Key overnight events:
- FOMC March meeting minutes showed that policy makers debated an April interest-rate hike, with several officials leaning against such a move because it would send the wrong signal and others saying it might be warranted. Furthermore, many expressed a view that the global economic and financial situation still posed appreciable downside risks to the domestic economic outlook.
- US stocks rose most in a month, while the dollar fell, after the release of the FOMC minutes which affirmed the Fed is in no hurry to raise rates. The S&P 500 Index rallied 1.1%, led by energy stocks and pharmaceuticals, while the Bloomberg dollar index slipped 0.3% as the greenback reached its weakest level since Oct 2014 against the yen.
- WTI front-month futures surged 5.2% after US crude inventories posted a surprise drop from an 86-year high, falling by 4.9 million barrels last week.
- The Fed’s St. Louis President Bullard said overnight that a growth slowdown in the first quarter hasn’t fundamentally changed US outlook, as inflation has picked up. In a separate speech, his colleague, Cleveland President Loretta Mester, reiterated her call to tighten this year. Both are known hawks and are voters this year.
- Global bond yields have fallen to a record, with the Bank of America Corp. Global Broad Market Index plunging to 1.3%, the lowest in almost 20 years of data. A third of the world’s developed market sovereign debt has negative yields, based on Bloomberg bond indices.
- Spot 1.3511
- USDSGD resumed declines, falling by as much as 0.8% to 1.3453 following overnight US dollar weakness.
- The 9-month low of 1.3415 reached earlier this month remains the support level to the downside.
- Singapore’s March foreign reserves are scheduled to be released later today.
- Finance Minister Heng Swee Keat said in parliament yesterday the economy is still creating jobs as the ratio of job vacancies to job seekers remains more than 1.
- Spot 0.7597
- AUDUSD soared as much as 1.2% to 0.7628 this morning, as Aussie dollar bulls reclaimed the 0.7600 handle.
- Upbeat risk sentiment on the back of oil rebound continues to underpin demand for the higher-yielding Aussie dollar, as AUDUSD looks set to resume its medium-term uptrend.
- Spot 1.3076
- Driven by oil’s overnight surge, USDCAD slid by as low as 0.9% to 1.3063.
- Below the psychological 1.3000 level, the next significant support lies at 1.2832.
- Spot 6.4851
- The PBOC raised its reference rate for the first time this week. Onshore yuan strengthened, while offshore yuan fell against the US dollar.
- Overnight USD weakness had driven USDCNH past below the previous day’s low, before today’s fixing resulted it in the currency pair paring back declines.
- China’s foreign reserves due out later today are expected to have dropped to 3.1965 trillion yuan in March from 3.202 trillion yuan the previous month. This would have been the smallest loss since October, when it last increased.
- Spot 8.3239
- USDNOK fell 0.9% to an overnight low of 8.2781, driven by gains in oil prices and a weaker US dollar.
- 8.2511, a 5-month low, looks likely to be tested should oil prices continue to be supportive.