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Forex - US North American Summary and Highlights 20 Apr


 20:10 (GMT) 20 Apr

  [Forex Highlights]

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Overview

US North American Summary and Highlights 20 Apr (0100-NGLH-C04)

Market confidence in a safe French election result continued to rise, seeing safehaven bond interest trim, OATs spreads narrow. The euro was in demand, especially vs the yen, early on, but corrected back later.

News highlights

US North American Summary and Highlights 20 Apr (0100-NGLH-C01)

US Apr Philadelphia Fed Survey 22.0 from 32.8 vs Mkt 26

Initial Claims 244k from 234 vs Mkt 240

US Mar Leading Indicator 0.4% m/m from 0.5R vs Mkt 0.2

Fed's Kaplan - 3 hikes in 2017 still a good baseline

US Treasury's Mnuchin said would unveil tax reform plan very soon

Currencies:

EUR/USD pushed higher through the European morning as confidence grows that Macron will be in the French election run-off and is likely to win against either Le Pen or Fillon, with Melenchon drifting out in the polls and the betting. We saw a high at 1.0777 with most of the EUR crosses also higher, though quiet N.American markets were only able to match the earlier high, and after that reversed the early European advance. The reversal came before a shooting incident in Paris.

Talk of EUR/JPY demand (linked to talk of Japanese funds seeking Eurozone bonds, though this not entirely matching expectations that they are fully hedged) and BoJ Chief Kuroda saying the current pace of asset purchases is set to continue for some time gave USD/JPY a lift, but not quite enough to breach expected offers at 109.50.

EUR/GBP saw a high at .8414 but like EUR/USD largely reversed the advance. Cable peaked at 1.2846. There was no data of note in Europe.

Even EUR/CHF managed a move over 1.07 to 1.0719, no obvious sign of the SNB and we suspect sellers never too far away.

NZD spent the session giving back the gains made on the CPI data, NZD/USD still on the .70 handle but AUD/NZD comfortably back over 1.0700 with AUD/USD getting close to .7550. USD/CAD remains underpinned but peaked at 1.3499, showing little response to comments from Trudeau and Trump over a dispute over dairy trade.

All very quiet in Scandinavia, EUR/SEK holding over 9.60, the NOK still lagging slightly after Wednesday's tumble in crude.

US North American Summary and Highlights 20 Apr (0100-NGLH-C02)

Bonds:

US North American Summary and Highlights 20 Apr (0100-NGLH-C03)

USTs moved in step with the French led moves, also as equities saw yet another bounce off the oil-led sell-off, keeping chop going. US10s test back to circa 2.25%. Data with a post Dec low on the Philly Fed, if mixed details, was shrugged off. 2s +1.6bps @ 1.19%, 5s +3.0bps @ 1.77%, 10s +2.5bps @ 2.24%, 30s +1.7bps @ 2.89%.

Agency Spreads: Freddie/Fannie 5s +0.5/+0.6 bps, 10s -0.2/-0.5 bps.

Swap Spreads: 2s +1.83bps, 5s +1.38bps, 10s +2.00bps.

Equities:

Deja vu with another bounce back towards MA support turned resistance, supported by easing risk aversion into the w/e event risk. Amex helped bolster financials again, with earnings generally proving supportive. The S&P closed +0.76%, Mnuchin's tax cut talk also supportive.

Still To Be Released -

Data:

04:30 GMT - JP: METI Tertiary activity index (Feb) % m/m (Mkt 0.3 Prev: 0)

06:00 GMT - NO: Trade Balance (Mar) NOK bn (Mkt Prev: 23.5)

07:00 GMT - FR: Manufacturing PMI (Prelim) (Apr) index (Mkt 53.1 Prev: 53.3)

07:00 GMT - FR: Services PMI (Prelim) (Apr) (Mkt 57 Prev: 57.5)

07:30 GMT - DE: Manufacturing PMI (Prelim) (Apr) (Mkt 58 Prev: 58.3)

07:30 GMT - DE: Services PMI (Prelim) (Apr) (Mkt 55.5 Prev: 55.6)

08:00 GMT - EU: Composite PMI (Prelim) (Apr) 4cast: 56.6index (Mkt 56.4 Prev: 56.4)

08:00 GMT - EU: Current Account (nsa) (Feb) EUR bn (Prev: 2.5)

08:00 GMT - EU: Current Account (sa) (Feb) EUR bn (Prev: 24.1)

08:00 GMT - EU: Manufacturing PMI (Prelim) (Apr) 4cast: 56.4index (56 Prev: 56.2)

08:00 GMT - EU: Services PMI (Prelim) (Apr) 4cast: 56.2index (Mkt 55.9 Prev: 56)

08:30 GMT - UK: Retail Sales (ex Auto Fuel) (Mar) 4cast: -0.2% m/m (Mkt -0.5 Prev: 1.3)

08:30 GMT - UK: Retail Sales (ex Auto Fuel) (Mar) 4cast: 4.1% y/y (Mkt 3.8 Prev: 4.1)

08:30 GMT - UK: Retail Sales (inc Auto Fuel) (Mar) 4cast: 1.5% m/m (Mkt -0.5 Prev: 1.4)

08:30 GMT - UK: Retail Sales (inc Auto Fuel) (Mar) 4cast: 3.7% y/y (Mkt 3.3 Prev: 3.7)

08:30 GMT - IT: Current Account (Feb) 4cast: EUR mn (Prev: -1913)

12:30 GMT - CA: CPI (Mar) 4cast: 0.4% m/m (Mkt 0.4 Prev: 0.2)

12:30 GMT - CA: CPI (Mar) 4cast: 1.8% y/y (Mkt 1.8 Prev: 2)

13:45 GMT - US: Manufacturing PMI (Prelim) (Apr) (Mkt 53.5 Prev: 53.3)

14:00 GMT - US: Existing home sales (Mar) 4cast: 5.75mn (Mkt 5.55 Prev: 5.48)

Events & Auctions:

00:30 GMT - NZ: Bloomberg April Economic Survey

10:00 GMT - UK: Bills auction

11:45 GMT - UK: BoE Saunders Speaks in London

13:30 GMT - US: Fed's Kashkari Speaks in St. Paul


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