Sverre Holbek, CFA
Danske Bank A/S
Market movers today
-
The preliminary Spanish CPI data will provide the first clues to march inflation in Euroland.
-
The US Treasury continues with the sale of T-bills (USD89bn) and 5Y bonds (USD35bn) after yesterday's 2Y auction, which drew the highest yield since 2008.
-
A string of tier-2 data from Sweden and Euroland. These are not expected to have much of a market impact.
-
We published our Q2 macroeconomic outlook for the Nordic economies this morning.
Selected market news
The Asian equity markets followed the positive trend from the US markets as tensions over the possible trade was between US and China have eased. There have been talks between US Treasury Secretary Steven Mnuchin and his Chinese counterparts on how to reduce the trade gap between China and the US as well as China avoiding the tariffs on exports to the US.
Furthermore, the North Korean leaders made a surprise visit to China, which was also seen as a positive factor for the markets with the South Korean won strengthening this morning. Hence, the Nikkei jumped more than 2% this morning. The JPY weakened modestly against the dollar.
Yesterday's auction of 2Y US Treasury bond drew the highest yield since 2008 on the 2Y bonds. The bid-to-cover was in line with previous auctions but market makers had to take a larger share of the auction. Focus is now on the 5Y auction tonight.
Russia's rouble saw significant pressure yesterday as the USD/RUB spiked 1.2% within a few hours as more than half of the EU countries, the US and Ukraine announced they are expelling more than 100 Russia's diplomats in support of the UK's allegations against Russia in the nerve-agent poisoning case on the British soil. Australia and Canada have also joined the action of expelling several Russian diplomats. US President Donald Trump has also ordered for Russia's consulate in Seattle to be closed. As we have been pointing out, the major mover for the RUB in the near term remains geopolitics. In the current setup, we recommend being RUB sellers before Russia's response appears as we could easily see a tit-for-tat escalation. Yet, looking at Russian macro fundamentals, we remain RUB bullish in the long term.
This publication has been prepared by Danske Bank for information purposes only. It is not an offer or solicitation of any offer to purchase or sell any financial instrument. Whilst reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance on it. Danske Bank, its affiliates or staff, may perform services for, solicit business from, hold long or short positions in, or otherwise be interested in the investments (including derivatives), of any issuer mentioned herein. Danske Bank's research analysts are not permitted to invest in securities under coverage in their research sector.
This publication is not intended for private customers in the UK or any person in the US. Danske Bank A/S is regulated by the FSA for the conduct of designated investment business in the UK and is a member of the London Stock Exchange.
Copyright () Danske Bank A/S. All rights reserved. This publication is protected by copyright and may not be reproduced in whole or in part without permission.
Recommended Content
Editors’ Picks
How will US Dollar react to April jobs report? – LIVE
Following the Fed's policy announcements, market focus shifts to the April jobs report from the US. Nonfarm Payrolls are forecast to rise 238K. Investors will also pay close attention to revisions and wage inflation figures.
EUR/USD clings to gains near 1.0750 ahead of US jobs report
EUR/USD clings to modest gains at around 1.0750 after closing the previous two days in positive territory. Investors eagerly await April jobs report from the US, which will include Nonfarm Payrolls and Unemployment Rate readings.
GBP/USD advances to 1.2550, all eyes on US NFP data
The GBP/USD pair trades on a stronger note around 1.2550 amid the softer US Dollar on Friday. Market participants refrain from taking large positions as focus shifts to April Nonfarm Payrolls and ISM Services PMI data from the US.
Gold remains stuck near $2,300 ahead of US NFP
Gold price struggles to gain any meaningful traction and trades in a tight channel near $2,300. The Fed’s less hawkish outlook drags the USD to a multi-week low and lends support to XAU/USD ahead of the key US NFP data.
XRP edges up after week-long decline as Ripple files letter in reply to SEC’s motion
Ripple filed a letter to the court to support its April 22 motion to strike new expert materials. The legal clash concerns whether SEC accountant Andrea Fox's testimony should be treated as a summary or expert witness.