|05:00 (GMT)||Japan||Leading Economic Index||February||98.5|
|05:00 (GMT)||Japan||Coincident Index||February||90.3|
|07:50 (GMT)||France||Services PMI||March||45.6||47.8|
|07:55 (GMT)||Germany||Services PMI||March||45.7||50.8|
|08:00 (GMT)||Eurozone||Services PMI||March||45.7||48.8|
|08:30 (GMT)||United Kingdom||Purchasing Manager Index Services||March||49.5||56.8|
|12:30 (GMT)||Canada||Trade balance, billions||February||1.41|
|12:30 (GMT)||U.S.||International Trade, bln||February||-68.2||-70.2|
|13:00 (GMT)||U.S.||FOMC Member Charles Evans Speaks|
|14:00 (GMT)||Canada||Ivey Purchasing Managers Index||March||60|
|14:30 (GMT)||U.S.||Crude Oil Inventories||April||-0.876|
|18:00 (GMT)||U.S.||FOMC meeting minutes|
|19:00 (GMT)||U.S.||Consumer Credit||February||-1.31||5|
|23:50 (GMT)||Japan||Current Account, bln||February||646.8|
FXStreet notes that the euro weakened against the US dollar moving from 1.2093 to 1.1737 during March. Looking ahead, the common currency should recover in the third quarter if vaccine roll-out improves, economists at MUFG Bank appraise.
“The EU Commission held a conference on 29th March to resolve slow roll-outs. Internal Market Commissioner Thierry Breton stated that the EU’s expanding capacity would mean production of 2-3 B doses per year and the ability to vaccinate 70% of adults by the end of the summer.”
“If vaccination rates can pick up, which seems likely, and the economy begins to pick up helped by the EU fiscal program, the prospects for the euro will improve and would be a signal to us of a turn higher in EUR/USD emerging in H2 2021.”
Job Openings and Labor Turnover Survey (JOLTS) published by the Labor
Department on Tuesday revealed a 3.8 percent m-o-m gain in the U.S. job
openings in February after a revised 5.1 percent m-o-m surge in January
(originally a 2.4 percent m-o-m advance).
According to the report, employers posted 7.367 million job openings in February compared to the January figure of 7.099 million (revised from 6.917 million in the original estimate) and economists’ expectations of 6.995 million. This was the highest reading since January 2019. The job openings rate was 4.9 percent in February, up from a revised 4.7 percent in the prior month (originally 4.6 percent). The report showed that the number of job openings rose in health care and social assistance (+233,000), accommodation and food services (+104,000), and arts, entertainment, and recreation (+56,000), but declined in state and local government education (-117,000), educational services (-35,000), and information (-34,000).
Meanwhile, the number of hires jumped 5.0 percent m-o-m to 5.738 million in February from a revised 5.465 million in January (originally 5.301 million). The hiring rate was 4.0 percent in February, up from a revised 3.8 percent in the prior month (originally 3.7 percent). Hires increased in accommodation and food services (+220,000), but fell in state and local government education (-80,000) and in educational services (-25,000). The separation rate in February was 5.456 million or 3.8 percent, compared to 5.323 million or 3.7 percent in January. Within separations, the quits rate was 2.3 percent (flat m-o-m), and the layoffs rate was 1.2 percent (flat m-o-m).
FXStreet reports that economists at Citibank expect gold (XAU/USD) to see further sideways trading between the $1700-$1900 range in the rest of the year.
“We expect that XAU/USD could mostly hover between the $1,700-$1,900/oz range for the balance of the year and average $1,800/oz in 2021.”
“We see several peak cycle risks for the bullion market. These include risk of the US Federal Reserve tapering asset purchases by end-2021 and more aggressive short-term interest rate trading pricing for policy rate lift-off in 2022/2023 which may, in turn, be USD supportive.”
“The rise in 10-year Treasury yields this year is also a headwind for a long duration zero-coupon asset like gold.”
U.S. stock-index futures fell slightly on Tuesday after the Dow Jones and the S&P 500 both closed at record highs on Monday as strong employment and non-manufacturing PMI data for March added to optimism about a swift economic recovery in the U.S. amid accelerating vaccinations and massive stimulus.
Today's Change, points
Today's Change, %
(company / ticker / price / change ($/%) / volume)
ALTRIA GROUP INC.
Amazon.com Inc., NASDAQ
American Express Co
Cisco Systems Inc
Citigroup Inc., NYSE
Deere & Company, NYSE
Exxon Mobil Corp
FedEx Corporation, NYSE
Ford Motor Co.
Freeport-McMoRan Copper & Gold Inc., NYSE
General Electric Co
General Motors Company, NYSE
Home Depot Inc
HONEYWELL INTERNATIONAL INC.
International Business Machines Co...
Johnson & Johnson
JPMorgan Chase and Co
Merck & Co Inc
Starbucks Corporation, NASDAQ
Tesla Motors, Inc., NASDAQ
The Coca-Cola Co
Twitter, Inc., NYSE
Verizon Communications Inc
Wal-Mart Stores Inc
Walt Disney Co
Yandex N.V., NASDAQ
Alphabet (GOOG/L) initiated with an Outperform at Evercore ISI; target $2525
Yandex N.V. (YNDX) initiated with a Buy at New Street; target $81
McDonald's (MCD) initiated with a Neutral at Atlantic Equities; target $237
Amazon (AMZN) resumed with an Outperform at Evercore ISI; target $4000
Facebook (FB) resumed with an Outperform at Evercore ISI; target $370
Lyft (LYFT) resumed with an Outperform at Evercore ISI; target $73
Netflix (NFLX) resumed with an Outperform at Evercore ISI; target $665
Twitter (TWTR) resumed with an In-line at Evercore ISI; target $75
Uber (UBER) resumed with an Outperform at Evercore ISI; target $74
Chevron (CVX) downgraded to Neutral from Buy at Goldman; target lowered to $113
Credit Suisse (CS) downgraded to Underperform from Neutral at BofA Securities
Credit Suisse (CS) downgraded to Hold from Buy at Societe Generale
Freeport-McMoRan (FCX) upgraded to Outperform from Mkt Perform at Raymond James; target $41
Snap (SNAP) upgraded to Overweight from Neutral at Atlantic Equities; target $75
FXStreet notes that S&P 500 has started Q2 strongly and although the rally is now leaving the market in “typical” extreme territory, and analysts at Credit Suisse see scope for the rally to extend further yet and look for a move to 4104/09 next and eventually to the at 4200 level.
“Although the rally is beginning to now leave the market at what we see as its ‘typical’ extreme – 15% above the 200-day average and also above daily, weekly and monthly Bollinger Bands – RSI momentum is only starting to get overbought and we see scope for the rally to extend further yet.”
“A knee-jerk pullback should be allowed for ahead of further strength to 4100, then what we look to be a tougher test at 4104/09 – trend resistance from last November as well as Fibonacci projection resistance. We would look for this to cap at first for a pullback, but with a move above expected in due course for 4138 and eventually our 4200 Q2 objective.”
FXStreet reports that Andrew Sheets, Chief Cross-Asset strategist for Morgan Stanley, notes that over the last 30 years, April has been one of the best months of the entire year - and this year, the rainy month could have some extra advantages.
“For global stocks, returns in April tend to be about 2% better than average, while the returns in May through September are about 1% worse. Still, every little bit matters, and over time, these small numbers can make a difference.”
“This April should be the last month where economic data is strong, but US core inflation is still below 2%. First-quarter earnings and economic data have an additional advantage this month - it's the one-year anniversary of the lows in economic activity from last year. As such, any year over year comparison is going to be highly favorable.”
|08:30||Eurozone||Sentix Investor Confidence||April||5.0||13.1|
USD strengthened against its major counterparts in the European session on Tuesday on optimism over an economic rebound in the U.S.
The strong employment and non-manufacturing PMI data for March added to optimism about a swift economic recovery in the U.S. amid accelerating vaccinations and massive stimulus.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.17% to 92.76.
On Friday, the March employment report revealed 916,000 additions to nonfarm payrolls, the most in seven months, and a 6.0% unemployment rate, the lowest rate in a year. Yesterday, the ISM Non-Manufacturing Index rose to a record 63.7% in March from 55.3% in February.
Investors also digested the comments by the Cleveland Fed president Loretta Mester, who told CNBC on Monday that near-term tapering of bond purchases is unlikely. She also noted that the Fed is "still far from" its policy goals and needs to be "very deliberately patient" in its approach to monetary policy. This eased rate hike bets.
FXStreet reports that UOB Group’s FX Strategists note USD/JPY could recede to the 109.50-zone in the short-term.
24-hour view: “Our expectation for ‘further sideway-trading’ in USD was incorrect as it lurched lower to an overnight low of 109.95. The rapid decline appears to be overdone and USD is unlikely to weaken much further. USD is more likely to consolidate at these lower levels, expected to be between 109.90 and 110.55.”
Next 1-3 weeks: “The manner by which USD plunged below 110.20 came as a surprise (low of 109.95). The price actions suggest that last week’s high of 110.96 is a short-term. The current corrective pullback has scope to move lower to 109.55. Overall, USD is expected to trade with a downward bias as long as the ‘strong resistance’ at 110.75 is not taken out.”
FXStreet reports that Axel Rudolph, Senior FICC Technical Analyst at Commerzbank, notes that copper (LME) is expected to see further sideways trading between the 9617.00 February high and the 8570.00 March low.
“Copper is to range further below its 9617.00 February high while remaining above its 8570.00 March low. As long as the 9617.00 high isn’t overcome further sideways trading around the 9000.00 mark should be witnessed.”
“Potential support below 8570.00 comes in along the 55-day moving average at 8594.65 and also between the seven-month support line and the January high at 8436.22/8238.00. This we would expect to hold if it were to be revisited at all. Below this area sits the December high at 8028.00.”
“While the contract stays above the 7705.00/7673.00 late December and January lows we will stay overall bullish.”
FXStreet reports that Kit Juckes from Societe Generale notes that positioning is no longer a drag on the euro, but the adverse trend from rising US rates/yields, and the ongoing upgrade of US growth forecasts while European ones languish, suggest the euro isn't out of the woods just yet.
“The 2021 US growth consensus has risen from 5% to 5.7% since last month, while EZ consensus has stayed at 4.2%.”
“2-yr EU-US rate differentials are 10bp wider in the last month, 10yr yield spreads nearly 20bp wider and the 2y2y real rate differential is 30bp wider.”
“CFTC positioning does show progress, which is more than can be said for the two previous charts. The euro no longer looks quite so scarily overbought on this basis.”
FXStreet reports that FX Strategists at UOB Group note that cable’s upside is seen gathering further traction in the next weeks.
24-hour view: GBP popped above 1.3900 during late NY session (high of 1.3913) before settling on a strong note at 1.3908 (+0.60%). Robust upward momentum is likely to lead to further GBP strength towards 1.3950. The major resistance at 1.4000 is not expected to come under threat.”
Next 1-3 weeks: “We noted yesterday (05 Apr, spot at 1.3825) that GBP ‘is in a consolidation phase and is expected to trade between 1.3700 and 1.3900’. We did not anticipate the sudden surge in momentum that sent GBP to 1.3913 and the subsequent strong daily closing at 1.3908 (+0.60%). There is scope for GBP to strengthen further but 1.4000 is solid resistance and the odds for a sustained rise above this level are not high. Overall, GBP is expected to trade with a positive bias as long as it does not move below 1.3820 within these few days.”
FXStreet reports that economists at Westpac discuss AUD/USD prospects.
“RBA Governor Lowe repeated that the aussie ‘remains in the upper end of the range of recent years’ and asserted that the RBA’s various monetary measures contribute ‘to a lower exchange rate than otherwise’. There was very little comment on global developments but ‘global trade has picked up and commodity prices are mostly higher than at the start of the year’.”
“The accelerating US recovery is underpinning global risk appetite. Still, the US’s stark outperformance of the Eurozone on virus control and vaccine rollout should keep Dollar Index underpinned for now, indirectly capping AUD/USD rallies. The aussie should continue to find support on dips to the mid-0.75s but is likely capped for now in the 0.7700 area. A return to the 0.80 handle may have to wait until Q3.”
Reuters reports that a senior German finance ministry official said that Germany expects world financial leaders this week to back a $650 billion new allocation of the International Monetary Fund's Special Drawing Rights (SDR) to help countries cope with the pandemic and its economic fallout.
With the new U.S. administration backing the move, there is now broad agreement among IMF members to bolster the Fund's emergency reserves and a deal this week will pave the way for the fresh money being available from August, the official said.
The new allocation will benefit countries struggling most from the pandemic as roughly 42% of the new funds will go to the world's poorest countries, the official added.
According to the report from Eurostat, in February 2021, the euro area seasonally-adjusted unemployment rate was 8.3%, stable compared with January 2021 and up from 7.3% in February 2020. The EU unemployment rate was 7.5% in February 2021, also stable compared with January 2021 and up from 6.5% in February 2020.
Eurostat estimates that 15.953 million men and women in the EU, of whom 13.571 million in the euro area, were unemployed in February 2021. Compared with January 2021, the number of persons unemployed increased by 34 000 in the EU and by 48 000 in the euro area. Compared with February 2020, unemployment rose by 1.922 million in the EU and by 1.507 million in the euro area.
In February 2021, 2.967 million young persons (under 25) were unemployed in the EU, of whom 2.394 million were in the euro area. In February 2021, the youth unemployment rate was 17.2% in the EU and 17.3% in the euro area, compared with 17.4% in both areas in the previous month. Compared with January 2021, youth unemployment decreased by 34 000 in the EU and by 9 000 in the euro area. Compared with February 2020, youth unemployment increased by 230 000 in the EU and by 177 000 in the euro area.
According to the report from Sentix, in April, the Economic Index for the Eurozone rose very strongly by 8.1 points, to 13.1. The leading indicator reaches its highest level since August 2018. In the latest data, the assessment of the current situation is particularly positive - and that worldwide! In April, the current situation values jumped by a whopping 12.8 points, reaching a level that prevailed before the Corona crisis. Another positive aspect is that the expectations, which have been rising for many months, are not being disappointed and the current situation values are now gaining ground dynamically. The large gap between expectations and the current status is slowly closing, without the high expectation values weakening. The 6-month outlook even improved by another 2.3 points. The expectations component for the euro area has reached a new all-time high of 34.8 points!
Investors are building their expectations on accelerated vaccination success across the EU. The economic recovery process is supported by a massive expansion of fiscal policy. Investors even expect the fiscal impulse to expand. Since at the same time there are no signs of a significant departure from the expansive monetary policy of the central banks, the applied inflationary pressure remains high. Significant inflationary risks are in place for the coming months.
According to the report from the Society of Motor Manufacturers and Traders (SMMT), the UK new car market recorded its first ‘growth’ since August 2020, with 29,280 more units registered during March compared to the same month last year. However, the month represents the anniversary of the first lockdown in March 2020, when the pandemic brought Britain to a standstill and registrations fell by -44.4%.
Compared with the 2010-2019 March average of 450,189, registrations were down -36.9%, with 283,964 units registered. So far, 2021 has seen 58,032 fewer cars registered compared to January to March last year, equivalent to a loss of £1.8 billion in turnover during the first quarter.
For the sector to return to its pre-pandemic levels, around 8,300 new cars will need to be registered every single trading day for the rest of the year. By comparison, the industry has averaged around 7,400 a day during the past decade and current levels are closer to 5,600 a day.
While overall registrations were slightly up compared to last year, growth came almost entirely from fleets, which saw a 28.7% increase in registrations. Retail consumer demand remained depressed, falling by -4.1% compared to March 2020 as showrooms remained closed for the duration of the month.
Reuters reports that officials said that the world’s financial leaders will discuss on Wednesday how to coordinate policies to prevent their virus-battered economies emerging from recession at highly different speeds.
When finance ministers and central bank governors of the world’s top 20 economies hold their video-conference the patchy response to the ongoing COVID-19 crisis will be high on their agenda, officials from the Italian presidency said.
“The first signals are uneven, some economies are picking up well and others are being left behind, this is something that is clouding the global economic outlook,” said one official.
COVID inoculation rates vary widely, with Britain and the United States far outstripping most European Union, Asian and especially African countries.
“At the moment the main instrument of economic policy is vaccinations,” the official said, noting that the United States is also adopting massive fiscal stimulus, which analysts expect will lead to a faster recovery.
“We’re aware that it’s not possible for some countries to get out of this crisis and others not to ... so the G20 is the best venue to discuss these aspects and find solutions,” he added.
FXStreet reports that economists at the National Bank of Canada remain comfortable with the target of 1.20 for the USD/CAD pair in the second half of this year.
“We see little downside for commodity prices in coming months given the current backdrop and an accelerating vaccine rollout.”
“The long-awaited federal budget set for April 19 is expected to be very supportive of households and is likely to help formalize program spending. While it will not necessarily affect the Canadian dollar much, new or front-loaded spending could have some effect.”
“The Bank of Canada’s Monetary Policy Report is set to be released April 21. We expect the BoC to announce further slowing of asset purchases. Though market participants have probably priced in this tapering, its formalization could lead to some swings.”
“Our model shows the Canadian dollar is still 6 cents undervalued against the USD . All in all, recent developments support our view of a CAD converging toward 1.20 to the USD in coming months.”
|01:30||Australia||ANZ Job Advertisements (MoM)||March||8.8%||7.4%|
|01:45||China||Markit/Caixin Services PMI||March||51.5||54.3|
|04:30||Australia||Announcement of the RBA decision on the discount rate||0.1%||0.1%||0.1%|
During today's Asian trading, the US dollar continued to decline and approached a two-week low against a basket of currencies, which was observed simultaneously with the retreat of treasury yields from recent peaks, despite signs of a sustained recovery in the US economy.
The ICE index, which tracks the dollar's performance against six currencies (euro, swiss franc, yen, canadian dollar, pound sterling and swedish krona), fell 0.38%.
The yen continued to recover from a more than one-year low of around 111 per dollar, briefly returning below 110 on Tuesday. The euro continued to rise from a near five-month low of about $ 1.17, and exceeded the level of $ 1.1800.
The US dollar has risen strongly this year, along with treasury bond yields, as investors bet on a faster recovery of the pandemic in the US than in other developed countries, amid massive stimulus and aggressive vaccinations.
But the dollar's fall this week even after Friday's much stronger-than-expected monthly employment data came out, followed on Monday by the highest service sector activity figures on record, which may indicate that most of the upbeat forecasts are being factored in for now.
However, Westpac strategists see room for further dollar gains, saying the series of strong data "reinforces the unmatched performance of the US dollar's recovery in growth."
FXStreet reports that strategists at Capital Economics expect silver to continue its downfall whereas palladium is set to resume its uptrend.
“The release of the Fed Minutes on Wednesday should provide some indication about how committed the FOMC is to keeping interest rates at current lows. If the minutes bring forward market expectations of interest rates hikes then the US dollar could strengthen, putting downward pressure on commodity prices.”
“We expect the silver price to continue to fall further by the end of the year as investment demand declines and industrial demand eases.”
“We think the recent palladium rally will resume before long as the deficit in the market widens, taking the price to $2,700 per ounce by year-end.”
Reuters reports that World Bank President David Malpass said he expects China, the U.S. and other G20 economies to extend a freeze in bilateral debt service payments through the end of 2021 when they meet this week.
The G20 Debt Service Suspension Initiative (DSSI) has already helped countries defer some $5.7 billion in payments through the end of 2020, with another $7.3 billion in deferred payments expected through June, according to World Bank data.
Extending the debt payment freeze through year-end would save even more money that countries could use to combat the COVID-19 pandemic and support their economies, Malpass told.
He said G20 members would probably stipulate that such an extension would be the “last or final” one offered.
RTTNews reports that survey results from IHS Markit showed that China's service sector growth accelerated in March driven by steeper increases in activity and overseas sales.
The Caixin PMI rose to 54.3 in March from 51.5 in February. The pace of expansion was the fastest in last three months. The score has remained above the neutral 50.0 level for eleventh consecutive month.
The survey showed that new orders increased at the fastest pace in three months despite a slight fall in export business.
Rising intakes of new work led to renewed pressure on operating capacities. As part of efforts to expand capacity and process orders, employment at service providers increased in March. Average operating expenses rose for the ninth straight month in March. Nonetheless, the rate of inflation was the softest recorded since last September. In order to alleviate pressure on margins, prices charged by services companies increased again.
Underpinned by sharper rise in services activity, the composite output index picked up to 53.1 in March from 51.7 in February.
Resistance levels (open interest**, contracts)
Price at time of writing this review: $1.1813
Support levels (open interest**, contracts):
- Overall open interest on the CALL options and PUT options with the expiration date April, 9 is 70882 contracts (according to data from April, 5) with the maximum number of contracts with strike price $1,1750 (4754);
Price at time of writing this review: $1.3912
Support levels (open interest**, contracts):
- Overall open interest on the CALL options with the expiration date April, 9 is 9673 contracts, with the maximum number of contracts with strike price $1,4100 (1172);
- Overall open interest on the PUT options with the expiration date April, 9 is 15096 contracts, with the maximum number of contracts with strike price $1,3750 (1304);
- The ratio of PUT/CALL was 1.56 versus 1.55 from the previous trading day according to data from April, 5
* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.
** - Open interest takes into account the total number of option contracts that are open at the moment.
Reuters reports that Australia’s central bank left interest rates at an all-time low on Tuesday but cautioned it would “carefully” monitor trends in property debt as the housing market boomed.
The Reserve Bank of Australia (RBA) also reiterated its commitment to keep policy accommodative for as long as is needed to pull down unemployment and push inflation higher, signalling the cash rate would remain at 0.1% until at least 2024.
In a short post-meeting statement, RBA Governor Philip Lowe noted the house price surge was driven by strong demand from owner-occupiers and first-home buyers while pointing to the still subdued credit growth for property investors.
“Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained,” Lowe said.
Analysts generally expect financial regulators to impose stricter macro-prudential rules on banks this year to help rein in risky lending behaviour with the RBA seen likely to keep rates at 0.1% for some time to come
|Raw materials||Closed||Change, %|
|01:30 (GMT)||Australia||ANZ Job Advertisements (MoM)||March||7.2%|
|01:45 (GMT)||China||Markit/Caixin Services PMI||March||51.5|
|04:30 (GMT)||Australia||Announcement of the RBA decision on the discount rate||0.1%|
|08:30 (GMT)||Eurozone||Sentix Investor Confidence||April||5.0|
|09:00 (GMT)||Eurozone||Unemployment Rate||February||8.1%|
|14:00 (GMT)||U.S.||JOLTs Job Openings||February||6.917|
|22:00 (GMT)||New Zealand||NZIER Business Confidence||Quarter I||-6%|
|22:30 (GMT)||Australia||AiG Performance of Construction Index||March||57.4|
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