Market Roundup
- Minny Fed Kocherlakota: ’15 rate hike inappropriate, would delay return of inflation to 2% goal, full employment, risk still of disinflation.
- RBNZ DepGov Spencer: Action needed to reduce housing imbalances, other macro-prudential options being assessed including investor lending.
- Moody’s: Australia AAA sovereign rating supported by low government debt and economic flexibility.
- OECD: BoJ must maintain stimulus with eye on risks, low-cost debt financing won’t continue indefinitely, structural reform important, senior economist unconcerned over delay in meeting CPI target, SecGen Gurria sees limits to what more BoJ can do.
- China Stats Bureau: Economy slowed but employment, inflation, expectations stable.
- China Q1 GDP +1.3% q/q, +7.0% y/y, +1.4%/+7% consensus, growth slowest since ’09, FDI +13.5% y/y; March IP +5.6% y/y, retail sales +10.2%, +6.9%/+10.9% consensus.
- Australia April Westpac/MI consumer confidence index -3.2% to 96.2.
Economic Data Ahead
- (0200 EDT/0600 GMT) Germany Mar CPI/HICP – final, +0.1% and +0.3% y/y consensus; prelim +0.1%, +0.3%
- (0245 EDT/0645 GMT) France Mar HICP – final, +0.7% m/m, unchanged y/y; prelim +0.7%, -0.3%.
- (0500 EDT/0900GMT) Eurozone Feb trade balance, E21.1 bln surplus consensus; previous E7.9 bln surplus.
- (0830 EDT/1230 GMT) US Apr NY Fed Empire State mfg index, 7.0 consensus; previous 6.9.
- (0915 EDT/1315 GMT) US Mar industrial output, -0.3% m/m consensus; previous +0.1%.
- (0915 EDT/1315 GMT) US Mar capacity utilization, 78.7% consensus; previous 78.9%.
- (1000 EDT/1400 GMT) US Apr NAHB housing market index, 55.0 consensus; previous 53.0.
Key Events Ahead
- N/A Riksbank Fin’l Infrastructure Report, Sweden, Greece 13-wk bill auctions.
- N/A Washington, DC conference on US/world economy, various Fed, Tsy attendees.
- N/A IMF Global Financial Stability Report.
- (0200 EDT/0600 GMT) US CommSec Pritzker speech in Beijing.
- (0215 EDT/0615 GMT) BoJ Gov Kuroda speech at trust bank association annual meeting in Tokyo.
- (0530 EDT/0930 GMT) Germany E1 bln 0.5% 2025 Bund auction.
- (0730 EDT/1130 GMT) Riksbank DepGov Kerstin in Stockholm discussion on corporate bonds.
- (0745 EDT/1145 GMT) ECB policy announcement, no change in 0.05% refi, -0.2% depo rates expected.
- (0815 EDT/1215GMT) German FinMin Schaeuble speech in New York.
- (0830 EDT/1230 GMT) ECB Pres Draghi press conference.
- (1000 EDT/1400 GMT) BoC policy announcement, no change in 0.75% overnight rate expected.
- (1040 EDT/1440 GMT) FOMC ViceChair Fischer moderates panel discussion at IMF/WB annual event.
- (1115 EDT/1515 GMT) BoC Gov Poloz press conference on latest monetary policy report.
- (1400 EDT/1800 GMT)Fed Beige Book.
- (1400 EDT/1800 GMT) Japan MoF Yamasaki speech before Atlantic Council in Washington, DC.
- (1600 EDT/2000 GMT) US Treasury int’l capital flows data, last $88.3 net capital inflow.
FX Recap
USD/JPY recovered partially in Asia and trades at 119.63 levels at present. The yen has been pressured by the weak Chinese macro economic data. A break above 119.72 (20-DMA) levels could see the pair testing 119.95 (50-DMA) levels. On the flipside, support is likely to be found at 119.35 (100-DMA) levels and then at 119 levels.AUD/USD dived into the red on Wednesday, wiping out previous gains and currently trades at 0.7591 levels. It posted a high of 0.7630 and a low of 0.7578 levels thus far. The pair is likely to face resistance at 0.7642 (10-DMA) levels, and then at 0.7690 (20-DMA) levels. On the downside, support is located at 0.7585 levels and then at 0.7534 levels.NZD/USD moved higher in Asia and momentarily hit a high of 0.7539 on the day so far. The upside stayed capped by downbeat Chinese data. On the upside, the pair sees resistance at 0.7546 (100-DMA) levels and above which gains could be extended to 0.7600 levels. On the downside, support might be found at 0.7488 (Today’s Low) levels and a break below could drag it to 0.7420 levels.GBP/USD looks bearish and trades at 1.4754 levels at present. The pair has immediate support at 1.4600 (psychological level), blow which losses could be extended to 1.4567 (2015 low) and finally 1.4500 (psychological level). On the other hand, resistance is located at 1.4700, and a break above would target 1.4724 levels and then 1.4740 (low Apr.1). EUR/USD erased yesterday’s gains and headed south on Wednesday. It currently trades at 1.0624 levels with a high of 1.0657 levels and a low of 1.0616 levels. On the downside, major support is likely to be found at 1.0457 (2015 low ) levels and a break below could drag it to 1.0400 (psychological level) and further to 1.0360 (low Jan.8 2003) levels. On the flipside, a convincing break above 1.0620 levels would see the pair testing 1.0684 levels and then 1.0713 levels.
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