USDCAD moves to new session low

Falls below the 200 hour MA

The USDCAD has moved to a new session low after cracking below its 200 hour MA. That MA stalled at the 200 hour MA on Friday and again today.
Falls below the 200 hour MA

The 100 hour MA (blue line) is at 1.33507 and is the next target.  The 50% is at 1.33488 and is another target to get through.

Russia’s Dmitriev: OPEC+ could decide to raise oil output at June meeting

Russia and Saudi Arabia are shooting from two different angles

  • Market situation is improving, stocks are falling though
  • Output increase would not mean end of OPEC+ oil market coordination
Kirill Dmitriev is one of the main architects of Russia’s agreement with OPEC, so for him to come out and say this it could have some weight on the discussion in May/June. Do take note that his previous stance was that it was too early to comment on exiting production cuts, whereas now he’s talking about increasing production instead.
As mentioned earlier, Russia basically only has one foot in the circle when it comes to working with OPEC at the moment so it’s not too surprising to see them to make such remarks. But it isn’t going to be something that oil prices will like if such sentiment starts to gain more traction in the coming weeks.

Saudi oil minister says OPEC+ commitment to reducing inventories remain unchanged

Comments by Saudi oil minister, Khalid Al-Falih

  • Venezuela, Iran sanctions waivers have an impact on markets
  • OPEC+ to hold ‘key meeting’ in May
  • Premature to say that OPEC+ has consensus to extend output cuts
As the April meeting has been cancelled, OPEC+ will be hosting its next JMMC meeting in May and will be discussing on whether or not to extend output cuts beyond the summer. With Russia only having one foot in the circle, I wouldn’t be surprised if they do reach a deal to extend said cuts until the end of the year.
Oil remains buoyed on the day, with Brent rising comfortably above the $70 handle at the moment following tensions seen in Libya.

Eurostoxx futures -0.4% in early European trading

Softer tones observed in early trades

  • German DAX futures -0.6%
  • French CAC 40 futures -0.2%
  • UK FTSE futures -0.4%
This very much keeps in tune with the way risk sentiment has been having in the latter hours of Asian trading. The softer tone here is continuing to keep the likes of the yen slightly underpinned to start the European morning.
US equity futures are also still trading lower, down by 0.2% at the moment:
E-minis 08-04

Nikkei 225 closes lower by 0.21% at 21,761.65

Tokyo’s main index closes slightly lower in sluggish session for Asian equities

Nikkei 08-04

The index gets rejected by the 200-day moving average (blue line) as stocks retreated following gains seen earlier in the Asian morning. Risk sentiment is looking a bit jittery as markets hit the reset button after a more solid performance in Wall Street last Friday.

The softer risk tones is helping to keep the yen on the front foot as we begin the European morning. USD/JPY holds near the lows for the day still at 111.42 currently.

China to potentially cut RRR further this month?

The firm notes that China will likely use a targeted reduction in RRR to inject liquidity as a batch of medium-term loans previously offered by the PBOC is set to mature during the month. Adding that the Chinese central bank will also lower funding costs by using the targeted medium-term lending facility.

For some context, cash supply in China looks set to tighten in the coming weeks as there will be about ¥367 billion of MLFs set to mature.
It’s not uncommon for the PBOC to pursue this measure especially in times when they perceive liquidity to be a bit stricken, as we saw earlier this year – where they hinted that the 100 bps cut at the time was “not a big stimulus” i.e. expect more to come.
In case you’re wondering, China cut its RRR by 250 bps throughout 2018 in efforts to keep the economy growing steadily. Prior to that, the last cut was only seen in 2016.

Nissan shareholders strip Ghosn of final title as director

Shareholders of Nissan voted to remove Carlos Ghosn from its board after his fourth arrest last week, formally ousting the man who rescued and led the Japanese carmaker for the past two decades.

Monday’s extraordinary meeting of shareholders set the stage for Nissan to revamp its board with stronger governance safeguards to address a crisis that has shaved 7 per cent off its share price, eroded its brand and crippled its ties with its French partner Renault since the former chairman’s November arrest.

Jean-Dominique Senard also won shareholder approval to join the Japanese group’s board as Renault’s new chairman seeks to restore trust within the three-way alliance with Nissan and Mitsubishi Motors.

During the three-hour meeting, shareholders vented their anger against Hiroto Saikawa, Nissan’s chief executive, and other executives for overlooking Mr Ghosn’s misconduct for nearly a decade, with one male investor calling for the company’s entire board to step down.

“We are not saying that we have no responsibility. We take the issue very seriously,” Mr Saikawa said as he offered his apology. But he reiterated that he plans to focus on stabilising relations with Renault and rebuild the company’s governance structure. Continue reading »

Dr. Copper gives troubling prognosis for China’s economy

While recent economic data has brought a ray of hope into the otherwise gloomy Chinese economy, one closely followed indicator is tempering expectations of a vigorous rebound in the world’s second-largest economy.

China’s manufacturing sector unexpectedly rebounded in March, according to the government’s purchasing managers index (PMI), but copper prices, often viewed as an early indicator of China’s economic health, are struggling to perk up.

Since copper is used in a wide range of industries, the commodity is called Dr. Copper for being a reliable prognosticator of where the world economy is heading. Many market players closely watch copper prices as a good gauge of the economic outlook in China. The country accounted for about half the 23.46 million tons of copper consumed worldwide in 2017, up from just 25% a decade earlier.

Continue reading »