Posted at 24 April 2019 / Categories Market Roundups
Market Roundup
• Dollar rises broadly; euro slips on German business sentiment drop
• Bank of Canada cuts growth forecast, abandons talk of rate hikes
• Trump's Fed pick Moore draws fire from Democrats; Republicans silent
• Britain starts search for "highest calibre" Bank of England governor
• US 19 Apr, w/e MBA Mortgage Applications, -7.3%, -3.5% previous
Looking Ahead - Economic Data (GMT)
• N/A Japan 25 Apr BOJ Rate Decision, -0.10% forecast, -0.10% previous
Looking Ahead - Events, Other Releases (GMT)
• N/A BoJ Governor Haruhiko Kuroda speaks to reporters at the end of the central bank policy meeting in Tokyo
• 06:00 Norges Bank Governor Oystein Olsen and CEO Yngve Slyngstad give introductory statements before the Standing Committee on Finance and Economic Affairs of the Storting in Oslo
• 07:30 Swedish Central Bank to announce interest rate decision and publish Monetary Policy Report in Stockholm
• 12:30 ECB Vice President Luis de Guindos participates in a roundtable event in New York
• 15:00 Federal Reserve Bank of Kansas City issues Manufacturing Survey for April
Currency Summaries
EUR/USD: The euro slipped lower against the U.S. dollar on Wednesday, as deterioration in German business morale weighed on single currency. German business morale deteriorated in April, bucking expectations for a small improvement, as trade tensions hurt the industrial engine of Europe's largest economy. The euro fell 0.68% to $1.1149, its lowest since June 2017. The common currency was on pace for its worst one-day fall in about seven weeks. The dollar index , which measures the U.S. currency versus a basket of six major rivals, was up 0.49% at 98.11, its highest since June 2017. Immediate resistance can be seen at 1.1226 (5 DMA), an upside break can trigger rise towards 1.1253 (11 DMA).On the downside, immediate support is seen at 1.1145 (23,6% retracement level), a break below could take the pair towards 1.1100 (Psychological level).
GBP/USD: British pound declined against the dollar on Wednesday, as stronger dollar and Brexit concerns weighed on British pound. British Prime Minister Theresa May told her top team of ministers on Tuesday that talks with the opposition Labour Party aimed at finding a way forward on Brexit were serious but difficult in some areas. At 1955 GMT, the pound was down 0.20 percent at $1.2903, having touched $1.2950 on Tuesday. A stronger dollar also weighed on the British currency. Immediate resistance can be seen at 1.2974 (38.2% retracement level), an upside break can trigger rise towards 1.3014 (11 DMA).On the downside, immediate support is seen at 1.2884 (23.6% retracement level), a break below could take the pair towards 1.2824 (Feb 12th Low).
USD/CAD: The Canadian dollar weakened against its U.S. counterpart on Wednesday to its lowest in nearly four months, as investors raised bets on a Bank of Canada interest rate cut this year after the central bank slashed its economic growth outlook.Canada's central bank held its benchmark interest rates steady at 1.75% as expected but removed wording about the need for future rate hikes and lowered its growth forecast for 2019 to 1.2% from 1.7%. At (19:55 GMT), the Canadian dollar was trading 05% lower at 1.3488 to the greenback. Immediate resistance can be seen at 1.3516 (Daily high), an upside break can trigger rise towards 1.3556 (23.6% retracement level).On the downside, immediate support is seen at 1.3469 (50% retracement level), a break below could take the pair towards 1.3424 (61.8% retracement level).
USD/JPY: The U.S. dollar rose against the yen on Wednesday, as the greenback was supported by strong U.S. housing data, the latest signal that American economy is outperforming rivals. The dollar was 0.32 percent higher versus the Japanese yen at 112.21. The dollar index , which measures the U.S. currency versus a basket of six major rivals, was up 0.49% at 98.07, its highest since June 2017.Investors now await release of U.S. GDP data this week. The Atlanta Federal Reserve's GDPNow model projects between 2.2 percent and 3.4 percent growth for the world's largest economy, estimates of 2.1 percent growth. Strong resistance can be seen at 112.38 (38.2% retracement level), an upside break can trigger rise towards 113.00 (Psychological level).On the downside, immediate support is seen at 111.90 (50% retracement level), a break below could take the pair towards 111.40(61.8% retracement level).
Equities Recap
European shares pulled back from eight-month highs on Wednesday as worries over China putting policy-easing measures on hold offset upbeat earnings in the region from Credit Suisse and SAP.
The UK's benchmark FTSE 100 closed down by 0.7 percent, FTSEurofirst 300 ended the day down by 0.18 percent, Germany's Dax ended up by 0.5 percent, and France’s CAC finished the down by 0.27 percent.
The S&P 500 slipped on Wednesday after ending the previous session with a record and the Nasdaq failed to hold all-time highs reached earlier in the day while investors waited for more earnings reports.
Dow Jones closed down by 0.22 percent, S&P 500 ended down 0.22 percent, Nasdaq finished the day down by 0.23 percent.
Treasuries Recap
U.S. Treasury yields were lower across maturities on Wednesday as investors piled into the safe-haven government bonds following a dovish report from Canada's central bank, weak data from Germany and Australia, and solid demand at auction for $41 billion of new five-year notes.
Yields across maturities declined between 4 and 5 basis points. The largest change was in the seven-year yield , last down 4.9 basis points, going into the auction of $32 billion of fresh supply on Thursday. Going into Wednesday's five-year auction, yields were lower and little changed following strong demand from bidders.
Commodities Recap
Gold prices edged higher on Wednesday, recovering from a near four-month low touched in the previous session under pressure from a strong dollar, as U.S. stocks took a breather following a rally.
Spot gold was up 0.3 percent to $1,275.66 per ounce as of (2041 GMT), a day after hitting its lowest since Dec. 26 at $1,265.90.U.S. gold futures settled 0.5 percent higher at $1,279.40 an ounce.
Oil prices hovered near six-month highs on Wednesday after data showed U.S. crude stockpiles surged to their highest levels since October 2017, countering fears of tight supply resulting from OPEC output cuts and U.S. sanctions on Venezuela and Iran.
Brent crude futures rose 6 cents to settle at $74.57 a barrel. The international benchmark reached $74.73 a barrel on Tuesday and Wednesday, highest since Nov. 1.
U.S. West Texas Intermediate crude futures were under more pressure from the build in domestic stocks, and ended 41 cents lower at $65.89 a barrel. On Tuesday, WTI hit $66.60, the highest since Oct. 31.