RANsquawk EU Open Rundown 30.03.17
30 Mar 2017, 06:54
- Asian equities traded mostly lower despite a largely positive lead from the US in which the energy sector outperformed
- The greenback held near yesterday’s highs as the USD-index reclaimed 100.00, while USD/JPY extended its footing above 111.00
- Looking ahead, highlights include German regional and national CPI, US GDP, ECB's Mersch and Liikanen and Fed's Mester, Kaplan, Dudley and Williams
- ASIAThe majority of Asian equities traded in the red after the region sspanugged off the mostly positive lead from Wall St. where the energy sector outperformed following a smaller than expected build in DoEs. Nikkei 225 (-0.5%) failed to benefit from a weaker JPY amid fiscal year-end rebalancing, while ASX 200 (+0.4%) bucked the trend and was led by the strength in the commodities complex. Hang Seng (-0.5%) and Shanghai Comp. (-1.1%) were dampened despite a positive earnings report from Big 4 bank China Construction Bank, as the PBoC refrained again from conducting open market operations for the 5th consecutive day while there were also reports the Trump administration are to make preparations to keep large tariffs on Chinese goods. 10yr JGBs were lower despite the cautious risk tone with demand dampened after the latest weekly securities transactions data showed foreign investors increased their selling of Japanese bonds by more than 3-fold, while today’s 2 year auction also failed to provide any meaningful support with the b/c and lowest accepted price below prior.PBoC refrained from open markets operations again, which resulted to a net daily drain of CNY 40bln. (Newswires)PBoC set CNY mid-point at 6.8889 (Prev. 6.8915) EUROPE/UKLatest Elabe French Presidential Election Elabe poll showed second round with Macron at 63% vs. Le Pen at 37%. (Newswires)Latest IFOP French Presidential Election poll showed second round with Macron at 60% vs. Le Pen at 40%. (Newswires)Barclays prelim month-end extensions: Pan Euro Agg 0.07 (Prev. 0.07) FX The greenback held near yesterday’s highs as the USD-index reclaimed 100.00, while USD/JPY extended its footing above 111.00. Elsewhere, commodity linked currencies slightly pared some of their post-DoE gains, while EUR/USD continued to languish from source comments that ECB policymakers are wary about making a fresh policy shift in April and are concerned about a potential yield surge, while sources also added that the March message was over-interpreted. COMMODITIES Oil prices held onto yesterday’s DoE-inspired gains where WTI crude futures advance over USD 1 to above the USD 49/bbl level. Elsewhere, gold (+0.1%) prices slipped overnight, as the firm greenback kept the precious metal subdued, while copper trade was lacklustre amid a subdued risk tone during Asia trade.OPEC Sec Gen Barkindo said the OPEC deal is gradually restoring balance in the oil market. (Newswires) The Iranian delegation in Russia did not discuss extending the OPEC/Non-OPEC agreement to cut output, according to Russian Energy Minister Novak. (Newswires) US US Treasuries closed the session higher despite comments from most Fed officials being relatively hawkish. Fed’s Williams said that he sees two to tspanee more rate hikes in 2017 with Rosengren saying he’d rather the Fed hiked at every other meeting. Evans was more cautious, saying he thinks two hikes this year is a safe bet. The 7-year auction was strong with the yield stopping tspanough the WI and B/C above the five-auction average. Finally, Jun’17 10y T-note futures settled at 124.18+, up 7 ticks. Fed's Williams (Non-Voter, Hawk) said they could begin trimming portfolio after this year’s rate hikes and sees 2 to 3 further rate hikes this year with upside risks more prominent. (Newswires) Fed's Rosengren (Non-Voter, Hawk) stated that 4 rate hikes this year would be appropriate. (Newswires)House Republicans are said to be weighing another vote on repealing and replacing Obamacare next week. (Newswires)US President Trump is to unveil a USD 1trl infrastructure plan this year, according to US Transportation Secretary Elaine Chao. In separate news, US President Trump’s administration is said to seek only modest changes to NAFTA. (Newswires)US Federal Judge in Hawaii indefinitely extended court order to block US President Trump's revised travel ban, while there were also reports that the city of Seattle filed a lawsuit against US President Trump regarding the sanctuary cities order. (Newswires)Barclays prelim month-end extensions: Treasury 0.07 (Prev. 0.11)