is likely to find support at 1.1350 levels and currently trading at 1.1395 levels. The pair has made session high at 1.1416 and hit lows at 1.1395 levels. The pair started to fall from 1.1395 levels in the early European session, it continued its bearish momentum after US market opened and made lows at 1.1348 levels before recovering back towards 1.1398 levels as investors remained cautious as the Federal Reserve Chair Janet Yellen said the Fed was on course to tighten rates gradually, which gave the dollar some relief.Yellen's statement last week that the Fed should proceed cautiously in light of looming global risks to the U.S. economy has been at the heart of sharp falls over the past 10 days for the dollar against the euro and yen. Both the euro and yen have acted as safe havens as investors have bought them back to reverse previous purchases into higher-yielding assets that were funded by these two low-yielding currencies. The dollar inched up 0.2 percent against the euro to $1.1396.
GBP/USD is supported in the range of 1.4015 currently trading at 1.4111 levels. It reached session high at 1.4127 and hit low at 1.4033 levels. Sterling inched lower against the dollar on Tuesday, as the pair was weighted down by weak British industrial output shrank at the fastest rate in more than three years in the three months to February and the trade deficit ballooned to its widest in eight years, data showed on Friday, adding to worries of a broader economic slowdown. Industrial output data declined 0.3 percent in February to give 0.5 fall on the year, its biggest drop since 2013. The pound has largely been driven since the end of last year by worries that Britain will vote to leave the European Union in a referendum on June 23. Any sign that a Brexit is becoming more likely cause it to fall.
USD/CAD is supported at 1.2930 levels and is trading at 1.32993 levels. It has made session high at 1.3025 and lows at 1.2951 levels. The Canadian dollar rallied against the U.S. dollar on Friday touching levels not seen in 1-week as crude oil prices pushed higher as drawdowns in U.S. crude stockpiles fed hopes that a punishing global oversupply may be approaching a tipping point after nearly two year. The Canadian dollar also got a boost after data showed stronger-than-expected Canadian jobs data. The economy created 40,600 jobs in March, far surpassing economists' expectations for 10,000, and driven by a 35,300 increase in full-time jobs. The unemployment rate declined to 7.1 percent, its lowest since December. The currency's weakest level was C$1.3155, while it touched its strongest since April 1 at C$1.2997.
USD/JPY is supported around 108.00 levels and currently trading at 108.35 levels. It hit session high at 108.90 and made session lows at 108.19 levels. The Dollar firmed against Japanese yen on Friday, as traders exited from their short positions after Japanese finance minister warned of possible intervention to weaken the currency. The yen had surged as much as 2 percent against the dollar on Thursday. Japanese Finance Minister Taro Aso responded early Friday by warning that rapid currency moves were undesirable, that the yen's moves were one-sided and that Japan would take steps as needed. In mid-morning trading, the dollar rose 0.4 percent against the yen to 108.59 yen. This week, the dollar has fallen 2.8 percent, its worst weekly performance since mid-February.
Equities Recap
European equities rebounded on Friday as Italian banks rallied and energy stocks advanced, although a pan-European index was headed for its fourth straight week of losses.
Britain's blue-chip FTSE 100 index closed up by 1.08 percent, France's benchmark CAC-40 index closed up by 1.12 percent, Germany's DAX ended up 0.94 percent, meanwhile the pan-European Eurofirst 300 index was up by 1.17 percent.
A sharp rally in crude oil and energy shares helped the Dow and S&P 500 to end with slight gains on Friday, while a drop in shares of biotechs weighed on Nasdaq.
Dow Jones closed up by 0.20 percent, S&P 500 ended up by 0.27 percent, Nasdaq finished the day up by 0.04 percent.
Treasuries Recap
U.S. Treasury debt yields rose from six-week lows on Friday as a rebound in global stock markets, a surge in oil prices and comments by Federal Reserve Chair Janet Yellen on interest-rate hikes spurred selling in U.S. government bonds.
Benchmark 10-year Treasuries fell 11/32 in price as their yields rose 4 basis points to 1.729 percent. Those yields had fallen to their lowest since Feb. 24 on Thursday.
Prices on 30-year Treasuries fell by more than 1 point with yields rising nearly 6 basis points to 2.568 percent.
Commodities Recap
Gold weakened on Friday as strength in equities prompted investors to cash in some of the previous day's gains, remaining on track for its biggest weekly rise in five weeks as the Federal Reserve remained cautious on U.S. interest rate increases.
Spot gold was down 0.1 percent at $1,239.70 an ounce by 2:27 p.m. EDT (1827 GMT), while U.S. gold futures for June delivery settled up 0.5 percent at $1,243.80 an ounce.
Oil prices edged up early on Friday, lifted by firm economic indicators from the United States and Germany which could support fuel demand, but analysts warned that crude markets were threatened by another downturn because of ongoing oversupply.
Brent crude futures settled up $2.51, or 6.4 percent, at $41.94 a barrel, hitting a session high above $42.
U.S. crude futures closed up $2.46, or 6.6 percent, to $39.71. Earlier, it rose to nearly $40.
The material has been provided by InstaForex Company – www.instaforex.com