Market Review - 15/04/2014 22:42GMT
U.S. dollar ends mixed ahead of Wednesday's China GDP data
The Japanese yen rose initially versus most major peers in Asian session on Tuesday as Ukraine unleashed an offensive to dislodge militants from its eastern area and authorities in Kiev said Russian troops were sighted, fueling investor demand for safety.
However, Japan's currency pared gains versus the dollar after Nikkei said the government will downgrade its economic assessment in a report this week. U.S. dollar rebounded to an intra-day high of 101.99 in New York morning after the release of U.S. CPI data before falling to 101.50 due to the selloff in global stock markets.
Germany's DAX fell sharply by 1.7% or 165 points to close at 9174, however, U.S. Dow Jones index pared earlier more than 100 points decline and turned into positive territory in the afternoon.
The single currency dropped briefly below Monday's low at 1.3809 to 1.3790 in Europe after release of lower-than-expected Germany ZEW (The Centre for European Economic Research) economic expectations survey before rebounding to 1.3833 on short-covering partly due to the release of U.S. CPI. The ZEW Apr survey came in at 43.2 vs consensus of 45.0. The U.S. consumer price index m/m and y/y were higher than forecast at 0.2% and 1.5% versus expectations of 0.1% and 1.4% respectively in March. The so-called core CPI, excluding volatile energy and food components, also rose 0.2%. Another report on Tuesday showed confidence among homebuilders remained dour in April. The NAHB/Wells Fargo Housing Market index rose only a point to 47. The pair later traded sideways in quiet U.S. session.
The British pound proved quite tricky to trade on Tuesday. Despite an initial spike down to 1.6657 (Reuters) after data showed U.K. inflation fell to its lowest level in 4-years, traders quickly bought sterling as most investors feared the data would be much worse. Cable swiftly pared its losses and rose to 1.6731 in European morning and then 1.6749 in New York before retreating.
Australian dollar fell slid versus U.S. currency after minutes of the Reserve Bank of Australia's April meeting showed policy makers reiterated the most prudent course would probably be a period of steady interest rate together with China's money supply grew at the slowest pace on record.
In other news, Fed's Chair Janet Yellen said 'Fed considering additional measures to address remaining stability risks of wholesale funding market; some measures such as minimum margin requirements could apply on market-wide basis; new liquidity capital for banks do not fully address stability concerns of wholesale funding; standards do not focus on financial system as a whole, do not apply directly to shadow banks.'
Trading was relatively thin on Tuesday as investors are awaiting speeches from Bank of Japan Governor Haruhiko Kuroda and Fed's Chair Yellen respectively and also the release of China's gross domestic product data on Wednesday. China's GDP is expected to come in at 7.3% last quarter from a year earlier, the least since 2009.
Wednesday will see the release of New Zealand CPI, Australia leading index, China business climate, entrepreneur confidence index, retail sales, Industrial production, GDP, Italy trade balance, current account, EU CPI, U.K. claimant court, weekly earning, unemployment rate, EU CPI, U.S. housing starts, building permits, industrial production, capacity utilization and Canada rate decision.
U.S. dollar ends mixed ahead of Wednesday's China GDP data
The Japanese yen rose initially versus most major peers in Asian session on Tuesday as Ukraine unleashed an offensive to dislodge militants from its eastern area and authorities in Kiev said Russian troops were sighted, fueling investor demand for safety.
However, Japan's currency pared gains versus the dollar after Nikkei said the government will downgrade its economic assessment in a report this week. U.S. dollar rebounded to an intra-day high of 101.99 in New York morning after the release of U.S. CPI data before falling to 101.50 due to the selloff in global stock markets.
Germany's DAX fell sharply by 1.7% or 165 points to close at 9174, however, U.S. Dow Jones index pared earlier more than 100 points decline and turned into positive territory in the afternoon.
The single currency dropped briefly below Monday's low at 1.3809 to 1.3790 in Europe after release of lower-than-expected Germany ZEW (The Centre for European Economic Research) economic expectations survey before rebounding to 1.3833 on short-covering partly due to the release of U.S. CPI. The ZEW Apr survey came in at 43.2 vs consensus of 45.0. The U.S. consumer price index m/m and y/y were higher than forecast at 0.2% and 1.5% versus expectations of 0.1% and 1.4% respectively in March. The so-called core CPI, excluding volatile energy and food components, also rose 0.2%. Another report on Tuesday showed confidence among homebuilders remained dour in April. The NAHB/Wells Fargo Housing Market index rose only a point to 47. The pair later traded sideways in quiet U.S. session.
The British pound proved quite tricky to trade on Tuesday. Despite an initial spike down to 1.6657 (Reuters) after data showed U.K. inflation fell to its lowest level in 4-years, traders quickly bought sterling as most investors feared the data would be much worse. Cable swiftly pared its losses and rose to 1.6731 in European morning and then 1.6749 in New York before retreating.
Australian dollar fell slid versus U.S. currency after minutes of the Reserve Bank of Australia's April meeting showed policy makers reiterated the most prudent course would probably be a period of steady interest rate together with China's money supply grew at the slowest pace on record.
In other news, Fed's Chair Janet Yellen said 'Fed considering additional measures to address remaining stability risks of wholesale funding market; some measures such as minimum margin requirements could apply on market-wide basis; new liquidity capital for banks do not fully address stability concerns of wholesale funding; standards do not focus on financial system as a whole, do not apply directly to shadow banks.'
Trading was relatively thin on Tuesday as investors are awaiting speeches from Bank of Japan Governor Haruhiko Kuroda and Fed's Chair Yellen respectively and also the release of China's gross domestic product data on Wednesday. China's GDP is expected to come in at 7.3% last quarter from a year earlier, the least since 2009.
Wednesday will see the release of New Zealand CPI, Australia leading index, China business climate, entrepreneur confidence index, retail sales, Industrial production, GDP, Italy trade balance, current account, EU CPI, U.K. claimant court, weekly earning, unemployment rate, EU CPI, U.S. housing starts, building permits, industrial production, capacity utilization and Canada rate decision.
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