01 Apr 2015

Wednesday 1st April: European Open Briefing

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Global Markets:

  • Asian stock markets: Nikkei down 0.70 %, Shanghai Composite gained 1.40 %, Hang Seng rose 0.60 %; ASX declined 0.50 %

  • Commodities: Gold at $1187.80 (+0.40 %), Silver at $16.70 (+0.60 %), WTI Oil at $47.56 (-0.10 %), Brent Oil at $55.13 (-0.15 %)

  • Rates: US 10 year yield at 1.928, UK 10 year yield at 1.581, German 10 year yield at 0.184

News & Data:

  • Japan Tankan Large Manufacturers Index 12.0, Expected: 14.0, Previous: 12.0

  • Japan Tankan Large Non-Manufacturers Index 19.0, Expected: 17.0, Previous: 16.0

  • Japan Tankan Big Industry CAPEX -1.2 %, Expected: 0.5 %, Previous: 8.9 %

  • Japan Tankan Big Manufacturing Outlook Index 10.0, Expected: 16.0, Previous: 9.0

  • Japan Manufacturing PMI 50.3, Expected: 50.4, Previous: 50.4

  • Australia AIG Manufacturing Index 46.3, Previous: 45.4

  • Australia Building Approvals -3.2 %, Expected: -4.0 %, Previous: 5.9 %

  • China HSBC Manufacturing PMI 49.6, Expected: 49.3, Previous: 49.2

  • China Official Manufacturing PMI 50.1, Expected: 49.7, Previous: 49.9

  • China Official Non-Manufacturing PMI 53.7, Previous: 53.9

  • US Treasury Secretary Lew: Japan & China Not Showing Problematic FX Intervention — BBG

  • Fed’s George: It's Time For Fed To Talk About Rate Lift-off, Need To Pullback On Some Accommodation — RTRS

  • Fed’s George: Not Bothered By Current Level Of Inflation, Expects It To Rise In Next Few years — RTRS

  • Fed’s George: Foreign Monetary Policy Should Benefit The Global Economy, Little Worry Over Dollar Strength — BBG

  • Russian Foreign Minister Lavrov: Envoys Reach Agreement On Main Issues At Iranian Talks — BBG

  • Iranian Agreement To Be Drafted In Coming Days

  • Iran's Zarif: Iran Accord Drafting To Begin Later Today, Have Accomplished Quite A Lot — BBG

  • New Zealand FinMin English: NZD May Weaken VS AUD When Australian Economy Picks Up; Strong NZD Is Challenge For New Zealand Exporters

Markets Update:

The US Dollar weakened overnight after rather mixed US economic data yesterday. While Consumer Confidence beat expectations, the Chicago PMI number was very weak, arriving at 46.3 vs 51.0 expected. A sharp decline in the S&P 500 futures at the Asian open also weighed on sentiment and USD/JPY briefly tested the 119.40 level. Dealers saw some decent USD/CAD position covering in the past two sessions, driven by the slightly better than expected Canadian GDP number and the bounce in oil prices. Many short-term specs have rushed into buying USD/CAD in the past few days, so there is still potential for a further squeeze of CAD shorts. 1.2610 is the next key level to watch and a break below will likely push the pair towards the centre of the range around 1.2540.

EUR/USD sentiment remains negative overall, as worries about Greece are rising again. Offers in decent size expected around the 1.08 level and there is also a big option expiry at that level for today’s NY cut (14:00 GMT).

Upcoming Events (UK Time):

  • 08:15 BST – Spanish Manufacturing PMI (54.7)

  • 08:45 BST – Italian Manufacturing PMI (52.2)

  • 08:50 BST – French Manufacturing PMI (52.4)

  • 08:55 BST – German Manufacturing PMI (51.9)

  • 09:00 BST – Euro Zone Manufacturing PMI (51.9)

  • 09:30 BST – UK Manufacturing PMI (54.3)

  • 13:15 BST – US ADP Nonfarm Employment Change (225k)

  • 14:00 BST – FOMC Member Williams speaks

  • 14:45 BST – US Markit Manufacturing PMI (51.8)

  • 15:00 BST – US ISM Manufacturing PMI (52.5)

  • 15:30 BST – FOMC Member Lockhart speaks