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US dollar trying to find its groove again

Notes/Observations

- Focus remains on rates as trend higher being re-enforced by hopes of a global recovery.

Asia

- RBA left Cash Rate Target unchanged at 0.10% and maintained its 3-year Yield Target at 0.10% (both as expected); Keeps its dovish undertones and put focus on its July meeting whether to retain the April 2024 bond or shift into the November 2024 maturity for its 3-Year Yield Target; to also consider a 3rd QE program at that time.

- Australia Mar Trade Balance: A$5.6B v A$8.2Be.

- Australia MP Ted O'Brien seeks to fight Communist China with boycotts and sanctions.

- Analysts believe that if Australia terminated the lease of Port Darwin to the Chinese early it could kill all future Chinese investment into Australia.

- South Korea CPI moves back above target to its fastest pace since Aug 2017 (YoY: 2.3% v 2.1%e).

Coronavirus

- Total global cases 153.2M; total deaths: 3.2M.

- New York, New Jersey, and Connecticut will lift most of their pandemic restrictions on businesses by mid-May.

Europe

- UK and India said to announce a preliminary £1.0B trade deal.

Americas

- Fed Chair Powell stated that the economy was not out of the woods yet, but making real progress. Economic outlook had "clearly brightened".

- Treasury Q2 financing estimates: Treasury to borrow $463B from April to June v $95B estimated in Feb v $401B q/q.

Speakers/Fixed income/FX/Commodities/Erratum

Equities

Indices [Stoxx600 -0.03% at 439.80, FTSE +0.51% at 7,005.15, DAX -0.61% at 15,143.65, CAC-40 +0.20% at 6,320.41, IBEX-35 +0.67% at 8,953.00, FTSE MIB 0.00% at 24,420.50, SMI -0.26% at 11,090.13, S&P 500 Futures -0.18%].

Market Focal Points/Key Themes: European indices open higher across the board but later turned around to trade mixed; sectors leading to the upside include materials and real estate; while sectors that are weighing on the indices include technology and consumer discretionary; earnings expected in the upcoming US session include Ferrari, Conoco Philips, Pfizer and Under Amour.

Equities

- Consumer discretionary: Pandora [PNDORA.DK] +5% (earnings; buyback), HelloFresh [HFG.DE] -4% (earnings).

- Industrials: Telenor [TEL.NO] -2% (earnings).

- Technology: AMS [AMS.CH] +6% (trading update), Infineon [IFX.DE] +5% (earnings; raises outlook), TeamViewer [TMV.DE] -7% (earnings).

Speakers

- ECB's Villeroy (France) stated that should avoid exaggerating alarm over business insolvencies. No evidence that bankruptcies will go beyond catching up from 2020 lows.

- Bank of France Climate stress test for banking sector: Exposure to climate risks was moderate.

- German Association of Chambers of Trade and Industry (DIHK) saw 2021 export growth at 8.0%.

- Bank of Korea (BOK) Apr Minutes saw one member note that it was premature to discuss normalizing policy. One member saw more upside risks compared to downside risks for economy.

Currencies/ Fixed income

- USD continued to hold onto its recent gains as various Fed members noted the US economic outlook had "clearly brightened". Focus on upcoming job reports later in the week (ADP on Wed, and non-farm on Friday). Greenback aided by some safe-haven flows as recent positive developments in US and Europe being offset by worsening virus situation in Asia region. Dealers noted interest rates will be forced higher by a roaring U.S. economic recovery and support the greenback.

EUR/USD tested below the 1.20 level.

- The RBA decision put in play the July meeting where the RBA to consider at the July meeting whether to retain the April 2024 bond as the target bond for the three-year yield target or shift to the next maturity, the November 2024 bond. It will also decide on a third QE program. AUD softer as RBA did upgrade its forecasts for the local economy but still predicted no tightening until at least 2024.

Economic data

- (FI) Finland Mar Unemployment Rate: 8.1% v 8.1% prior.

- (FI) Finland Mar House Price Index M/M: 0.7% v 0.6% prior; Y/Y: 2.4% v 1.5% prior.

- (RU) Russia Apr PMI Manufacturing: 50.4 v 51.5e (4th month of expansion).

- (FR) France Mar YTD Budget Balance: -€60.1B v -€47.5B prior.

- (PL) Poland Apr PMI Manufacturing: 53.7 v 55.3e (9th straight expansion).

- (CH) Swiss SECO Q2 Consumer Confidence: -7.1 v -11.0e.

- (GR) Greece Apr Manufacturing PMI: 54.4 v 51.8 prior (2nd month of expansion).

- (HK) Hong Kong Mar Retail Sales Value Y/Y: 20.1% v 34.0%e; Retail Sales Volume Y/Y: 19.8% v 33.3%e.

- (UK) Apr Final Manufacturing PMI: 60.9 v 60.7e (confirms 11th straight expansion and the highest reading since July 1994).

- (UK) Mar Net Consumer Credit: -£0.5B v -£0.5Be; Net Lending: £11.8B v £5.8Be.

- (UK) Mar Mortgage Approvals: 82,7K v 86.5Ke.

- (UK) Mar M4 Money Supply M/M: 0.6% v 0.8% prior; Y/Y: 10.8% v 13.7% prior; M4 Ex IOFCs: 9.8% v 9.8% prior.

Fixed income issuance

- (ID) Indonesia sold total IDR10.0T vs. IDR10.0T target in Islamic bills and bonds (sukuk).

- (ES) Spain Debt Agency (Tesoro) sold total €6.15B vs. €5.5-6.5B indicated range in 6-month and 12-month bills.

- (AT) Austria Debt Agency (AFFA) sold total €1.495B vs. €1.495B indicated in 2031 and 2047 RAGB bonds.

Looking ahead

- (RO) Romania Apr International Reserves: No est v $ 40.5B prior.

- (RU) Russia Central Bank Monetary Policy Report.

- 05:15 (CH) Switzerland to sell 3-month Bills.

- 05:20 (EU) Daily ECB Liquidity Stats.

- 05:30 (HU) Hungary Debt Agency (AKK) to sell 3-Month Bills.

- 05:30 (DE) Germany to sell €700M in inflation-linked 2026 and 2046 bonds (Bundei).

- 05:30 (BE) Belgium Debt Agency (BDA) to sell €1.6-2.0B in 3-month and 6-month bills.

- 05:30 (EU) ECB allotment in 7-Day Main Refinancing Tender (MRO).

- 05:30 (ZA) South Africa to sell combined ZAR4.8B in 2031, 2035 and 2048 bonds.

- 06:30 (EU) ESM to sell €1.5B in 3-month Bills.

- 06:45 (US) Daily Libor Fixing.

- 07:00 (MX) Mexico Apr Vehicle Domestic Sales: No est v 95.5K prior.

- 07:00 (MX) Mexico Mar Leading Indicators M/M: No est v 0.24 prior.

- 07:30 (TR) Turkey Apr Real Effective Exchange Rate (REER): No est v 65.71 prior.

- 08:00 (BR) Brazil Mar PPI Manufacturing M/M: No est v 3.8% prior; Y/Y: No est v 25.5% prior.

- 08:00 (UK) Daily Baltic Dry Bulk Index.

- 08:30 (US) Mar Trade Balance: -$74.3Be v -$71.1B prior.

- 08:30 (CA) Canada Mar Int'l Merchandise Trade (CAD): 0.5Be v 1.0B prior.

- 08:30 (CA) Canada Mar Building Permits M/M: 1.5%e v 2.1% prior.

- 08:55 (US) Weekly Redbook LFL Sales data.

- 09:00 (EU) Weekly ECB Forex Reserves.

- 09:00 (RU) Russia announcement on upcoming OFZ bond issuance (held on Wed).

- 10:00 (US) Mar Factory Orders: +1.3%e v -0.8% prior; Factory Orders (ex-transportation): +1.8%e v -0.6% prior.

- 10:00 (US) Mar Final Durable Goods Orders: 0.5%e v 0.5% prelim; Durables (ex-transportation): 1.6%e v 1.6% prelim; Capital Goods Orders (non-defense/ex-aircraft): No est v 0.9% prelim; Capital Goods Shipments (non-defense/ex-aircraft): No est v 1.3% prelim.

- 10:00 (MX) Mexico Weekly International Reserve data.

- 11:00 (DK) Denmark Apr Foreign Reserves (DKK): No est v 446.5B prior.

- 16:30 (US) Weekly API Oil Inventories.

- 17:00 (NZ) RBNZ Financial Stability Report.

- 18:30 (AU) Australia Apr Performance of Construction Index: No est v 61.8 prior.

- 18:45 (NZ) New Zealand Q1 Unemployment Rate: No est v 4.9% prior.

- 18:45 (NZ) New Zealand Q1 Employment Change Q/Q: 0.3%e v 0.6%prior; Y/Y: -0.1%e v 0.7% prior.

- 19:00 (AU) Australia Apr Final PMI Services: No est v 58.6 prelim; PMI Composite: No est v 58.8 prelim.

- 20:30 (SG) Singapore PMI (whole economy): No est v 53.5 prior.

- 20:30 (HK) Hong Kong PMI (whole economy): No est v 50.5 prior.

- 20:30 (TH) Thailand Apr PMI Manufacturing: No est v 48.8 prior.

- 21:00 (NZ) New Zealand Apr Commodity Price Index: No est v 6.1% prior.

- 21:00 (PH) Philippines Apr CPI Y/Y: 4.7%e v 4.5% prior.

- 21:30 (AU) Australia Mar Building Approvals M/M: 3.0%e v 21.6% prior; Private Sector Houses M/M: No est v 15.1% prior.

- 23:30 (TH) Thailand Apr CPI M/M: 0.8%e v 0.2% prior; Y/Y: 2.6%e v -0.1% prior; CPI Core Y/Y: 0.2%e v 0.1% prior.

- (ES) Madrid Local Elections..

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TradeTheNews.com Staff

TradeTheNews.com Staff

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Trade The News is the active trader’s most trusted source for live, real-time breaking financial news and analysis.

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