Date: APRIL24, 2018
Daily World Economic and Financial News
(CNBC) APRIL24, 2018 ---- The dollar set a three-month high against a basket of currencies on Tuesday, having gained a boost as the U.S. 10-year Treasury yield climbed toward the psychologically key 3 percent level. The U.S. 10-year Treasury yield hit its highest in over four years at 2.998 percent on Monday, driven by worries about the growing supply of government debt and inflationary pressures from rising oil prices. The U.S. 10-year bond yield later backed off that level a bit and stood at 2.971 percent in Tuesday's early Asian trade. The rise in Treasury yields has caused U.S.-Japan and U.S.-German yield differentials to widen in the dollar's favour, leaving the yen and the euro lower.
(CNBC) APRIL24, 2018 ---- The dollar's index against a basket of six major currencies rose to as high as 91.054 in early Asian trade, its strongest level since Jan. 12. The dollar index last stood at 91.035, up 0.1 percent on the day. Against the yen, the dollar rose 0.1 percent to 108.86 yen. On Monday, the dollar had surged nearly 1 percent on Monday for its biggest daily percentage rise in almost a month. The yen, a safe haven currency that tends to rise in times of economic uncertainty but weakens when investor confidence returns, has come under pressure in recent sessions as worries over geopolitical risks and global trade tensions eased.
(CNBC) APRIL24, 2018 ---- The euro eased 0.2 percent to $1.2189. It set a low of $1.21875, the lowest for the common currency since March 1. The euro had enjoyed a strong rally until February before finding itself stuck in a trading range with the dollar after the European Central Bank cautioned investors expecting it to raise rates sooner than expected. The ECB holds its monetary policy meeting on Thursday.
(CNBC) APRIL24, 2018 ---- Spot gold fell 0.79 percent to $1,324.20 per ounce, having touched a two week low of $1,323.61. U.S. gold futures for June delivery fell 0.92 percent to $1,326 per ounce.
(CNBC) APRIL24, 2018 ---- Oil prices turned positive in volatile trade on Monday, shaking off early losses to set new highs going back more than three years. U.S. West Texas Intermediate (WTI) crude futures finished Monday's session up 24 cents at $68.64 a barrel, eking out a new closing high going back to Dec. 1, 2014. Brent crude futures were up 66 cents, or nearly 1 percent, at $74.72 a barrel by 2:29 p.m. ET.
(REUTERS) APRIL24, 2018 ---- Asian stocks bounced from near two-week lows on Tuesday as investors paused for breath following the heavy selling of recent sessions and waited to see if the dollar’s rally was sustainable.
(BLOOMBERG) APRIL24, 2018 ---- Mexico’s peso is all of a sudden the worst performing major currency as investors begin to accept that the next president is likely to be the populist firebrand they feared.
EUR/USD PAIR ANALYSIS
1. Technical Overview
Technically, the pair has broken below the base of the big symmetrical triangle that contained price since last February, and even completed an intraday pullback to it before resuming its decline, usually a sign of a directional continuation, although with the price a few pips below the ascendant trend line, additional signs are needed to confirm it. In the 4 hours chart, the 20 SMA heads south almost vertically, having crossed below the 100 and 200 SMA, while technical indicators have decelerated their declines, but remain within extreme oversold territory, with the RSI currently at 19. As long as it holds below the 1.2245 level, the downside is favored, with a strong support at 1.2160, and the next at 1.2100. A less likely recovery above 1.2260, on the other hand, could see the pair recovering up to 1.2300.
Support levels: 1.2190 1.2160 1.2125
Resistance levels: 1.2260 1.2300 1.2335
2. Fundamental Overview
Data coming from Europe was quite encouraging also, although by that time of the day, the US 10-year note yield was reaching 3.0% and the market totally ignored it. The preliminary April Markit PMIs were in general above expected all through the region, with the manufacturing sector, however, growing less-than-expected, but above final March's reading. In the US, the Chicago Fed National Activity Index for March fell to 0.10 from 0.98 in the previous month, but Markit PMIs came above expected and above the previous figures, while Existing Home sales soared 1.1% in March, all of which gave the greenback additional support.
European equities managed to end the day with modest gains, while US indexes opened with a positive tone, having hovered around their opening levels all through the day. As for yields, a pullback ahead of the opening take them down to 2.96%, but afterward returned to their highs, keeping the dollar near its highs across the board. This Tuesday, Germany IFO survey is expected to show that confidence shrunk further in the region this month. Also, the US will release some housing data and regional manufacturing indexes that won't affect the greenback negatively in the case of misses, as long as yields keep leading the way. (FXSTREET)
International & Financial Terms
1. Original Maturity: Time to maturity of a security at the date on which it was issued.
2. Secured Loans: Loans in support of which some specific property belonging to the debtor is charged.
3. Stabilization: The process of stabilizing the price of new issues in the secondary market.
4. Venture Capital: Fund used for investment in companies where there is a degree of financial risks.
Compiler: A Bank Dealing Room Section
Management of International Deputy The Expert In Charge Of Dealing Room