Forex - US: North American Summary and Highlights 21 Apr

Overview

A rather choppy day though the dominant theme was a continued bearish break for core bonds, a move that continued out of the ECB and US data. That contributed to mixed cross currents elsewhere on the day (stemming commodities` ascent, with equities capped).

News highlights

* Initial Claims 247k from 253 vs Mkt 265, fresh 43yr lows

* Apr Philadelphia Fed Survey -1.6 from 12.4 vs Mkt 9, though 6mth expectations 42.2 versus 28.8 the highest since Jan 2015

* Mar Leading Indicator 0.2% m/m from -0.1R vs Mkt 0.4

* Mar Chicago Fed National Activity Index -0.44 from -0.38

Currencies:

* Some lively trade through the ECB press conference after policy was left unchanged, EUR/USD racing to 1.1394 as Draghi said that broad financing conditions had improved, but turning around to a session low at 1.1270 after the rest of the (short) statement provided nothing new.

* USD/JPY could not match the Asia session high, EUR/JPY sharply lower as USD/JPY stuck to a relatively tight range.

* The USD ended up generally better bid, that taking some of the recent gloss off the recent commodity currency rally with AUD/USD back below .7750, NZD/USD around session lows near .6900. USD/CAD pushed above 1.2700, inflation and retail sales data Friday offering some variety from watching Crude (marginally lower).

* GBP ignored soft retail sales data earlier, Cable actually seeing a small dip a few minutes before the release to ask more questions about security. We did see a high at 1.4440 before it was dragged lower by the EUR/USD swoon.

* SEK took a dive despite a surprise increase in QE announced by the Riksbank, though bouncing from below 9.12 to be close to square on the day by the close. Riksbank Gov Ingves again said that the Bank has a right to intervene if it sees fit.

* EUR/CHF tagged 1.1000, some suggesting earlier that the SNB had been given a 'heads-up' by the ECB but that looking very unlikely.

Bonds:

Wednesday`s late UST liquidation continued, taking out further stops after the low claims print (despite the Philly Fed), before a bit of intraday covering as oil came off the top faded as equities fell. 2s +1.6bps @ 0.81%, 5s +2.5bps @ 1.34%, 10s +2.3bps @ 1.87%, 30s +3.7bps @ 2.69%.

* Agency Spreads: Freddie/Fannie 5s 0.0/-0.6 bps, 10s +7.0/+1.2 bps.

* Swap Spreads: 2s -0.52bps, 5s -0.38bps, 10s -0.29bps.

Equities:

S&P future still proving tightly capped below 2.1k or so. Commodities mildly off the top as USD bounces, provides a touch of restraint on the day. With mixed earnings also playing to the trade the S&P fell 0.52%.

To Be Released -

Data:

04:30 GMT - JP: METI Tertiary activity index (Feb) % m/m (Mkt: -0.5 Prev: 1.5)

07:00 GMT - FR: Manufacturing PMI (Prelim) (Apr) (Mkt: 49.9 Prev: 49.6)

07:00 GMT - FR: Services PMI (Prelim.) (Apr) (Mkt: 50.1 Prev: 49.9)

07:30 GMT - DE: Manufacturing PMI (Prelim.) (Apr) (Mkt: 51 Prev: 50.7)

07:30 GMT - DE: Services PMI (Prelim.) (Apr) (Mkt: 55.1 Prev: 55.1)

08:00 GMT - EU: Composite PMI (Prelim.) (Apr) 4cast: 53.3 (Mkt: 53.3 Prev: 53.1)

08:00 GMT - EU: Manufacturing PMI (Prelim.) (Apr) 4cast: 51.8 (Mkt: 51.9 Prev: 51.6)

08:00 GMT - EU: Services PMI (Prelim.) (Apr) 4cast: 53.3 (Mkt: 53.3 Prev: 53.1)

08:00 GMT - IT: Industrial Orders (nsa) (Feb) % y/y (Prev: 0.1)

08:00 GMT - IT: Industrial Orders (sa) (Feb) % m/m (Prev: 0.7)