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RANsquawk EU Open Rundown 05.04.17

  • Asia equity markets traded choppy following the mild gains on Wall St. which was led by the energy sector
  • FX markets were uneventful amid a lack of tier 1 data during the Asia session, which kept the USD range-bound
  • Looking ahead, highlights include Eurozone, UK and US Service PMI, ADP Employment Change and ISM Non-Manufacturing PMI, DoEs and FOMC Minutes
  • ASIA
  • Asia equity markets traded choppy following the mild gains on Wall St. which was led by the energy sector after WTI crude futures reclaimed the USD 51/bbl level to the upside. ASX 200 (+0.2%) swung between gains and losses as strength in commodity-related sectors was counterbalanced by losses in financials, while Nikkei 225 (+0.1%) saw a similar indecisive tone as USD/JPY and JPY-crosses teetered. Hang Seng (-0.3%) and Shanghai Comp. (+1.1%) were mixed on return from holiday after the PBoC refrained from liquidity injections, although the mainland outperformed amid strength in materials after a 7% surge in coking coal prices due to supply concerns following Cyclone Debbie. 10yr JGBs traded flat amid an indecisive tone in the region, while the BoJ’s presence in the market for a respectable JPY 1.135tln of JGBs failed to spur demand, as the bank also slightly reduced its buying in 1yr-3yr maturities.PBoC refrained from conducting open market operations today, for a net drain of CNY 90bln.

    PBoC set CNY mid-point at 6.8906 (Prev. 6.8993)

    EUROPE

    The French Presidential candidates conducted the 2nd debate ahead of the first-round elections later this month, in which an Elabe survey showed Melenchon was seen as the most convincing candidate and Macron 2nd, while an Opinionway poll suggested Melenchon, Macron and Fillon were tied as the most convincing in the debate. (Newswires)

    ECB's Liikanen stated that the ECB have highlighted that interest rates will stay low beyond the end of asset purchases and that this was undisputed. (Newswires)

    UK

    UK BRC Shop Price Index (Mar) (Y/Y) vs. -0.8% Exp. -0.8% (Prev. -1.0%). (Newswires)

    FX

    FX markets were uneventful amid a lack of tier 1 data during the Asia session, which kept the USD range-bound and saw USD/JPY choppy after failing to sustain an early recovery. Elsewhere, USD/CAD declined below the 1.3400 handle while AUD attempted to pare post-RBA weakness, with only brief support seen in the commodity-linked currencies despite gains in energy.

    COMMODITIES

    WTI crude futures extended on gains above the USD 51/bbl level following the drawdown in the latest API crude inventory report. Gold (-0.1%) prices were uneventful as the greenback remained rangebound tspanoughout the session, while copper was underpinned as the world’s largest copper consumer China returned to the market. Elsewhere, Dalian coking coal prices surged over 7% in early trade to post YTD highs amid supply concerns following Cyclone Debbie, while BHP Billiton also declared force majeure on its BMA and BMC coal in Australia.

    API Crude Oil Inventory Report (Mar 31) W/W -1834K (Prev. 1909K). (Newswires)

    CME decreased margin requirements for WTI crude oil to USD 2700 from USD 2900 per contract. (Newswires)

    GEOPOLITICAL

    North Korea fired a medium-range ballistic missile into the East Sea, which drew concern from South Korea and Japanese officials, with Japan Chief Cabinet Secretary Suga stating that the launch was an extremely problematic action. (Newswires/Yonhap)

    US

    Like in stocks, treasury complex lacked direction and in line US factory orders did nothing to inspire movement, one way or the other. That said, data this week is set to take focus for participants, including the ISM manufacturing report and the monthly NFP jobs figures. The 10y Jun’17 T-note future closed unchanged at 125.01.

    Richmond Fed President Lacker (Non-Voter, Hawk) said he is resigning effective today after improperly disclosing confidential information to Medley. (Newswires)

    House Republican talks on Tuesday evening with Vice President Pence and other administration officials failed to reach an agreement on how to revive the healthcare bill. (WSJ)

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MOC: * SPX 850mln to sell (vs at 650mln to sell at 1549 EDT) * Dow 50mln to sell (vs 100mln to buy at 1549 EDT)