News

America's Roundup: Dollar index holds losses after U.S. March retail sales data, Wall Street climbs,Gold inches up as investors assess Syria strikes fallout, Oil prices pare losses after losing more than 1.5 percent-April 17th, 2018

Market Roundup

• U.S. Mar Retail sales m/m, 0.6%, 0.4% forecast, -0.1% previous.

• U.S. Mar Retail sales ex-auto m/m, 0.2%, 0.2% forecast, 0.2% previous.

• U.S. Feb Business Inventories m/m, 0.6%, 0.6% forecast, 0.6% previous.

• U.S. Apr NY Fed Manufacturing, 15.80, 18.80 forecast, 22.50 previous.

• U.S. Apr NAHB Housing Market index, 69, 70 forecast, 70 previous.

• Trump says Russia, China playing 'currency devaluation game'.

• Trump to nominate Clarida, Bowman to Fed's Board of Governors.

• Dudley sees three or four Fed rate hikes in 2018 –CNBC.

• Fed's Kaplan sees solid 2018 U.S. growth, warns on long-term outlook.

• Global economy to grow 3.5 pct in 2018 but trade is key risk – IIF.

• Merkel allies limit her room on euro zone reform before Macron meeting.

• ECB's Praet says confident in inflation recovery.

Looking Ahead – Economic Data (GMT)

• No major economic events scheduled for the day

Looking Ahead – Events, Other Releases (GMT)

• 07:30 Senior officials from the German Finance Ministry will discuss current economic developments ahead of the upcoming G20 meeting in Washington in Berlin

• 08:30 German Finance Minister Olaf Scholz presents the annual customs report during a news conference in Berlin in which he is likely to also address other topical issues such as the trade dispute between the United States and the European Union in Berlin 

• 13:15 Federal Reserve Bank of San Francisco President John Williams speaks before the National Association for Business Economics (NABE)-Bank of Spain International Symposium, “Global Recovery: The Good, the Bad, and the Ugly in Madrid

• 14:00 Federal Reserve Vice Chair for Supervision Randal Quarles testifies before the House Financial Services Committee hearing, “The Semiannual Testimony of the Federal Reserve's Supervision and Regulation of the Financial System” in Washington D.C.

• 15:00 Federal Reserve Bank of Philadelphia President Patrick Harker gives lecture, “The Economics of Equitable Education: How Today's Loans, Access, and Training Affect Tomorrow's Economy” at Saint Joseph's University in Philedelphia

• 17:40 Federal Reserve Bank of Chicago President Charles Evans speaks before a Chicago Rotary Club luncheon in Chicago

Currency Summaries

EUR/USD is likely to find support at 1.2311 levels and currently trading at 1.2380 levels. The pair has made session high at 1.2396 and hit lows at 1.2358 levels. Euro strengthened  against the dollar on Monday as greenback slipped lower on possible consequences of a U.S.-led missile strike against Syria over the weekend, in the biggest intervention by Western powers against a poison gas attack. U.S., British and French forces pounded Syria with air strikes early on Saturday in response to a poison gas attack that killed dozens of people last week. U.S. President Donald Trump announced the military action from the White House. British Prime Minister Theresa May and French President Emmanuel Macron said their forces had joined in the attack. The strikes risked raising tension in an already combustible region but appeared designed not to trigger a military response from Russia and Iran. Saturday's strikes marked the biggest intervention by Western countries against Syrian President Bashar al-Assad and his ally Russia, which is facing further economic sanctions over its role in the conflict. An index that tracks the dollar against a basket of six currencies  fell 0.3 percent, while the euro was up 0.30 percent to $1.2380.

GBP/USD is supported in the range of 1.4266 levels and currently trading at 1.4340 levels. It reached session high at 1.4340 and dropped to session low at 1.4307 levels. Sterling rose past $1.43 mark on Monday and approached a post-Brexit referendum high as investor focus shifted to data that could cement expectations of a May interest rate increase and away from Britain's military intervention in Syria.Britain struck Syria with cruise missiles on Saturday in partnership with Western allies, targeting chemical weapons facilities. But the military action did not appear to hurt risk appetite as bond yields rose and the dollar fell. Sterling rose by 0.7 percent on Monday to $1.4340, its highest since January, as the currency continued a two-week rally against a broadly weak dollar. Since Britain signed a transition agreement last month to cover the 21-month period after it leaves the European Union, concerns about Brexit have abated as investors focus on the state of the UK economy before an expected rate rise in May. Markets expect the Bank of England to raise interest rates by 25 basis points next month as it tries to curb inflation. Crucial data on British unemployment, wages and inflation numbers are due this week and have the potential to boost sterling further.

USD/CAD is supported at 1.2546 levels and is trading at 1.2567 levels. It has made session high at 1.2609 and lows at 1.2567 levels. The Canadian dollar strengthened against its U.S. counterpart on Monday after Canadian Prime Minister Justin Trudeau moved the day before to end an escalating crisis over a Kinder Morgan Canada Ltd oil pipeline. Trudeau, who attended an emergency summit on Sunday with the premiers of Alberta and British Columbia, said Ottawa was prepared to offer financial aid to ensure the project went ahead. Failure to build the pipeline could weigh on the outlook for Canadian crude oil, which tends to trade at a discount to U.S crude. Oil is one of Canada's major exports. Gains for the loonie came as the U.S. dollar broadly fell. The greenback remained at lower levels against a basket of currencies as U.S. retail sales in March rose following three months of declines, but failed to dispel some traders' worries about economic growth cooling. The Bank of Canada is expected to leave its benchmark interest rate unchanged at 1.25 percent when it announces on Wednesday its latest interest rate decision. The Canadian dollar was last trading 0.2 percent higher at C$1.2567 to the greenback. The currency traded in a range of C$1.2565 to C$1.2609.

USD/JPY is supported around 106.65 levels and currently trading at 107.11 levels. It peaked to hit session high at 107.39 and made session lows at 107.02 levels. The Japanese yen strengthened against the dollar on Monday as weak retail sales from the United States and nervousness globally over Western missiles fired at Syria increased demand for Japanese yen. U.S., British and French forces pounded Syria with air strikes early on Saturday in response to a poison gas attack that killed dozens of people last week, in the biggest intervention by Western powers against Syrian President Bashar al-Assad.The Japanese Yen, often seen as safe-haven in times of heightened uncertainty, gained broadly against greenback in the early US session, but struggled to make sharp gains amid expectations the attacks would not mark the start of greater Western involvement in the conflict. On the data front, U.S. retail sales in March rose following three months of declines but failed to dispel some traders' worries about economic growth cooling, hobbling the dollar. The Commerce Department said on Monday retail sales increased 0.6 percent last month after an unrevised 0.1 percent dip in February. January data was revised to show sales falling 0.2 percent instead of the previously reported 0.1 percent drop. Economists polled had forecast retail sales rising 0.4 percent in March. Retail sales in March increased 4.5 percent from a year ago.

Equities Recap

European shares fell on Monday as investors awaited new U.S. sanctions on Russia, while losses were limited as the market expected there would be no immediate military escalation in Syria following the weekend's American-led strike.

UK's benchmark FTSE 100 closed down by 0.8 percent, the pan-European FTSEurofirst 300 ended the day down by 0.42 percent, Germany's Dax ended down by 0.4 percent, France’s CAC finished the day down by 0.1 percent.

U.S. stocks closed higher on Monday, with the biggest boosts from the technology and healthcare sectors as investors turned their focus to earnings season and appeared less worried about U.S.-led missile attacks in Syria.

Dow Jones closed up by 0.88 percent, S&P 500 ended up by 0.81 percent, Nasdaq finished the day up by 0.69 percent.

Treasuries Recap

The U.S. yield curve reached it flattest level in over a decade on Monday afternoon as the White House said President Trump will nominate economist Richard Clarida as Federal Reserve Vice Chairman.

The yield on the 10-year benchmark government bond was last up at 2.832 percent from its last close at 2.828 percent.

Commodities Recap

Gold prices rose on Monday as losses in the U.S. dollar bolstered, though gains were muted as financial markets bet that air strikes on Syria would not escalate into a wider conflict.

Spot gold was up 0.10 percent at $1,346.31 per ounce by 2:49 p.m. EST, up 0.1 percent, as U.S. gold futures for June delivery settled up 0.21 percent at $1,350.70 per ounce.

Oil recovered some ground on Monday, but prices were still down on the day as investor concern waned about escalating tensions in the Middle East following air strikes on Syria over the weekend.

Brent crude oil futures were down 74 cents at $71.84 a barrel by 11 a.m. EST [1700 GMT], having recovered from a session low of $71.11, while U.S. crude futures were down 75 cents at $66.64 a barrel.

 


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