Key overnight events:
- US equities were largely unchanged last night as many European markets remained closed on Easter Monday and volumes were thin. The S&P 500 Index added 0.05% while the Dow Jones Industrial Average gained 0.11%, on lowest trading volumes this year.
- The Fed’s preferred measure of inflation, the core PCE, in February slowed to 0.1% month-on-month from 0.3% in January; the expected figure was 0.2%.
- US personal income for February rose 0.2%, down from the previous figure of 0.5% but better than the expected 0.1%. Personal spending for the same period came in as expected at 0.1%, however the prior month’s figure was revised down to 0.1% from 0.5%. The downward revision prompted most economists to scale back expectations of an April Fed hike, Bloomberg reported.
- Atlanta Fed researchers slashed Q1 GDP estimates to 0.6% from 1.4%, further lowering expectations of an April hike.
- The Bloomberg Dollar Spot Index snapped a 6-day rally, falling 0.4% as broad dollar weakness ensued. Fed chairwoman Janet Yellen is due to make a speech tonight and investors will be interested to hear what she has to say regarding the Fed’s projected interest rate path.
- Crude oil futures expiring in May fell 0.2% to settle below $40/bbl for the third day, amid speculation that a meeting of oil producers next month won’t ease a global supply glut. Rigs targeting oil in the US fell by 15 to 372 last week, according to Baker Hughes Inc.
- Spot 1.3688
- At least 5 banks expect the MAS to maintain its policy stance at its next meeting in April after the government unveiled an expansionary budget for the new fiscal year; Goldman Sachs, ANZ, Credit Suisse, Maybank and Nomura all predict an unchanged policy stance by MAS next month.
- USDSGD has begun to pare its week-long climb, falling back below 1.3700 to a low this morning of 1.3673.
- Spot 0.7560
- Overnight USD weakness has resulted in AUDUSD rebounding from the 0.7500 handle, as the currency pair rose as much as 0.5% today to 0.7566.
- The 8-month high of 0.7680 remains the next resistance level.
- Spot 1.3195
- Despite continued weakness in crude oil prices, USDCAD extended declines, falling by as much as 0.6% to 1.3168.
- Spot 6.5153
- The PBOC boosted its fixing for the first time in 4 days, as USDCNH dropped to a low of 6.5087 earlier today.
- The 6.5300 handle is proving to be a hard resistance to break, with the currency pair only managing a high of 6.5297 last Friday. The 100-day moving average of 6.5323 provides added resistance at said handle.
- Spot 8.4361
- USDNOK broke back below its 200-day moving average of 8.4490, falling as much as 0.6% to 8.4142.
- A break below 8.3000 would provide confirmation of a reversal in USDNOK’s uptrend which has been in play since Sep 2014.