EU mid-market update: Explosive Japanese yen smells like intervention; Fed decision and quarterly refunding statement on Wednesday.
Notes/observations
- Extreme volatility seen in yen as USD/JPY sharply rose to 160 in Asian hours before dropping below 155. Although no official confirmation from Japan officials, traders and analysts heavily suspecting intervention. Worth noting Japan markets were closed for holiday.
- Spanish Apr Core CPI came in substantially cooler than expected at YoY 2.9% v 3.2% consensus. German state Apr CPI readings were mixed against consensus but above prior reading in Mar, ahead of national CPI reading at 08:00 ET.
- Scheduled US earnings in premarket are light with Amazon, Apple and Samsung set to report in coming days; Main US focus is on US treasury quarterly borrowing estimates, expected around 15:00 ET.
- Asia closed higher with KOSPI outperforming at +1.2%. EU indices are -0.3% to +0.6%. US futures are +0.1-0.3%. Gold 0.0%, DXY -0.2%; Commodity: Brent -0.5%, WTI -0.4%; Crypto: BTC -2.2%, ETH -4.2%.
Asia
-Traders cite yen-buying intervention by Japan after USDJPY pair tested 160.17 level (highest since Apr 1990) - press.
- Japan Top FX diplomat Kanda: Will continue to take appropriate action against excessive FX moves; Declines again about intervention; Not targeting specific levels; Will disclose if there was FX intervention in end-May in the monthly report; Recent FX moves seem excessive; Can respond 24 hours, 365 days in FX market if we need to; Cannot give details about specific options.
- China MOFCOM responds to Japan's semiconductor curbs: Export control measures proposed by Japan will seriously affect the normal trade between Chinese and Japanese enterprises and undermine the stability of global supply chains - Chinese press.
- China firms go ‘underground’ on Russia payments amid bank pull back - financial press.
- China PBOC reportedly expands warning on bond investment to regional banks - press.
- China Foreign Ministry Daily Briefing: Pres Xi to visit France, Serbia and Hungary to push for global peace and development.
- China to extend tariff exemptions for imports of some US products until Nov 30th, 2024; Items include rare earth metal ore and radar equipment for navigation.
- Hong Kong may launch China government bond futures in Q3 [around Jul] – HK Press.
- Japan ruling LDP Party lost 3 Diet seats in by elections – Press.
Global conflict/tensions
- Reportedly internal memo from some US senior State Dept officials told Sec Blinken that they do not find Israel's assurances credible or reliable that it is using US-supplied weapons in accordance with international humanitarian law - press.
-US White House National Sec Advisor Kirby: Israel has assured the US that they will not enter Rafah until the two countries have had a chance to share perspectives and concerns.
-Israel Foreign Min: Israel will suspend planned operation in Rafah if Hamas agrees to a hostage deal.
- Hamas delegation later today, Apr 29th to arrive in Egypt for new Gaza truce talks - press.
-Reportedly US intelligence finds that Putin did not directly order Navalny's death in February - WSJ.
Europe
-Scotland First Min Humza Yousaf reportedly is preparing to resign as SNP leader and First Minister as early as Monday - UK press.
-Spain PM Sanchez said to formally announce his expected resignation at noon later today - press; Spain PM Sanchez announces he will continue as PM (not expected).
- Greece PM Mitsotakis: To give special productivity bonus in public sector.
- Turkey Fin Min Simsek: ISDB sees $6.3B of financing for Turkey in 2024-2026.
Americas
-US House and Senate reportedly reach deal on FAA bill that will Not hike pilot retirement age to 67 - press.
-WSJ's Timiraos: If growth remains solid and inflation stubborn, it may lead to speculation neutral has risen, and thus current interest rates aren't that tight.
Energy
-Norway Finance Ministry to propose increasing number of oil tax terms from 6 to 10 per year.
Speakers/fixed income/FX/commodities/erratum
Equities
Indices [Stoxx600 +0.37% at 509.86, FTSE +0.49% at 8,179.85, DAX +0.09% at 18,183.45, CAC-40 +0.26% at 8,109.26, IBEX-35 -0.28% at 11,123.90, FTSE MIB +0.33% at 34,362.00, SMI +0.15% at 11,361.20, S&P 500 Futures +0.19%].
Market focal points/key themes: European indices open higher across the board; among sectors leading the way higher are industrials and financials; lagging sectors include consumer discretionary and energy; materials sector supported as investors await a new offer from BHP for Anglo American; Blackstone confirms raised offer for Hipgnosis; Mithra Pharma receives offers for selected assets; French state moves to acquire certain assets of ATOS; focus on release of German CPI later in the day; earnings expected in the upcoming US session include Franklin Resources On Semi and Welltower.
Equities
- Consumer discretionary: Ariston Holding [ARIS.IT] -1.5% (Russia temporarily takes control of Ariston unit).
- Financials: Deutsche Bank [DBK.DE] -5.5% (after Fri close: updates on Postbank takeover litigation matter; Sees legal provisions of approx €1.3B), BBVA [BBVA.ES] -2.5% (Q1 results, raises FY profit guidance), Hipgnosis Songs Fund Limited [SONG.UK] +2.5% (Blackstone's new offer).
- Healthcare: Philips [PHIA.NL] +32.0% (Q1 results, reaches €1.1B early settlement in sleep apnea case in US), Astrazeneca [AZN.UK] +1.5% (trial data).
- Telecom: Vivendi [VIV.FR] -1.5% (earnings).
- Technology: Atos [ATO.FR] +12.0% (non-binding letter of intent received from the French state).
- Materials: Anglo American [AAL.UK] +1.5% (reportedly BHP considering an improved offer).
Speakers
- Japan Top FX diplomat Kanda: No comment on FX intervention yet.
-ECB’s Wunsch (hawk, Netherlands): I do not think we are going to do more than 25bps cut in June; ECB should be cautious about July cut; What we know today would probably warrant at least 50bps in cuts this year.
- Thailand Central Bank (BoT) Gov: Short term boost from rate cut would not be efficient trade off; Current interest rate is supportive of economic recovery.
Currencies/fixed income
- Closed Japan markets being attributed to some of the volatility seen in JPY (yen), but with such substantial moves from 158 up to 160 and then down sharply to below 155, many analysts noting BOJ or MOF intervention is likely the cause. Speculation in recent weeks has been about potential bi-lateral intervention and that is putting attention on other currencies and pairs as traders await signals. No official confirmation yet on intervention. USD/JPY last seen at 155.8.
- Other majors are fairly muted in comparison but cross flows from the yen are keeping volume above average. GBP/USD at 1.252. EUR/USD at 1.071.
Economic data
-(RU) Russia Mar Real Retail Sales Y/Y: +11.1% v 8.6%e.
-(RU) Russia Mar Unemployment Rate: 2.7% v 2.8%e; Feb Real Wages Y/Y: 10.8% v 8.0%e.
-(NZ) New Zealand Mar Filled Jobs M/M: 0.4% v 0.3% prior.
-(VN) Vietnam Apr CPI Y/Y: 4.4% v 4.0% prior.
-(VN) Vietnam Apr Trade Balance: $0.68B v $2.9B prior.
-(VN) Vietnam Apr Industrial Production Y/Y: 6.3% v 4.1% prior.
-(VN) Vietnam Apr Retail Sales Y/Y: 9.0% v 9.2% prior.
-(TH) Thailand Mar Customs Trade Balance -$1.2B v $1.0Be.
-(NL) Netherlands Apr Producer Confidence Index: -3.6 v -4.8 prior.
-(FI) Finland Apr Consumer Confidence: -12.6 v -9.4 prior; Business Confidence: -17 v -13 prior.
-(SE) Sweden Q1 GDP Indicator Q/Q: -0.1% v 0.2%e; Y/Y: -1.1% v -0.7%e; Mar GDP Indicator M/M: -0.3% v -0.3% prior; Y/Y: -1.1% v -0.8% prior.
-(SE) Sweden Mar Retail Sales M/M: -0.4% v 0.5% prior; Y/Y: 1.1% v 0.1% prior.
-(SE) Sweden Feb Non-Manual Workers Wages Y/Y: 5.1% v 4.9% prior.
-(FI) Finland Feb Final Trade Balance: -€0.7B v -€0.7B prelim.
-(ES) Spain Apr Preliminary CPI M/M: 0.7% v 1.0%e; Y/Y: 3.3% v 3.3%e; Core CPI lowest since Jan 2022.
-(TR) Turkey Apr Economic Confidence: 99.0 v 100.0 prior.
-(DE) Germany Apr CPI Bavaria M/M: 0.6% v 0.4% prior; Y/Y: 2.5% v 2.3% prior.
-(DE) Germany Apr CPI Hesse M/M: 0.6% v 0.3% prior; Y/Y: 1.9% v 1.6% prior.
-(DE) Germany Apr CPI Brandenburg M/M: 0.6% v 0.4% prior; Y/Y: 3.0% v 2.8% prior.
-(DE) Germany Apr CPI Saxony M/M: 0.6% v 0.4% prior; Y/Y: 2.7% v 2.5% prior.
-(DE) Germany Apr CPI Baden Wuerttemberg M/M: 0.3% v 0.5% prior; Y/Y: 2.1% v 2.3% prior.
-(DE) Germany Apr CPI North Rhine Westphalia M/M: 0.4% v 0.3% prior; Y/Y: 2.3% v 2.3% prior.
-(CH) Swiss weekly Total Sight Deposits (CHF): 475.7B v 481.3B prior; Domestic Sight Deposits: 467.3B v 472.9B prior.
-(PT) Portugal Apr Consumer Confidence: -20.4 v -22.6 prior; Economic Climate Indicator: 1.8 v 1.9 prior.
-(BE) Belgium Q1 Preliminary GDP Q/Q: 0.3% v 0.3% prior; Y/Y: 1.3% v 1.3% prior.
-(EU) Euro Zone Apr Economic Confidence: 95.6 V 96.7E; Industrial Confidence: -10.5 v -8.5e; Services Confidence: 6.0 v 6.5e; Consumer Confidence (final): -14.7 v -14.7 advance
Fixed income issuance
- (PH) Philippines sells total PHP15.0B vs. PHP15.0B indicated in 3-month, 6-month and 12-month bills.
- (DK) Denmark sells total DKK0M in 1-month and 3-month Bills; Rejects all bids.
- (IT) Italy debt agency (TESORO) sells totla €6.75B VS. €5.75-6.75B indicated range in 5-year and 10-year BTP bonds.
- (IT) Italy debt agency (TESORO) sells €3.5B VS €3.0-3.5B indicated in new Apr 2032 floating rate bonds (btpei); real yield: 4.90%; bid-to-cover: 1.39X.
Looking ahead
- 05:30 (BE) Belgium Apr CPI M/M: No est v 0.6% prior; Y/Y: No est v 3.2% prior.
- 05:30 (IT) Italy Debt Agency (Tesoro) to sell €3.0-3.5B in new Apr 2032 floating rate bonds (BTPei).
- 05:30 (DE) Germany to sell combined €4.0B in 3-month and 9-month BuBills.
- 05:30 (EU) European Union to sell €5.0B in NGUE bonds.
- 05:30 (ZA) South Africa announces details of upcoming I/L bond sale (held on Fridays).
- 06:00 (RO) Romania to sell combined RON1.0B in 2026 and 2029 bonds.
- 06:00 (IE) Ireland Q1 Preliminary GDP Q/Q: No est v -3.4% prior; Y/Y: No est v -8.7% prior.
- 06:00 (IE) Ireland Mar Retail Sales Volume M/M: No est v -2.0% prior; Y/Y: No est v 1.1% prior.
- 06:00 (IE) Ireland Apr Preliminary CPI EU Harmonized Y/Y: No est v 1.7% prior.
- 07:00 (BR) Brazil Apr FGV Inflation IGPM M/M: No est v -0.5% prior; Y/Y: No est v -4.3% prior.
- 07:15 (EU) ECB's Lane (Ireland).
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey.
- 08:00 (IN) India announces details of upcoming bond sale (held on Fridays).
- 08:00 (DE) Germany Apr Preliminary CPI M/M: No est v 0.4% prior; Y/Y: No est v 2.2% prior.
- 08:00 (DE) Germany Apr Preliminary CPI EU Harmonized M/M: No est v 0.6% prior; Y/Y: No est v 2.3% prior.
- 09:00 (FR) France Debt Agency (AFT) to sell €5.6-7.2B in 3-month, 6-month and 12-month bills.
- 09:50 (SE) Sweden Central Bank (Riksbank) Dep Gov Floden.
- 10:30 (US) Apr Dallas Fed Manufacturing Activity: No est v -14.4 prior.
-11:30 (US) Treasury to sell 13-Week and 26-Week Bills.
- 15:00 (US) Treasury Quarterly Borrowing Estimates.
- 15:20 (EU) ECB's De Guindos (Spain).
- 16:00 (US) Weekly Crop Progress Report.
- 19:00 (KR) South Korea Mar Industrial Production M/M: No est v 3.1% prior; Y/Y: No est v 4.8% prior; Cyclical Leading Index Change: No est v 0.1 prior.
- 19:01 (UK) Apr Lloyds Business Barometer: No est v 42 prior.
- 19:01 (UK) Apr BRC Shop Price Index Y/Y: No est v 1.3% prior.
- 19:30 (JP) Japan Mar Jobless Rate: No est v 2.6% prior; Job-to-Applicant Ratio: No est v 1.26 prior.
- 19:30 (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: No est v 80.3 prior.
- 19:50 (JP) Japan Mar Retail Sales M/M: 1.5%e v 1.7% prior; Y/Y: 4.6%e v 4.7% prior; Dept. Store, Supermarket Sales Y/Y: No est v 7.2% prior.
- 19:50 (JP) Japan Mar Preliminary Industrial Production M/M: No est v -0.6% prior; Y/Y: No est v -3.9% prior.
- 21:00 (NZ) New Zealand Apr ANZ Business Confidence: No est v 22.9 prior; Activity Outlook: No est v 22.5 prior.
- 21:30 (AU) Australia Mar Private Sector Credit M/M: No est v 0.5% prior; Y/Y: No est v 5.0% prior.
- 21:30 (CN) China Apr Manufacturing PMI (Govt Official): No est v 50.8 prior; Non-manufacturing PMI: No est v 53.0 prior; Composite PMI: No est v 52.7 prior.
- 21:30 (AU) Australia Mar Retail Sales M/M: No est v 0.3% prior.
- 21:45 (CN) China Apr Caixin PMI Manufacturing: No est v 51.1 prior.
- 22:00 (SG) Singapore Mar M2 Money Supply Y/Y: No est v 4.0% prior; M1 Money Supply Y/Y: No est v 5.7% prior.
All information provided by Trade The News (a product of Trade The News, Inc. "referred to as TTN hereafter") is for informational purposes only. Information provided is not meant as investment advice nor is it a recommendation to Buy or Sell securities. Although information is taken from sources deemed reliable, no guarantees or assurances can be made to the accuracy of any information provided. 1. Information can be inaccurate and/or incomplete 2. Information can be mistakenly re-released or be delayed, 3. Information may be incorrect, misread, misinterpreted or misunderstood 4. Human error is a business risk you are willing to assume 5. Technology can crash or be interrupted without notice 6. Trading decisions are the responsibility of traders, not those providing additional information. Trade The News is not liable (financial and/or non-financial) for any losses that may arise from any information provided by TTN. Trading securities involves a high degree of risk, and financial losses can and do occur on a regular basis and are part of the risk of trading and investing.
Recommended Content
Editors’ Picks
EUR/USD struggles to hold above 1.0400 as mood sours
EUR/USD stays on the back foot and trades near 1.0400 following the earlier recovery attempt. The holiday mood kicked in, keeping action limited across the FX board, while a cautious risk mood helped the US Dollar hold its ground and forced the pair to stretch lower.
GBP/USD set to swoon on holiday-shortened week
GBP/USD waffled near the 1.2550 level on Monday, kicking off the holiday trading week with a third of a percent decline as market sentiment coils. Market volumes are set to drain out of global exchanges as investors broadly hang up their hats for the Christmas holiday, and global markets will be shuttered on Wednesday.
Gold flat lines above $2,600 ahead of holiday trading week
Gold price trades flat around $2,610 during the early Asian session on Tuesday. Markets face a relatively quiet trading session ahead of the holiday trading week. The US Richmond Fed Manufacturing Index for December is due later on Tuesday.
Ethereum risks a decline to $3,000 as investors realize increased profits and losses
Ethereum is up 4% on Monday despite increased selling pressure across long-term and short-term holders in the past two days. If whales fail to maintain their recent buy-the-dip attitude, ETH risks a decline below $3,000.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.