Global Markets:

  • Asian stock markets: Nikkei up 0.40 %, Shanghai Composite gained 0.20 %, Hang Seng lost 0.65 %, ASX declined 0.50 %
  • Commodities: Gold at $1162 (+0.20 %), Silver at $15.69 (+0.35 %), WTI Oil at $48.92 (+1.30 %), Brent oil at $56.83 (+0.25 %)
  • Rates: US 10 year yield at 2.132, UK 10 year yield at 1.801, German 10 year yield at 0.226

News & Data:

  • Australia Home Loans -3.5 % m/m, Expected: -2.0 %, Previous: 2.7 %
  • Australia Westpac Consumer Sentiment -1.2 %, Previous: 8.0 %
  • Japan CGPI 0.0 % m/m, Previous: -1.3 %
  • Japan CGPI 0.5 % y/y, Expected: 0.5 %, Previous: 0.3 %
  • Japan Core Machinery Orders 1.9 %, Expected: -1.0 %, Previous: 11.4 %
  • China Industrial Production 6.8 %, Expected: 7.8 %, Previous: 7.9 %
  • China Retail Sales 10.7 %, Expected: 11.7 %, Previous: 11.9 %
  • USD/JPY At 140 Needed For Bank of Japan To Reach Inflation Goal — BBG Survey
  • New Zealand PM Key: Inflation Is Probably Headed Lower — BBG
  • Saudi Set To Supply Full Contractual Volumes Of Crude To Asia In April, Steady Against March — RTRS
  • RBA Assistant Governor Kent: Very Low Level Of Interest Rates To Provide Support
  • Kent: Australia Has Good Prospects For Growth Over Longer Term
  • Kent: Exports Expected To Contribute Significantly To Growth
  • Kent: A$ Starting To Play A Role In Helping Economy To Adjust
  • Kent: A$ Remains Relatively High Given State Of Economy

Markets Update:

A new day and a new low in the EUR/USD. The pair reached 1.0865 overnight and the downtrend just seems unstoppable. The charts suggest no significant support until 1.05 and there are no significant data releases out of the Euro Zone today. EUR/GBP is approaching an important support area at 0.7000-20 and EUR/JPY has closed the day below 130, a very bearish sign, which suggests we might be heading for a test of 124.95 in the near-term. Meanwhile, GBP/USD remains relatively resilient, partly due to the positive cross flows (EUR/GBP selling and GBP/AUD strength). The pair has been able to stay above 1.50 for now, but a clear break above 1.5150 is needed to trigger a larger short squeeze.

USD/JPY fell to 120.80 overnight as it got rejected off 122 resistance twice yesterday. However, the pair remains very well bid overall and significant support is eyed at 120.60. Buying dips is still the preferred strategy. The commodity currencies are under renewed pressure with USD/CAD briefly above 1.27 in the Asian session and AUD/USD breaking below 0.76 support. NZD/USD reached a low of 0.7230 overnight and is now back at 0.7250. The focus is now on the RBNZ rate decision tonight. The bank is expected to leave rates unchanged, but many expect that it will be more dovish in its policy statement with the usual comments about the NZD being at unjustified and unsustainable levels.

Upcoming Events:

  • 07:45 GMT – French Current Account
  • 08:00 GMT – ECB President Draghi speaks
  • 08:30 GMT – Swedish CPI (0.6 % m/m, -0.1 % y/y)
  • 09:30 GMT – UK Industrial Production (0.2 % m/m, 1.3 % y/y)
  • 09:30 GMT – UK Manufacturing Production (0.2 % m/m, 2.6 % y/y)
  • 15:00 GMT – UK NIESR GDP Estimate
  • 18:00 GMT – US Federal Budget Balance (-$187bln)
  • 20:00 GMT – RBNZ Interest Rate Decision
  • 20:00 GMT – RBNZ Monetary Policy Statement
  • 20:05 GMT – RBNZ Governor Wheeler speaks