FOREX: Asia FX Wrap - Risk Sees Some Reversion, The USD Holds Steady
The BBDXY has had a range of 1224.40 - 1226.87 in the Asia-Pac session, it is currently trading around 1225. China Prime Rates Lowered As Expected: The 1 and 5 year Loan Prime Rates were reduced in line with expectations. The move lower by 10bps for each sees the 1-year LPR to 3.00% and the 5-year LPR to 3.50%, the lowest they have been since inception. CATL’s huge listing on the Hong Kong exchange produced an early jump for the shares, which is lifting the Hang Seng Index as the trading debut will also encourage more IPOs to list in the city on attractive valuations.(BBG)
- EUR/USD - Asian range 1.1218 - 1.1251, Asia is currently trading 1.1245.The market is still expected to use dips as a buying opportunity with dips back towards 1.09/1.10 well supported.
- GBP/USD - Asian range 1.3345 - 1.3376, Asia is currently dealing around 1.3370. Decent demand for GBP sub 1.3200 has seen it bounce back and it looks likely to test the upper bounds of its range above 1.3400. Like the EUR the market prefers to buy on dips.
- USD/CNH - Asian range 7.2128 - 7.2263, the USD/CNY fix printed 7.1931. Asia is currently dealing around 7.2230. Sellers should be found on a bounce back towards 7.24/25 again.
- Cross asset : SPX -0.3%, Gold $3215, US 10-Year 4.45%, BBDXY 1225, Crude oil $62.72
Data/Events : Ger PPI, EZ Current A/C, EZ Construction Output, EZ Consumer Confidence, Philly Fed nonmanufacturing survey
Fig 1: GBP/USD Spot Daily Chart
Source: MNI - Market News/Bloomberg
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LOOK AHEAD: Eurozone Timeline of Key Events (Times BST)
| Date | Time | Country | Event |
| 25-Apr | 0745 | FR | Manufacturing Sentiment |
| 29-Apr | 0700 | DE | GFK Consumer Climate |
| 29-Apr | 0800 | ES | HICP (p) / GDP |
| 29-Apr | 0900 | EU | M3 / Consumer Expectations Survey |
| 29-Apr | 0900 | IT | ISTAT Confidence Indices |
| 29-Apr | 1000 | EU | Consumer Confidence, Industrial Sentiment |
| 30-Apr | 0630 | FR | GDP (p) / Consumer Spending |
| 30-Apr | 0700 | DE | Import/Export Prices / Retail Sales |
| 30-Apr | 0745 | FR | HICP (p) / PPI |
| 30-Apr | 0855 | DE | Unemployment |
| 30-Apr | 0900 | DE | GDP (p) / State level CPI |
| 30-Apr | 0900 | IT | GDP (p) |
| 30-Apr | 1000 | EU | GDP preliminary flash est. |
| 30-Apr | 1000 | IT | HICP (p) |
| 30-Apr | 1100 | IT | PPI |
| 30-Apr | 1300 | DE | HICP (p) |
JGBS: Twist-Steepener Holds Going Into W/E, BoJ Gov Ueda Reiterates Caution
JGB futures are stronger, +18 compared to settlement levels, sitting near the middle of the range after a choppy session.
- “Governor Kazuo Ueda reiterates his stance that the central bank will carefully monitor if its economic outlook will be realized, accounting for the effects of US tariff measures, without preconception. The BoJ will raise the benchmark rate if the outlook is realized, Ueda says in response to questions in parliament.” (per BBG)
- “Fukoku Mutual Life Insurance Co. plans to invest in Japan's super-long government bonds this fiscal year after their yields skyrocketed. The company aims to increase domestic government bond holdings by ¥30 billion, with gross purchases potentially reaching ¥300-400 billion.” (per BBG)
- Earlier today, Headline CPI for March showed +3.6% y/y versus +3.7% estimate. Core and Core-Core printed +3.2% y/y and +2.9% y/y, respectively, versus estimates of +3.2% and +2.9% and priors +3.0% and +2.6%.
- Cash US tsys are closed today for the Good Friday holiday.
- Cash JGBs have twist-steepened, pivoting at the 20-year, with yields 2bps lower to 5bps higher.
- Swap rates are 2bps lower to 2bps higher, with a steepening bias.
- On Monday, the local calendar will see Tokyo Condominiums for Sale data.
