The US$ is generally steady, while stocks are firm and WTI slightly lower, as traders wait on further news from US-China trade negotiations and then on the US jobs figures due later today. Donald Trump and Chinese Vice Premier Liu He are meeting right now and we should see some headlines fairly soon. Earlier in the day, risk sentiment remained generally positive after the release of the weekly Jobless Claims, which dropped by -10k to 202k in the week ending March 30, below expectation of 215k, to reach the lowest level since December 1969.
The main mover in the FX markets was Cable, which is lower on the back of a news report that Brexit talks are not going well between the Conservatives and Labour negotiators. Elsewhere the majors are steady, with the Euro slightly heavy due to soft Germany factory orders, which contracted sharply by -4.2% mm in March. At the same time, Germany’s leading economic institutes lowered growth forecasts sharply, down from 1.9% to 0.8% in 2019. The ECB minutes from the March meeting confirmed a bias towards shifting the forward guidance, to indicate that policy rates are likely to remain lower for longer. US$Jpy remains underpinned by the ongoing positive risk sentiment.
Friday will start quietly enough in terms of data, but will see a reaction on any headlines coming from the Trump/Lui He meeting. Otherwise, China is out for a public holiday, and Asia will have just the Australian AIG Performance of Construction Index (Mar), the Japan Coincident Index and Leading Economic Index (Feb) to provide direction. Europe will look to the German Industrial Production (Feb) for guidance – and there is a Eurogroup meeting on as well, where Brexit will again be near the top of the agenda. The main action will be during the US session, when the employment data will be released, where the NFP number is expected to be +175K, AHE; 0.3%, AWH; 34.5, Headline rate; 3.8%. Until then it should be very quiet unless we get a major breakthrough on the US/China trade talks or on any major Brexit headline. It looks as though the UK may well be in for a 12 April drop-out date with a “no-deal” outcome, in which case Sterling will collapse. We shall see. Have a good weekend.
Economic data highlights will include:
Fri: China Ching Ming Festival, Australian AIG Performance of Construction Index, Japan Leading Indicator, Coincident Index, German Industrial Production, Eurogroup Meeting, US Jobs/NFP/Average Hourly Earnings, Consumer Credit Change
Market moves, in brief:
FX: DXY 97.28 (+0.2%)
Bonds: US10Y; 2.512% (-0.62%), German 10Y; -0.006%(-198%), UK 10Y; 1.086% (-0.07%), Australian 10Y; 1.904% (+2.94%), NZ 10Y; 2.005% (4.70 %), China 10Y; 3.238% (-0.37%)
Stock Indices: DJI; +0.64%, S+P; +0.21%, NASDAQ; -0.06%, EUStoxx50; +0.19%, FTSE100; -0.22%, Shanghai Composite; +0.94%,
Metals: Gold $1293 oz (+0.25%), Silver $15.15 oz (+0.10%), Copper $2.915 lb (-0.93%), Iron Ore $92.53 per tonne (+0.41%),
Oil: WTI $62.10 pb (-0.59%)
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