Key overnight events:

  • The S&P 500 Index retreated 0.2%, paring an earlier drop of 0.7% as energy shares capped their biggest drop since Apr 15th. There was a general cautious tone across markets, given that this week, central bank meetings in the US and Japan take place and about one-third of the S&P 500-listed companies report quarterly earnings.
  • US home sales fell 1.5% to 511,000, worse than the 1.6%-increase to 520,000 expected.
  • Crude oil futures expiring in June slumped 2.5% to $42.64/bbl after Kuwait said it plans to boost output to more than 3 million bpd within months, doubling output from where it stood during last week’s oil strike. Iran’s oil production has now increased by 1 million bpd since the beginning of the year.
  • The yen strengthened 0.7% to 111.08 against the USD as traders dialled back bets on the degree of additional stimulus expected from the BOJ this week. Goldman Sachs, in a note to clients, wrote that more focus will be on asset purchases rather than rate policy when the BOJ meet this week, and targets USDJPY to reach 130 within a year.
  • The pound climbed to a 10-week high after Obama urged UK citizens to vote against “Brexit” in a June referendum. Bloomberg’s Brexit Tracker calculates the probability of an EU exit at about 20%.
  • South Korea’s economy expanded 2.7% year-on-year in the first quarter, as expected; prior quarter’s growth was 3.1%.



  • Spot 1.3539
  • CPI for March fell by 1.0% year-on-year, as expected. Core CPI matched estimates as well, rising 0.6% over the same period.
  • USDSGD remains little changed from the previous day’s close, and continues to be supported at the 1.3500 handle.
  • Industrial production for March is due for release later today and is expected to have slowed to a 2.0%-drop year-on-year, from a 4.7%-drop the previous month.



  • Spot 0.7710
  • AUDUSD is almost unchanged from last week’s close, as Australian markets reopen today after a 3-day-long weekend.
  • 0.7850 remains the short-term resistance above, while the currency pair should find good support at the 0.7500 level.



  • Spot 1.2674
  • USDCAD has been relatively stable over the past week, registering closes within the range of 1.2651 – 1.2684 each day since last Wednesday. The down trend since the high made in mid-January has proven to be a strong one, breaking below the key resistance level of 1.2832 in the process.
  • To the downside, the next resistance lies at 1.2593.



  • Spot 6.5074
  • USDCNH closed above its 50-day moving average of 6.5045 yesterday, for the first time since Feb 4th, and seems to have found new support at the 6.5000 level. The next resistance above lies at 6.5297.
  • China’s regulators are discussing a possible reduction in the amount of provisions that the country’s banks must set aside for their bad loans, the Chairman of China Construction Banks Corp. said yesterday, adding that the coverage ratio could reduce to 120 – 130%, from a current minimum of 150%.



  • Spot 8.2101
  • USDNOK bulls have reclaimed the 8.2000 level, following last Friday’s 1.5%-gain. 8.2600 looks poised to provide short-term resistance, while support to the downside should come in around last October’s low of 8.0389.
  • Norway has turned to its massive sovereign wealth fund in order to cover 2016 budget deficits. As Bloomberg reported, the country withdrew 7.5 billion krone, or US$898 million, in March from the fund, putting the year-to-date total withdrawal at about 20.8 billion krone, or US$3.1 billion. At this rate, full-year withdrawals would top an estimate of 80 billion krone given in February by Norges Bank Governor Olsen.


© Jachin Capital Pte Ltd

UEN: 201419754M

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