Daily Sentiment Index
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rss10-year bund yields back to positive territory as last week’s bond rally continues to fizzle
Germany’s 10-year bond yields inch back up to just above 0% again
The bond rally last week continues to fade as yields are continuing to rise further this week. With Treasury yields higher across the curve and risk sentiment more optimistic today, bunds are no exception and we’re seeing 10-year yields come back up to the 0% level again.
Across the board, risk assets are continuing to perform well with European equities posting gains near 1% in major indices while 10-year Treasury yields are up by 4.5 bps now to 2.52%. Meanwhile, US equity futures are also trading at the highs up by around 0.6%.
That is leading to further softness in the likes of the dollar and yen on the day as markets continue to focus on risk sentiment in trading so far.
USDJPY goes sideways with the 200 day MA as the ceiling
Tiny trading range of 17 pips
The USDJPY is in the midst of a tiny 17 pip trading range. That is well below the 56 pip 22-day average range. The good news is buyers and sellers are not losing much. The bad news is they are not making much either.
Technically, the high has a ceiling at the 200 day MA. Yesterday, that MA (see green line overlay on the hourly chart at 111.45) stalled the rally. The high in the Asian session today, also stalled at that MA level. The London high has only gotten to 111.416. The lows today have come in at 111.28 to 111.287 (four separate lows – see red circles).
Something has to give. Look for a break. Which way? Honestly….I have no clue. It would just be a guess given the market price action. The “market” doesn’t know. I don’t know either.
The US yields are lower to day after the sharp run higher yesterday but only by about 2 bps in the 10 year (that is a slight negative usually). US stocks are modestly changed with the Dow down and the S&P and Nasdaq holding onto small gains (neutral. The USDJPY can move higher with runaway stocks to the upside and lower on runaway stocks to the downside, but that is not happening so far).
So look for the break and some sort of extension of the 17 pip trading range at some point.
The USD is the strongest. The GBP is the weakest.
The JPY is stronger
As the North American traders enter for the day, the USD is the strongest while the GBP is the weakest. The GBP was hit after the “no” votes after the close yesterday. Everyone says they want a no-deal, but they cannot agree on anything. So the drama continues. The USD and JPY are stronger with perhaps some flight to safety flows.
Looking at the ranges and changes, the USDJPY, USDCHF, EURUSD, and USDCAD are barely moving with ranges from low to high of 17 toof 32 pips. That is not a lot. The AUDUSD moved lower overnight after the RBA decision and statement (unchanged on rates but downside risk increased) and has a decent range (at least it is above the 22 day average). The GBPUSD is trading at lows for the day as it moves to new lows as I type. It has a range of about 100 pips so far. Other GBP pairs are also trading at the GBP low extremes.
In other markets:
- The Bitcoin rocket was lit, as the digital currency rose to $5121 on Coinbase from a low of $4127.20. The price is currently trading at $4783.19 up $654.70. The midpoint of the move up today comes in at $4645.22. I always like to see the miidpoint to be a barometer for a trend move. Stay above keeps that hope alive. Move below and the buyers in the upper half start feeling worried. So far the 50% has held (see chart below)
- spot gold is trading up $1.20 or 0.09% at $1288.96
- WTI crude oil futures are trading at $.29 or 0.47% at $61.88
IN the premarket for US stocks the futures are implying small changes
- Dow industrial average -0.42 points
- NASDAQ, +7 points
- S&P +1.9 points
In the European stock markets, major indices are higher with the UK FTSE liking the lower GBP:
- German DAX, +0.6%
- France’s CAC, 0.48%
- UK’s FTSE, +1.08%
- Spain Ibex, +0.33%
- Italy’s FTSE MIB, unchanged
South Korean official says North Korea could be on the brink of a missile launch
Report in the Korea JoongAng Daily
- North Korea could be on the brink of a missile launch from a pad on its western coast
- A series of ominous signs – the foremost being the near complete restoration of a missile launch site on the western coast – is fueling speculation
- Backing up a briefing made by Seoul’s spy chief, Suh Hoon, at South Korea’s National Assembly last Friday, the official said the North’s reconstruction of the Sohae Satellite Launching Station, which started in February, is effectively complete, and a launch only needs a go-ahead from leader Kim Jong-un.
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Korea JoongAng Daily is the English language version of the South Korean national daily newspaper is the English language version of the South Korean national daily newspaper
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Yen has ticked a few points stronger … assuming its related to this report. Might not be.
USDJPY reaches the 200 day MA target at 111.44
Look for some additional profit taking against the key MA level.
The USDJPY has reached the 100 day MA target at 111.443. The high price just reached 111.438
I would expect the target would be a tough nut to crack on the first look. Look for selllers/profit takers against the level with a stop above. If the price can stay below the 200 day MA, a wander down toward the 38.2% at 111.19 and the Asian high at 111.18 would be the target (see the 5-minute chart below).
SNB total sight deposits w.e. 29 March CHF 576.1 bn vs CHF 575.9 bn prior
Latest data released by the SNB – 1 April 2019
- Domestic sight deposits CHF 488.5 bn vs CHF 489.3 bn prior
Prior week’s release can be found here. Not much change there to the sight deposits data and that suggests the SNB hasn’t really been busy intervening in markets just yet. However, with EUR/CHF on the verge of cracking through a key support level below 1.1200 it’s best to be wary of the potential for them to step in.
China 10 year benchmark yield rise 5.6 Bps
Crucial Update :Dollar Index ,Euro ,Yen ,GBP ,AUD ,INR ,CAD ,CRUDE ,SPX ,DJIA ,NASDAQ COMPOSITE ,FAANG Stocks -Anirudh Sethi
The US dollar rose against most of the major currencies in the last week of March. The stronger than expected January GDP (0.3%) helped lift the Canadian dollar (~0.6%), which was the notable exception. The Australian dollar’s rise ahead of the weekend and the end of Q4 allowed it to secure a small gain for the week (~0.2%).
The risk that the UK leaves the EU without a deal seemed to many to have increased after a majority of the House of Commons failed to back any alternative, including the Withdrawal Bill for the third (and possibly not the last) time. This saw sterling briefly trade below $1.30. We still think a longer extension the leads to a softer and later UK exit will eventually be negotiated and that this will be seen as sterling positive. The Reserve Bank of New Zealand confirmed what many market participants had suspected, namely that the next move in rates is probably a cut. This sent the New Zealand dollar lower, and after sterling’s 1.3% decline, its 1.1% decline was the second largest among the major currencies. Around $0.6800, it is in the middle of the two-cent range that that largely confined it in Q1.
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After Turkey and Brazil, pay attention to the Indian rupee
