Market Roundup
- Japan Fin Min Aso – No need now for fresh fiscal stimulus, underlying fundamentals firm.
- Econ Min ishihara – NIRP effect not yet clear, must monitor at 3 months.
- BoJ Dep Gov Nakaso – Possible for rates to go farther into negative territory, can’t say how far, eyeing market impact of current rate stance, real estate market not overheating.
- Japan Lower House approves reflationist Sakurai for BoJ Policy Board.
- Japan March manufacturing PMI 49.1, first contraction since Apr ’15, Feb 50.1, new export orders 45.9 from 49.0, employment 50.9 from 51.1.
- China Vice FinMin Zhu – No secret US-China exchange rate agreement.
- RBA Gov Stevens – Economy improving, surveys still upbeat though jobs data bit ambiguous, room for more fiscal-monetary stimulus on global crisis but suggestion not needed.
- Australia Q4 house prices +0.2% q/q,+8.7% y/y, unchanged and +8.3% eyed.
Economic Data Ahead
- (0400 ET/0800 GMT) France March PMI manufacturing- flash, 50.2 eyed; last 50.2.
- (0400 ET/0800 GMT) France March PMI services flash, 49.5 eyed; last 49.2.
- (0400 ET/0800 GMT) France March PMI composite – flash; last 49.3.
- (0430 ET/0830 GMT) Germany March PMI manufacturing flash, 50.8 eyed; last 50.5.
- (0430 ET/0830 GMT) Germany PMI services flash, 55.0 eyed; last 55.3.
- (0430 ET/0830 GMT) Germany PMI composite – flash; last 54.1.
- (0500 ET/0900 GMT) Germany March IFO business climate index, 106.0 eyed; last 105.7.
- (0500 ET/0900 GMT) Germany March IFO current conditions index, 112.6 eyed; last 112.9.
- (0500 ET/0900 GMT) Germany March IFO expectations index, 99.5 eyed; last 98.8.
- (0500 ET/0900 GMT) EZ March PMI manufacturing flash, 51.3 eyed; last 51.2.
- (0500 ET/0900 GMT) EZ March PMI services – flash, 53.3 eyed; last 53.3.
- (0500 ET/0900 GMT) EZ Mar PMI composite – flash, 53.0 eyed; last 53.0.
- (0530 ET/0930 GMT) UK February CPI, +0.4% m/m, +0.4% y/y eyed; last -0.8%, +0.3%.
- (0530 ET/0930 GMT) UK February core, +0.5% m/m, +1.2% y/y eyed; last -1.0%, +1.2%.
- (0530 ET/0930 GMT) UK February RPI, +0.5% m/m, +1.3% y/y eyed; last -0.7%, +1.3%.
- (0530 ET/0930 GMT) UK February RPIX; last -0.7% m/m, +1.4% y/y.
- (0530 ET/0930 GMT) UK February PSNB, GBP5.25 bln eyed; last -GBP11.81 bln.
- (0530 ET/0930 GMT) UK February ex-banks, GBP5.8 bln eyed; last -GBP11.21 bln.
- (0530 ET/0930 GMT) UK February PSNCR; last -GBP24.92 bln.
- (0600 ET/1000 GMT) Germany March ZEW economic sentiment index, 5.0 eyed; last 1.0.
- (0600 ET/1000 GMT) Germany March ZEW current conditions index, 53.0 eyed; last 52.3.
- (0900 ET/1300 GMT) U.S. January FHFA monthly home prices; last +0.4% m/m, +5.7% y/y, index 229.7.
- (1000 ET/1400 GMT) U.S. March Richmond Fed mfg shipments, serv, comp indices; last -11, -2, -4.
Key Events Ahead
- N/A ESM E1.5 bln 6-month bill auction.
- (0400 ET/0800 GMT) ECB Nouy parliamentary testimony in Brussels.
- (0400 ET/0800 GMT) Minutes of UK DMO-dealer-investor quarterly meeting.
- (0430 ET/0830 GMT) Riksbank Account of Monetary Policy ’15 report release.
- (0530 ET/0930 GMT) ECB zero% 7-day refi, E60 bln allotment eyed, E59.7 bln maturing.
- (0545 ET/0945 GMT) Economist Paul Krugman speaks to Japan PM Abe, at Tokyo economic summit.
- (0600 ET/1000 GMT) UK OBR Chote parliamentary testimony.
- (0600 ET/1000 GMT) Netherlands E4-6 bln 0.5% 2026 DSL auction (DDA).
- (0900 ET/1300 GMT) German FinMin Schaeuble speech in Frankfurt.
- (0930 ET/1330 GMT) BoE MPC Forbes speech at Brighton conference.
- (1000 ET/1400 GMT) US TsySec Lew House testimony on international financial system.
- (1230 ET/1630 GMT) Chicago Fed Evans speech in Chicago.
- (1600 ET/2000 GMT) Canada FinMin Morneau presents first budget in Ottawa.
- (1800 ET/2200 GMT) BoE Breeden speech in Cambridge, MA.
- (1900 ET/2300 GMT) Philly Fed Harker speech at NYU.
FX Recap
USD: The dollar held firm on Tuesday, having extended its rebound for a second session after two Federal Reserve officials supported the case for a hike in interest rates sooner rather than later. The dollar index last traded at 95.352, pulling further away from a five-month trough of 94.578 set on Friday.
EUR/USD: The euro eased to $1.1246, recoiling from Thursday's one-month high of $1.1342. Pair hovers around $1.1250 and intraday bias remains bullish for the moment till the time pair holds key support level at $1.1204. A daily close above key resistance will drag the parity towards $1.1342/ $1.1376 marks. On the down side, key support level is seen at $1.1175/ $1.1057 marks. A number of economic indicators will be released in European session, including PMIs, German IFO and ZEW.
USD/JPY: The Japanese yen has appreciated around 7% against the US dollar since the start of the year. Against the yen, the greenback popped back above 112.00 yen, recovering from a 16-1/2 month trough of 110.67 plumbed last week. Pair likely to trade in between 114.00 and 111.31 marks and a sustain break of either side provides further direction to the parity. A daily close below key support level at 111.31 will drag the parity towards at 110.66/ 108.75/107.51 marks thereafter. On the top side, key resistance levels are seen at 114.87/115.96 levels. Today Japan released flash manufacturing PMI data with negative numbers. It fell from 50.1 in February to 49.1 this month.
GBP/USD: The Sterling rose sharply against the dollar and euro on Tuesday. It was up by 0.11 percent at $1.4395 against US dollar, holding above last week's low of $1.4053 struck on Wednesday, when the government's 2016 budget trimmed growth and inflation forecasts. A daily close above $1.4504 will take the parity towards key resistance at $1.4602. Alternatively, a sustained break below $1.4364 will turn the bias slightly bearish and drag the parity down towards $1.4150 marks. Later today, UK will release inflation data including CPI and PPI.
AUD/USD: The Aussie edged up on Tuesday and trading above $0.7600 marks. The Aussie has jumped 6 percent this month largely due to changes in monetary policy expectations in the United States and Australia. If sustained, it would be the largest monthly rise since 2011. Intraday bias remains bullish till the time pair holds key support at $0.7568 levels. A sustained close above it will drag the parity towards 0.7725 levels. On the downside, a break below $0.7533 support levels will turn bias back to the downside for retesting 0.7365 low. From Australia, house price index rose 0.2% q/q in Q4 vs 0.1% expected.
NZD/USD: The New Zealand dollar was steady at $0.6756, off a five-month high of $0.6874 touched last week. Pair hovers above key support level at $0.6750 marks and short term bias remains bullish for the moment till the time pair holds key support at $0.6746. Key support was found at $0.6585, with resistance at $0.6885 levels.
Equities Recap
The Nikkei 225 index rallied 2.01% to 17,061.13 points early on in the trading day, while the broader Topix gauge sprung 2.11% higher to 1,373.41 points.
Hong Kong's Hang Seng was trading 0.25% lower at 20,632.54 points, while the Shanghai Composite bucked the regional trend, sliding 0.92% to 2,990.41 points after rallying to two-month high on Monday.
South Korea's Kospi index traded 0.03% lower at 1,989.05 points on Tuesday morning in Seoul.
Australia's benchmark S&P/ASX 200 was trading 0.06% higher at 5,169.89 points before midday in Sydney.
In New Zealand, benchmark S&P/NZX 50 index trading flat at 6,641.18 points on Tuesday afternoon in Wellington.
Commodities Recap
Oil prices dipped in Asian trade on Tuesday, giving up gains from the previous session after data showed U.S. crude inventories fell for the first time since January and as commodity prices paused from their recent rally. U.S. crude futures for May 6, the front month from Tuesday, were down 6 cents at $41.46 a barrel at 0245 GMT, after settling up 0.8 percent at $41.52 on Monday. The previous front month settled at $39.91 before expiring on Monday. Brent crude futures for May delivery were 12 cents lower at $41.42 a barrel after rising 0.8 percent on Monday. Brent has risen more than 50 percent from 12-year lows in January.
Spot gold steadied on Tuesday after falling for three days, but looked at risk of further weakness as the dollar edged up on comments by a Federal Reserve official that the next U.S. rate rise could come as soon as next month. Spot gold was trading up 0.1 percent at $1,244.90 an ounce by 0138 GMT. Prices hit the weakest in three sessions at $1,240.30 an ounce on Monday. U.S. gold was up 0.1 percent at $1,244.80 an ounce.
Treasuries Recap
New Zealand government bonds eased, sending yields 2.5 basis points higher at the short end of the curve and 4.5 basis points higher at the long end.
Australian government bond futures fell, with the three-year bond contract off 2 ticks at 98.040. The 10-year contract eased 3 ticks to 97.401, while the 20-year contract YXXc1 shed 4.5 ticks to 96.8300.
The Bank of Japan offered to lend 533 billion yen in Japanese government bonds (JGBs) as a secondary source of supply of some issues for settlement today under an agreement expiring on 3/23.
Thailand 40 bln baht, 91-day central bank bond average accepted yield 1.32709 pct. Thailand 40 bln baht, 182-day central bank bond average accepted yield 1.32805 pct.
The material has been provided by InstaForex Company – www.instaforex.com