Posted at 20 April 2022 / Categories Market Roundups
Market Roundup
•Canada Mar Housing Starts 246.2K,250.0K forecast, 247.3K previous
•Canada Feb Foreign Securities Purchases 7.44B, 13.49B previous
•Canada Feb Foreign Securities Purchases by Canadians -9.68B,-14.42B previous
•US Mar Housing Starts 1.745M forecast,1.769M previous
•US Mar Building Permits (MoM) 0.4%,-1.6% previous
•US Building Permits 1.873M,1.825M forecast,1.865M previous
•US Housing Starts (MoM) 0.3%,6.8% previous
•US Redbook (YoY) 15.2%,15.2%,13.4% previous
•French 12-Month BTF Auction -0.291% ,-0.320% previous
•French 3-Month BTF Auction -0.653%,-0.664% previous
•French 6-Month BTF Auction -0.561%,-0.579% previous
•New Zealand Global Dairy Trade Price Index -3.6%,-1.0% previous
Looking Ahead - Economic data ahead (GMT)
•00:30 Australia MI Leading Index (MoM)-0.2% previous
•01:00 China PBoC Loan Prime Rate 3.70% previous
•04:30 Japan Tertiary Industry Activity Index (MoM) -0.7% previous
Looking Ahead - Economic events and other releases (GMT)
•No significant events
Currency Summaries
EUR/USD: The euro was little changed on Tuesday as the prospect of aggressive Fed tightening to rein in inflation kept investors on edge. Expectations that the U.S. Federal Reserve will tighten its monetary policy have continued to provide support to the dollar. The Federal Reserve looks all but certain to raise its interest rate by 50 basis points when it meets next month and a 75 basis point hike has not been ruled out as Fed officials work to curtail inflation. U.S. inflation is far too high”, St. Louis Federal Reserve Bank President James Bullard said on Monday as he repeated his case for increasing interest rates to 3.5% by the end of the year. The euro was last trading 0.1% higher against the dollar at $1.0791, but stayed just off last week’s two-year low of $1.0756. Immediate resistance can be seen at 1.0801(5DMA), an upside break can trigger rise towards 1.0849 (38.2%fib).On the downside, immediate support is seen at 1.0765 (23.6%fib), a break below could take the pair towards 1.0717 (Lower BB).
GBP/USD: The pound dropped on Tuesday, falling for a fourth straight day against the dollar amid doubts over the Bank of England’s policy path and increased political uncertainty Investors have become increasingly unsure whether the Bank of England will follow some of its global counterparts in raising interest rates aggressively to curb inflation . Data last week showed British consumer price inflation jumping in March to 7%, its highest in three decades, but money markets have slightly dialled down expectations for how much the BoE will raise interest rates in the rest of the year. Immediate resistance can be seen at 1.3030 (50%fib), an upside break can trigger rise towards 1.3053 (14DMA).On the downside, immediate support is seen at 1.2967 (Lower BB), a break below could take the pair towards 1.2932(23.6%fib).
USD/CAD: The Canadian dollar steadied against its U.S. counterpart on Tuesday, with the currency holding near key technical levels as oil prices fell and rising bond yields helped underpin the greenback. The U.S. dollar climbed to a two-year high against a basket of major currencies as investors bet on aggressive interest rate hikes by the Federal Reserve to tamp down inflation . Meanwhile, the price of oil fell 5.2% to $102.60 a barrel after the International Monetary Fund reduced economic growth forecasts, raising concerns about demand. Oil is one of Canada's major exports. The loonie was nearly unchanged at 1.2620 to the greenback, after trading in a range of 1.2569 to 1.2646. Immediate resistance can be seen at 1.2653 (38.2%fib), an upside break can trigger rise towards 1.2688 (38.2%fib).On the downside, immediate support is seen at 1.2589 (23.6%fib), a break below could take the pair towards 1.2577 (5DMA).
USD/JPY: The dollar surged on Tuesday to a 20-year high against the Japanese yen, underpinned by the divergence in monetary policy between a Federal Reserve determined to keep a lid on soaring inflation and a Bank of Japan that has kept interest rates ultra-low .The greenback hit 128.97 yen, the highest since May 2002. It was last up 1.5% at 128.94 yen. The dollar has risen 5.9% on the yen so far this month, on pace for the largest monthly percentage rise since 2016. The dollar index, which measures the greenback against six other currencies, rose past 101 for the first time in more than two years. It was last up 0.2% at 100.98. Strong resistance can be seen at 129.43(23.6%fib), an upside break can trigger rise towards 130.00(Psychological level).On the downside, immediate support is seen at 127.59(5DMA), a break below could take the pair towards 127.15 (38.2%fib).
Equities Recap
European shares posted their worst day in two weeks on Tuesday as rising bond yields, worries about the war in Ukraine and a batch of upcoming earnings kept investors on edge, while energy shares outperformed despite plunging oil prices.
UK's benchmark FTSE 100 closed down by 0.20 percent, Germany's Dax ended down by 0.07 percent, France’s CAC finished the day down by 0.83percent.
The three main Wall Street benchmarks had their best days in over a month on Tuesday as investors responded to positive earnings and dovish comments from two U.S. Federal Reserve officials on interest rate rises.
Dow Jones closed up by 1.45% percent, S&P 500 closed up by 1.61% percent, Nasdaq settled up by 2.`15% percent.
Treasuries Recap
U.S. Treasury yields continued to march to three-year highs on Tuesday and 30-year yields tapped the 3% level as investors prepared for the Federal Reserve to aggressively raise rates as it tries to stem soaring inflation.
Benchmark 10-year note yields rose to 2.930%, the highest since December 2018. Thirty-year yields reached 3.018%, the highest since March 2019.
Commodities Recap
Gold fell over 1% on Tuesday as a stronger dollar and rising Treasury yields overshadowed safe-haven inflows into bullion.
Spot gold fell 1.3% to $1,953.19 per ounce by 02:30 p.m. ET (1830 GMT). U.S. gold futures settled down 1.4% at $1,959.
Oil prices were down about 5% in volatile trading on Tuesday on demand concerns after the International Monetary Fund (IMF) cut its economic growth forecasts and warned of higher inflation.
Brent crude , the global benchmark, fell $5.91, or 5.22%, to settle at $107.25 a barrel, while U.S. West Texas Intermediate dropped $5.65, or 5.22%, to settle at $102.56 a barrel.