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Europe Roundup: Sterling eases amid persisting Brexit concerns, euro at 8-day low on weak manufacturing surveys, European shares surge - Thursday, April 18th, 2019

Posted at 18 April 2019 / Categories Market Roundups

Market Roundup

• EUR/USD -0.40%, USD/JPY -0.13%, GBP/USD -0.27%, EUR/GBP -0.13%
   
• DXY 0.31%, DAX 0.34%, FTSE -0.25%, Brent -0.20%, Gold 0.15%
   
• EZ Apr Markit Mfg Flash PMI, 47.8, 47.9 f'cast, 47.5 prev
   
• EZ Apr Markit Serv Flash PMI, 52.5, 53.2 f'cast, 53.3 prev
   
• EZ Apr Markit Comp Flash PMI, 51.3, 51.8 f'cast, 51.6 prev
   
• France Apr Markit Mfg Flash PMI, 49.6, 50.0 f'cast, 49.7 prev
   
• Germany Apr Markit Mfg Flash PMI, 44.5, 45.0 f'cast, 44.1 prev
   
• Germany Mar Producer Prices YY, 2.4%, 2.7% f'cast, 2.6% prev
   
• Great Britain Mar Retail Sales YY, 6.7%, 4.6% f'cast, 4.0% prev
   
• Great Britain Mar Retail Sales MM, 1.1%, -0.3% f'cast, 0.4% prev, 0.6% rvsd
   
• UK should "cool down", drop Brexit - Socialist candidate to head EU Commission
   
• Release of long-awaited Mueller report on Russia a watershed moment for Trump
   

Economic Data Ahead

• (0830 ET/1230 GMT) The U.S. Commerce Department is expected to report that retail sales rose 0.9 percent in March after falling 0.2 percent in February. While excluding autos, retail sales are likely to have gained 0.7 percent, after easing 0.4 percent in the previous month.
   
• (0830 ET/1230 GMT) The number of Americans filing for unemployment benefits is likely to have increased by 9,000 to a seasonally adjusted 205,000 for the week ended Apr. 12, while continuing claims for the week ended Apr. 5 is expected to rise to 1.720 million from a previous reading of 1.713 million.
   
• (0830 ET/1230 GMT) Philadelphia Federal Reserve manufacturing survey is likely to show that business activity decreased to 10.4 in April from 13.7 in March.
   
• (0830 ET/1230 GMT) Statistics Canada is expected to report that retail sales gained 0.4 percent in February after falling 0.3 percent in January. While excluding autos, retail sales are likely to have risen 0.2 percent, after advancing 1.4 percent in the previous month.
   
• (0830 ET/1230 GMT) Payrolls processor ADP releases Canada employment report for the month of March. The report showed that 36,200 jobs were added in February.
   
• (0945 ET/1345 GMT) Financial firm Markit releases U.S. preliminary Manufacturing PMI for the month of April. The index is likely edged up to 52.8 after posted a final reading of 52.4 in the previous month.
   
• (0945 ET/1345 GMT) Markit Economics will release preliminary U.S. composite PMI for the month of April. The index posted a final reading of 54.6 in the prior month.
   
• (0945 ET/1345 GMT) Financial firm Markit Economics is likely to report that preliminary U.S. service PMI business activity index eased to 55.0 in April after printing a final reading of 55.3 in March.
• (1000 ET/1400 GMT) The U.S. Commerce Department is expected to report that business inventories rose 0.4 percent in February after rising 0.8 percent in January.
   
• (1030 ET/1430 GMT) The Energy Information Administration (EIA) reports its Natural Gas Storage for the week ending April 12.
   

Key Events Ahead

• (1210 ET/1610 GMT) Federal Reserve Bank of Atlanta President Raphael Bostic participates in converstion before the Economic Roundtable in Jacksonville, Florida

FX Beat

DXY: The dollar index rallied to a 10-day peak as the euro plunged on weak manufacturing surveys, while sterling eased on persisting Brexit concerns. The greenback against a basket of currencies traded 0.3 percent up at 97.28, having touched a high of 97.33 earlier, its highest since Apr. 8. FxWirePro's Hourly Dollar Strength Index stood at 59.11 (Bullish) by 1100 GMT.

EUR/USD: The euro plunged to an 8-day low after data showed businesses across the eurozone stumbled into the second quarter raising concerns about an economy struggling to gain traction. The European currency traded 0.4 percent down at 1.1252, having touched a low of 1.1243 earlier, its lowest since Apr. 10. FxWirePro's Hourly Euro Strength Index stood at -3.00 (Neutral) by 1100 GMT. Immediate resistance is located at 1.1331 (Mar. 25 High), a break above targets 1.1361 (Mar. 19 High). On the downside, support is seen at 1.1213 (Mar. 28 Low), a break below could drag it till 1.1183 (Apr. 2 Low).

USD/JPY: The dollar eased as weak manufacturing surveys from Asia and Europe stoked fears of a slowdown in global growth, adding to profit taking ahead of the long Easter weekend. The major was trading 0.1 percent down at 111.92, having hit a high of 112.16 on Wednesday, its highest since Dec. 20. FxWirePro's Hourly Yen Strength Index stood at 83.12 (Slightly Bullish) by 1100 GMT. Investors’ will continue to track the broad-based market sentiment, ahead of the U.S. retail sales, unemployment benefit claims, business inventories, Markit prelim PMI's and Fed Bostic's speech. Immediate resistance is located at 112.60 (Dec. 20 High), a break above targets 113.24 (Dec. 5 High). On the downside, support is seen at 111.20 (Apr. 3 Low), a break below could take it lower at 110.53 (Mar. 20 Low).

GBP/USD: Sterling slumped to a near 2-week low, despite British retail sales volumes surging by the most in nearly two-and-a-half years in annual terms, leaping by 6.7 percent in March. The major traded 0.2 percent down at 1.3013, having hit a low of 1.3002 earlier, it’s lowest since Apr. 5. FxWirePro's Hourly Sterling Strength Index stood at -55.40 (Bearish) 1100 GMT. Immediate resistance is located at 1.3121 (Apr. 5 High), a break above could take it near 1.3149 (Apr. 1 High). On the downside, support is seen at 1.3000, a break below targets 1.2976 (Mar. 29 Low). Against the euro, the pound was trading 0.1 percent up at 86.49 pence, having hit a low of 86.80 on Wednesday, it’s lowest since Mar. 22.

USD/CHF: The Swiss franc tumbled to a 5-1/2-week trough as the greenback rebounded on the back of upbeat U.S. economic data. The major trades 0.05 percent up at 1.0111, having touched a high of 1.0114; it’s highest since Mar. 11. FxWirePro's Hourly Swiss Franc Strength Index stood at -20.15 (Neutral) by 1100 GMT. On the higher side, near-term resistance is around 1.0128 (Nov. 13 High) and any break above will take the pair to next level till 1.0154 (Mar. 8 2017 High). The near-term support is around 1.0055 (5-DMA), and any close below that level will drag it till 0.9967 (Apr. 3 Low)

Equities Recap

European shares surged, supported by strong quarterly results from corporates, while euro slumped on the back of weak manufacturing surveys from Eurozone. 

The pan-European STOXX 600 index rallied 0.2 percent at 390.36 points, while the FTSEurofirst 300 index gained 0.2 percent to 1,534.10 points.

Britain's FTSE 100 trades 0.05 percent down at 7,467.08 points, while mid-cap FTSE 250 gained 0.2 to 19,827.09 points.

Germany's DAX rose 0.5 percent at 12,214.10 points; France's CAC 40 trades 0.3 percent higher at 5,577.81 points.

Commodities Recap

Crude oil prices rose supported by a decline in U.S. inventories, ongoing supply cuts from OPEC and its allies, and U.S. sanctions on Venezuela and Iran. International benchmark Brent crude was trading 0.1 percent higher at $71.63 per barrel by 1052 GMT, having hit a high of $72.25 on Wednesday, its highest since Nov. 8. U.S. West Texas Intermediate was trading 0.05 percent up at $63.75 a barrel, after rising as high as $64.77 last week, its highest since the Nov. 1.

Gold prices rose, hovering away from a near 4-month low touched earlier in the session after data showing euro zone businesses were under pressure stoked concerns about global growth. Spot gold was trading 0.1 percent up at $1,275.20 per ounce by 1057 GMT, having touched a low of $1,271.07, its lowest since Dec. 27.

Treasuries Recap

The German 10-year bond yields eased three basis points to 0.05 percent, dropping further off Wednesday's high of 0.10 percent.

The Japanese government bonds bounced from yesterday's sell-off, with JGB futures up nine ticks from yesterday's close to open at 152.46. The yield on the 30-year fell 1.5bp to 0.555 percent in early trade, while 20-year yields dipped 0.5bp to 0.39 percent.