Forex - US North American Summary and Highlights 10 Apr


 20:08 (GMT) 10 Apr

  [Forex Highlights]

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Overview

US North American Summary and Highlights 10 Apr (0101-KKND-C04)

ECB's Draghi was seen as dovish but initial EUR/USD losses were erased as the USD lost ground ahead of the FOMC minutes. The response to the minutes was modest, but the USD corrected higher. Bonds had a generally positive tone, while equities were subdued.

News highlights

- US Mar CPI +0.4% as exp, ex food/energy +0.1% vs 0.2% exp.

- FOMC minutes show majority saw risks warranting rates on hold through 2019, several wanted "patient" to be regularly reviewed.

Currencies:

US North American Summary and Highlights 10 Apr (0101-KKND-C01)

EUR/USD fell back in the afternoon on Draghi's press conference in which he indicated that the ECB would look at the effect of negative rates on bank profits - implying the potential for tiering of rates. This is seen as EUR bearish, and Draghi also maintained a negative tone about the economy which helped push EUR/USD to lows of 1.1230 before rebounding ahead of the FOMC minutes.

Lower UST yields helped drag USD/JPY below 111.00 and that helped the USD generally erase gains that had accompanied post-ECB EUR/USD purchases. The USD corrected higher on FOMC minutes which showed some favoring a rate hike later this year even if the majority view was for no change, though the market response was modest, particularly versus the EUR.

Feb production data from France, Italy and the UK was stronger than expected. Market reaction was modest though EUR/USD did edge higher ahead of the ECB. GBP did see a brief response to the data, but focus was more on the EU summit. Cable advanced above 1.31 and EUR/GBP edged below .86, though the GBP came off more than most after the FOMC minutes.

US North American Summary and Highlights 10 Apr (0101-KKND-C02)

Mar Norwegian CPI was stronger than expected rising 2.7% y/y core basis and 2.9% headline, both well above the 2% target. EUR/NOK fell below 9.60 in response.

AUD/USD extended gains, trading to its highest level since Feb, AUD/CAD edging higher to reach .9550.

Bonds:

US North American Summary and Highlights 10 Apr (0101-KKND-C03)

USTs were pushed richer into supply again as the benign latest core CPI print (0.1475%) combined with European bonds' firming through the dovish ECB press conference. The 10yr auction met with strong demand. FOMC Minutes however were pretty neutral, underscoring the steady dot plot, and so saw yields lift off the lows. 2s -2.4bps @ 2.33%, 5s -2.7bps @ 2.28%, 10s -2.5bps @ 2.48%, 30s -1.2bps @ 2.90%.

Agency Spreads: Freddie/Fannie 5s -0.4/+1.0 bps, 10s +1.9/+0.7 bps.

Swap Spreads: 2s +1.13bps, 5s -0.15bps, 10s -0.50bps.

Equities:

Equities saw technology firm but a mixed picture elsewhere. FOMC minutes saw only a modest response, two way trading but the tone did not significantly change.

To Be Released -

Data

23:01 GMT - UK: RICS Housing Survey (Mar) % (Mkt: -28 Prev: -28)

23:50 GMT - JP: M2 Money Supply (Mar) % y/y (Mkt: 2.4 Prev: 2.4)

06:00 GMT - DE: CPI (Mar F) % m/m (Mkt: 0.4 Prev: 0.4)

06:00 GMT - DE: CPI (Mar F) % y/y (Mkt: 1.3 Prev: 1.3)

06:00 GMT - DE: HICP (Mar F) % m/m (Mkt: 0.5 Prev: 0.5)

06:00 GMT - DE: HICP (Mar F) % y/y (Mkt: 1.4 Prev: 1.4)

06:45 GMT - FR: CPI (Mar F) % m/m (Mkt: 0.8 Prev: 0.8)

06:45 GMT - FR: CPI (Mar F) % y/y (Mkt: 1.1 Prev: 1.1)

06:45 GMT - FR: HICP (Mar F) % m/m (Mkt: 0.9 Prev: 0.9)

06:45 GMT - FR: HICP (Mar F) % y/y (Mkt: 1.3 Prev: 1.3)

07:30 GMT - SE: CPI (Mar) % y/y (Mkt: 1.8 Prev: 1.9)

07:30 GMT - SE: CPIF (Underlying) (Mar) % y/y (Mkt: 1.8 Prev: 1.9)

09:00 GMT - GR: Unemployment (Jan) % (Prev: 18)

10:00 GMT - IE: HICP (Mar) % m/m (Prev: 0.8)

10:00 GMT - IE: HICP (Mar) %y/y (Prev: 0.7)

12:30 GMT - CA: House Price Index (Feb) % m/m (Mkt: 0 Prev: -0.1)

12:30 GMT - US: Initial Claims (06 Apr) k (Mkt: 210 Prev: 202)

12:30 GMT - US: PPI (Mar) 4cast: 0.5% m/m (Mkt: 0.3 Prev: 0.1)

12:30 GMT - US: PPI (ex Food & Energy) (Mar) 4cast: 0.3% m/m (Mkt: 0.2 Prev: 0.1)

Events & Auctions:

ES: New 5y Bono 0.25 07/30/24 (EUR 3.5bn)

ES: Tap of Oblig. 1.85 7/30/35 (EUR 1bn)

EU: ECB's Draghi and Coeure in the IMF/World Bank spring meetings in Washington

UK: BoE's Broadbent and Woods participate in IMF Spring Meetings

SE: Swedish National Bank's Ingves and Skingsley at IMF

06:00 GMT - JP: Auction for Enhanced-Liquidity

09:00 GMT - IT: New BTP 2.1 7/15/26 (EUR 3.75bn)

09:00 GMT - IT: Tap of BTP 1 7/15/22 (EUR 2.5bn)

09:00 GMT - IT: Tap of BTP 3.35 03/1/35 (EUR 1.5bn)

12:45 GMT - WLD: World Bank's Georgieva holds press briefing in Washington

13:30 GMT - US: Fed's Clarida speaks in Washington

13:40 GMT - US: Fed's Bullard speaks in Tupelo

13:45 GMT - US: Fed's Williams speaks in New York

15:30 GMT - US: 4wk Bills Auction (USD 50bn)

15:30 GMT - US: 8wk Bills Auction (USD 35bn)

15:50 GMT - US: Fed's Quarles participates in FSB Roundtable

17:00 GMT - CA: Bank of Canada's Wilkins attends panel

17:00 GMT - US: 30yr Bonds Reopening (USD 16bn)

20:00 GMT - US: Fed's Bowman speaks in San Francisco

23:00 GMT - EU: ECB's Enria speaks in Washington


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