Posted at 07 April 2022 / Categories Market Roundups
Market Roundup
• Canada Mar Ivey PMI 74.2, 60.0 forecast, 60.6 previous
• Canada Mar Ivey PMI n.s.a 68.4,62.2 previous
• Gasoline Inventories -2.041M,0.063M forecast, 0.785M previous
• Crude Oil Inventories 2 .421M,-2.056M forecast,-3.449M previous
• US Cushing Crude Oil Inventories 1.654M, -1.009M previous
Looking Ahead - Economic Data (GMT)
•01:30 Australia Feb Imports (MoM) -2% previous
•01:30 Australia Feb Trade Balance 12.000B forecast,12.891B previous
•01:30 Australia Feb Exports (MoM) 8% previous
•01:30 Australia Private House Approvals -16.3% previous
•05:00 Japan Coincident Indicator (MoM) -0.1% previous
•05:00 Japan Leading Index 102.5 previous
Looking Ahead - Economic events and other releases (GMT)
•01:30 Japan BoJ Board Member Noguchi Speech
Currency Summaries
EUR/USD: The euro declined on Wednesday after the Federal Reserve released minutes from its last meeting that reinforced views the central bank may tighten aggressively to curb inflation. According to minutes of the March 15-16 policy meeting, Fed officials “generally agreed” to cut up to $95 billion a month from the central bank’s asset holdings as another tool in the fight against surging inflation, even as the war in Ukraine tempered the first U.S. interest rate increase. The euro was last down at $1.0896, after briefly touching a nearly one-month low of $1.0874. Immediate resistance can be seen at 1.0974(38.2%fib), an upside break can trigger rise towards 1.1016 (50%fib).On the downside, immediate support is seen at 1.0876 (Lower BB), a break below could take the pair towards 1.0853 (23.6%fib).
GBP/USD: The British pound weakened to a three-week low versus dollar on Wednesday, as latest comments by U.S. Federal Reserve’s officials highlighted a divergence between the U.S. and UK central banks on how to tackle inflationary pressures. A hawkish stance from the Fed bolstered the dollar and contrasts with the Bank of England. BoE deputy governor Jon Cunliffe said earlier this week he did not believe expectations of persistently high inflation were becoming embedded in companies’ and consumers’ thinking. The pound was flat against the dollar to $1.3073, after earlier touching its lowest level since March 16 at $1.3046. Immediate resistance can be seen at 1.3125 (5DMA), an upside break can trigger rise towards 1.3152 (38.2%fib).On the downside, immediate support is seen at 1.3046 (Daily low), a break below could take the pair towards 1.3003(Lower BB).
USD/CAD: The Canadian dollar slipped to its lowest level in more than a week against its U.S. counterpart on Wednesday, as oil prices fell and the Federal Reserve outlined details of how it plans to shrink its bloated balance sheet. The price of oil, one of Canada's major exports, settled 5.6% lower at $96.23 a barrel after large consuming nations said they would release oil from reserves to counter tightening supply.Domestic data on Wednesday showed that Canadian economic activity expanded at its fastest pace on record in March. The seasonally adjusted Ivey Purchasing Managers Index rose to 74.2 from 60.6 in February, the highest since the PMI was launched in 2000.Immediate resistance can be seen at 1.2577 (38.2%fib), an upside break can trigger rise towards 1.2594(Daily high).On the downside, immediate support is seen at 1.2518 (14 DMA), a break below could take the pair towards 1.2437 (23.6%fib).
USD/JPY: The dollar strengthened against the yen on Wednesday after minutes of the last Federal Reserve meeting reinforced expectations of multiple half percentage-point rate increases to control soaring inflation. Fed officials viewed the hefty rate increases as appropriate at future meetings, especially if inflation pressures intensify, minutes showed. They would also have preferred a 50 basis point rise in the target range for the federal funds rate at the March meeting.The dollar index, which measures the greenback’s value against six major currencies, climbed to 99.7780, its strongest level since late May 2020. It was last up 0.1% at 99.588. Strong resistance can be seen at 123.97 (23.6%fib), an upside break can trigger rise towards 124.28 (29th March high).On the downside, immediate support is seen at 123.07(38.2%fib), a break below could take the pair towards 122.89(50%fib).
Equities Recap
European stocks closed sharply lower on Wednesday with investors pressing sales at several counters amid concerns about inflation and imminent monetary tightening by the Federal Reserve, and on reports about imposition of new sanctions by Western nations on Russia.
UK's benchmark FTSE 100 closed down by 0.34 percent, Germany's Dax ended down by 1.83 percent, France’s CAC finished the day down by 2.21percent.
Wall Street's main indexes fell on Wednesday, with steep declines in tech and other growth stocks, after minutes from the Federal Reserve's March meeting sharpened investors' focus on the U.S. central bank's plans to fight inflation.
Dow Jones closed down by 0.42% percent, S&P 500 closed down by 0.97% percent, Nasdaq settled down by 2.22% percent.
Treasuries Recap
The benchmark U.S. 10-year Treasury yield rose on Wednesday but was off its session high after minutes of the most recent Federal Reserve meeting showed the central bank's balance sheet reduction could begin next month.
The yield on 10-year Treasury notes was up 5.5 basis points to 2.609% while the 2-year note yield was unchanged at 2.504%, leaving the 2-10 curve at 10.28 basis points, after starting the week inverted.
Commodities Recap
Gold prices held steady after Wednesday's release of the minutes of the Federal Reserve meeting in March, as the metal's appeal as a safe haven and inflation hedge offset an expected 50 basis point rate hike by the U.S. central bank.
Spot gold was little changed at $1,923.50 per ounce by 3:08 p.m. ET (1908 GMT) and U.S. gold futures settled down 0.2% at $1,923.10.
Oil futures fell sharply on Wednesday after large consuming nations said they would release oil from reserves to counter tightening supplyand hawkish minutes from the U.S. central bank that bolstered the dollar.
Brent crude futures settled down $5.57, or 5.2%, at $101.07 a barrel, while U.S. crude fell $5.73, or 5.6%, to $96.23 a barrel.