Market Brief
In Asia, China’s inflation for March printed marginally higher to 1.4% y/y verse 1.3%. The lack of inflation pressure is keeping hope for additional easing alive, giving risky asset a boost. The Hang Seng consolidated gains from yesterday record high and stabilized around 13,784 while the Shanghai Composite is also green on the screen, up by 1.27% to 4,024 (both supported by the Chinese inflation figures). Australian equities rose by 0.61% as home loans approvals advanced 1.2% m/m in February verse 3% expected while reading for January was revised up from -3.5% to -1.7% m/m. AUD/USD currently sits on the 0.7688 key support (Fib 38.2% on March selloff), bids should jump in under 0.7660 (low from April 9). On the mid-long run, a support stands at 0.7533 (low from April 2). We expect the Aussie to depreciate further in the following weeks with the first target sets to the psychological level of 0.70.
EUR/USD is sliding slowly but surely, as the euro hit 1.0638 in the US yesterday. The greenback is getting closer to its March 15 low as sellers keep jumping in amid better than expected wholesale inventories (0.3% verse 0.2% consensus) and jobless claims (281k vs. 283k consensus, downward revision to last week to 267k from 268k). On the mid-term run our target is still set to the parity.
Yesterday BoE interest rate decision was a non-event. GBP/USD is treading water this morning after sharp moves yesterday and the break of 2 key supports (1.4803 and 1.4761). The cable is really close to the low from March 19 and should find some bids under 1.4689. Next support stands at 1.4635 (low from March 18). On the mid-long term, the sterling is getting through 1.4814 which is the low from July 2013. We therefore remain bearish on the sterling. WTI crude oil is still digesting the latest reading of US oil inventories and rose up by 0.08% while the Brent was up 1.64% while Iran’s Supreme Leader Ayatollah Khamenei said a deal is not guaranteed as Iran will sign no agreement that immediately lift all economic sanctions.
Today’s key event are the Manufacturing and Industrial Production in UK for February, the consensus are 0.4% and 0.3% m/m respectively. We may see some erratic movements on the news. In Canada, Housing Starts number is due at 12:15GMT and is expected at 175K as home prices in Canada are broadly seen as overvalued while low prices for oil and other commodities ease the pressure on housing activity; however majors hubs like Toronto and Montreal are cooling at a slower pace. The unemployment rate for Canada is expected to came in at 6.9% with a net change of 0k (up from last month’s -1k).
| Today's Calendar | Estimates | Previous | Country/GMT |
|---|---|---|---|
| SW Mar Average House Prices | - | 2.598M | SEK / 07:30 |
| NO Feb Industrial Production MoM | - | -3.00% | NOK / 08:00 |
| NO Feb Industrial Production WDA YoY | - | -0.40% | NOK / 08:00 |
| NO Feb Ind Prod Manufacturing MoM | 1.30% | -3.70% | NOK / 08:00 |
| NO Feb Ind Prod Manufacturing WDA YoY | - | -0.20% | NOK / 08:00 |
| NO Mar CPI MoM | 0.40% | 0.40% | NOK / 08:00 |
| NO Mar CPI YoY | 2.10% | 1.90% | NOK / 08:00 |
| NO Mar CPI Underlying MoM | 0.50% | 0.50% | NOK / 08:00 |
| NO Mar CPI Underlying YoY | 2.30% | 2.40% | NOK / 08:00 |
| NO Mar PPI including Oil MoM | - | 2.10% | NOK / 08:00 |
| NO Mar PPI including Oil YoY | - | -9.90% | NOK / 08:00 |
| UK Feb Industrial Production MoM | 0.30% | -0.10% | GBP / 08:30 |
| UK Feb Industrial Production YoY | 0.30% | 1.30% | GBP / 08:30 |
| UK Feb Manufacturing Production MoM | 0.40% | -0.50% | GBP / 08:30 |
| UK Feb Manufacturing Production YoY | 1.30% | 1.90% | GBP / 08:30 |
| UK Feb Construction Output SA MoM | 2.20% | -2.60% | GBP / 08:30 |
| UK Feb Construction Output SA YoY | 1.90% | -3.10% | GBP / 08:30 |
| CA Mar Housing Starts | 175.0K | 156.3K | CAD / 12:15 |
| CA Mar Unemployment Rate | 6.90% | 6.80% | CAD / 12:30 |
| CA Mar Net Change in Employment | 0.0K | -1.0K | CAD / 12:30 |
| CA Mar Full Time Employment Change | - | 34 | CAD / 12:30 |
| CA Mar Part Time Employment Change | - | -34.9 | CAD / 12:30 |
| CA Mar Participation Rate | - | 65.8 | CAD / 12:30 |
| US Mar Import Price Index MoM | -0.40% | 0.40% | USD / 12:30 |
| US Mar Import Price Index YoY | -10.20% | -9.40% | USD / 12:30 |
| CA Bloomberg April Canada Economic Survey | - | - | CAD / 13:00 |
| UK Mar NIESR GDP Estimate | - | 0.60% | GBP / 14:00 |
| US Mar Monthly Budget Statement | -$43.4B | -$36.9B | USD / 18:00 |
Currency Tech
EUR/USD
R 2: 1.1280
R 1: 1.1043
CURRENT: 1.0684
S 1: 1.0768
S 2: 1.0613
GBP/USD
R 2: 1.5166
R 1: 1.4994
CURRENT: 1.4673
S 1: 1.4635
S 2: 1.4547
USD/JPY
R 2: 122.03
R 1: 121.20
CURRENT: 120.57
S 1: 118.33
S 2: 117.93
USD/CHF
R 2: 0.9984
R 1: 0.9812
CURRENT: 0.9778
S 1: 0.9491
S 2: 0.9450