The US Dollar and Japanese Yen are reclaiming outright safe-haven status, soaring against the majors as broad-based risk aversion grips financial markets.
Talking Points
US Dollar, Yen Rise as Risk Aversion Grips Financial Markets
S&P 500 Index Futures Hint Sentiment to Stay Under Pressure
US Empire Manufacturing Data, Citigroup Q1 Earnings on Tap
The US Dollar and Japanese Yen outperformed in overnight trade as broad-based risk aversion carried forward from Friday. Not surprisingly, higher-yielding and cycle-sensitive Australian, Canadian and New Zealand Dollars suffered the brunt of the selloff in the FX space. The MSCI Asia Pacific regional benchmark stock index fell 0.7 percent.
As we discussed in our weekly forecast, the move may reflect a market-wide shift in sentiment trends as signs of renewed weakness emerging in the March set of US economic data compound lingering recession in the Eurozone. Taken together with today’s disappointing set of Chinese GDP figures, this suggests all three of the world’s top growth engines (and over half of global GDP) are flashing warning signs.
Looking ahead, S&P 500 index futures are pointing sharply lower, hinting more of the same is likely ahead. The economic calendar is relatively quiet, offering little in terms of event risk to break the markets’ momentum. The US Empire Manufacturing gauge is set to show factory-sector activity in New York State slowed in April. Citigroup Inc is also due to deliver its first-quarter earnings report, with traders keeping a close eye on the bank’s forward guidance to help handicap global financial health trends.
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Asia Session:
GMT
CCY
EVENT
ACT
EXP
PREV
22:30
NZD
Performance Services Index (MAR)
55.4
–
55.5
23:01
GBP
Rightmove House Prices (YoY) (APR)
0.4%
–
1.2% (R-)
23:01
GBP
Rightmove House Prices (MoM) (APR)
2.1%
–
1.7%
1:30
AUD
Home Loans (FEB)
2.0%
1.5%
-0.3% (R+)
1:30
AUD
Investment Lending (FEB)
1.8%
–
4.4%
1:30
AUD
Value of Loans (MoM) (FEB)
1.2%
–
1.2%
2:00
CNY
Fixed Assets Inv Excl. Rural YTD (YoY) (MAR)
20.9%
21.3%
21.2%
2:00
CNY
Retail Sales (YoY) (MAR)
12.6%
12.6%
2:00
CNY
Retail Sales YTD (YoY) (MAR)
12.4%
12.5%
12.3%
2:00
CNY
Real GDP YTD (YoY) (1Q)
7.7%
8.0%
7.8%
2:00
CNY
Real GDP (QoQ) (1Q)
1.6%
2.0%
2.0%
2:00
CNY
Real GDP (YoY) (1Q)
7.7%
8.0%
7.9%
2:00
CNY
Industrial Production YTD (YoY) (MAR)
9.5%
10.0%
9.9%
2:00
CNY
Industrial Production (YoY) (MAR)
8.9%
10.1%
2:00
CNY
Business Climate Index (1Q)
125.6
–
124.4
2:00
CNY
Entrepreneur Confidence Index (1Q)
122.4
–
120.4
4:30
JPY
Industrial Production (MoM) (FEB F)
0.6%
–
-0.1%
4:30
JPY
Industrial Production (YoY) (FEB F)
-10.5%
–
-11.0%
4:30
JPY
Capacity Utilization (MoM) (FEB F)
0.7%
–
1.7%
6:00
JPY
Machine Tool Orders (YoY) (MAR F)
-15.7%
–
-21.6%
Euro Session:
GMT
CCY
EVENT
ACT
EXP
PREV
9:00
EUR
Euro-Zone Trade Balance s.a. (€) (FEB)
12.0B
10.0B
8.7B (R-)
9:00
EUR
Euro-Zone Trade Balance (€) (FEB)
10.4B
5.0B
-4.7B (R-)
Critical Levels:
CCY
SUPPORT
RESISTANCE
EURUSD
1.3002
1.3147
GBPUSD
1.5296
1.5388
— Written by Ilya Spivak, Currency Strategist for Dailyfx.com
To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak
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Source: Daily fx