Key overnight events:

  • Atlanta Fed chief Dennis Lockhart and San Francisco’s John Williams both signalled on Tuesday that the US economy could warrant a June rate hike; investors currently only see a 12% chance of such a move, according to pricing in interest rate futures contracts on Bloomberg.
  • The S&P 500 Index dropped 0.9%, erasing Monday’s 0.8% advance; financial and energy shares paced declines. The Bloomberg Spot Dollar Index rose the most this year, closing 0.7% higher and extending gains this morning by another 0.3%, following comments from Lockhart and Williams.
  • Crude oil futures expiring in June fell 2.5% and closed below its 200-day moving average. US government data is forecasted to show rising stockpiles kept crude supplies at the highest level in more than 80 years; analysts are expecting a surplus of 750,000 barrels.
  • The RBA cut interest rates to a record low of 1.75%, from 2.00%, following last week’s disappointing inflation data. The market was pricing in a 50% probability of a cut.
  • Japan Finance Minister Taro Aso said the government is concerned about intensified yen moves and will respond if needed. The BOJ’s Kuroda reiterated that monetary policy is focused on price stability, rather than exchange rate.
  • The EU cut its 2016 euro-are inflation forecast to 0.2% from 0.5% and lowered GDP view as well, to 1.6% this year and 1.8% in 2017 – both 0.1% lower than initially forecasted in February.



  • Spot 1.3532
  • April PMI rose to 49.8 from 49.4, beating forecasts of 49.5 and registering its highest reading since Jun 2015.
  • USDSGD rebounded from the 1.3400 level, climbing 0.8% higher and within close proximity to its 2-week resistance of 1.3562.



  • Spot 0.7492
  • AUDUSD reversed a 1.2% gain and ended with a 0.9% decline, following the RBA’s rate cut. The currency pair extended declines today, falling by as much as another 1.3% to a low of 0.7467, the lowest since 17th Mar, and taking out the 50-day moving average in the process.
  • The AUDUSD uptrend since mid-January seems to have broken down with yesterday’s move; the next support level to be tested lies at 0.7385.
  • Interbank cash rates futures for August were yielding 1.61% earlier today, indicating about a 50% chance that the RBA will cut rates again that month.



  • Spot 1.2726
  • 1.2500 proved too strong for USDCAD bears as the currency pair rebounded off lows of 1.2461, and climbed as much as 1.4% higher to 1.2749.
  • 1.2835 remains the next level of resistance above.
  • Bank of Canada Governor Poloz commented that the power of monetary policy tends to lose some power as interest rates head towards zero or turn negative.



  • Spot 6.5074
  • The PBOC lowered its reference rate by 0.6%, the most in 9 months, to 6.4943 after the US dollar strengthened broadly overnight.
  • USDCNH added 0.3% to 6.5096, rising to the highest in a week.
  • Chinese authorities have issued verbal warnings to commentators whose public remarks on the economy are out of step with the government’s upbeat statements, WSJ reports.



  • Spot 8.1307
  • Following US dollar strength and oil’s decline overnight, USDNOK reversed losses, rebounding off the 8.0000 level and climbing by as much as 1.3% to 8.1374.


© Jachin Capital Pte Ltd

UEN: 201419754M

The contents of this document are for information only and is taken or compiled from sources that we, Jachin Capital Pte Ltd, believe to be reliable. To the maximum extent permitted by law, we do not make any representation or warranty (express or implied) that this information is accurate, timely or complete and it should not be relied upon as such. Opinions expressed are our current opinions as at the date of this document only and are subject to change without notice. We endeavour to update on a reasonable basis the information discussed but regulatory, compliance or other reasons may prevent us from doing so. The publication and distribution of this document is not and does not imply any form of endorsement of any person, entity, service or product described or appearing here. This is not and does not constitute or form an offer to buy or sell nor the solicitation of an offer to buy or sell any security or financial instrument nor to participate in any particular trading or investment strategy. We are not soliciting any action based on this document. The information, services and products described or appearing here are intended only for Accredited Investors (as currently defined in the Securities and Futures Act) and are not intended for nor targeted at the public in any specific jurisdiction. This information does not take into account the particular investment objectives, financial situations or needs of individual investors. Investors should seek independent financial, tax or legal advice or make independent investigations as considered necessary or appropriate before making an investment decision. Investments involve risk. Any past performance, projection, forecast or simulation of results is not necessarily indicative of the future or likely performance of any investment instrument.

Essential SSL