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  • Writer's picturefxmethods

ASIA RECOVER ON CHINESE DATA, YIELD ON DEMAND, OIL UP

ECONOMY

  • On Wednesday, Asian Indices firm on positive Chinese data, China's economy grew 6.4% in the first quarter from a year earlier, above expectations and steady from the previous quarter, helped by sharply higher factory production. The main mover of the morning was the New Zealand dollar which dived after a weak reading on consumer price inflation stoked expectations for a cut in interest rates.

  • Overnight , Wall Street, the Dow ended with a slight gain of 0.26%, while the S&P 500 firmed 0.05% and the Nasdaq 0.3%.

  • The CBOE Volatility Index has hit its lowest level in more than six months, while European stock volatility reached its lowest level since January 2018.

  • The 10-year Treasury note yield +0.39% climbed 4 basis points to 2.592%, its highest since March 19. The 2-year note yield +0.86% was up 2.3 basis point to 2.414%, while the 30-year bond yield +0.16% rose 2.9 basis points to 2.992%, also its highest since March 19. Bond prices move inversely to yields.

CURRENCY

  • The dollar has edged up against a basket of currencies to 97.074, it has traded between 95.00 and 97.70 for six months now.

  • Greenback manage to top resistance on the yen at 112.13 to reach its highest since December at 112.16.

  • The euro was hovering between $1.1285 - $1.1300, having slipped form $1.1314 overnight on a Reuters report that several European Central Bank policymakers think the bank’s economic projections are too optimistic.

  • New Zealand dollar which sank 0.8% to $0.6708 after annual consumer price inflation came in well below expectations at just 1.5% for the first quarter. Yields on two-year bonds dived 9 basis points to 1.48% as investors wagered the Reserve Bank of New Zealand (RBNZ) would have to cut rates in response.

COMMODITY

  • Improvement in risk sentiment saw spot gold slip to its lowest for the year so far and was last at $1,276.61 per ounce.

  • Oil prices were buoyed as fighting in Libya and falling Venezuelan and Iranian exports raised concerns over tightening global supply. U.S. crude was last up 31 cents at $64.36 a barrel, while Brent crude futures were up 14 cents at $71.86.

  • Malaysian palm oil futures hit a one-week high during trade on Tuesday, reversing losses made earlier in the day and supported by a weaker ringgit and expectations of weaker than forecast production.

  • U.S. grain and soybean futures slumped on Tuesday with strong crop ratings and increased forecasts for global harvests pushing Chicago Board of Trade wheat to a one-month low.

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