Dollar turns higher vs. yen after U.S. data

The dollar erased losses against the yen on Monday after better-than-expected U.S. data on personal spending and pending home sales.

During U.S. morning trade, the dollar rose to session highs against the yen, with USD/JPY edging up 0.08% to 98.14, up from session lows of 97.36.

The dollar found support after official data showed that U.S. consumer spending rose 0.2% in March, above expectations for a modest 0.1% increase.

The data eased concerns over the outlook for the U.S. economic recovery after data on Friday showed that the U.S. economy expanded by 2.5% in the first quarter, below expectations for 3% growth.

A separate report by the National Association of Realtors said its pending home sales index rose by 1.5% in March, beating expectations for a 1% gain.

Markets were looking ahead to the outcome of the Federal Reserve’s upcoming policy meeting on Wednesday for further cues on the direction of monetary policy.

The dollar was lower against the euro, with EUR/USD rising 0.53% to 1.3098.

The euro was boosted as Italy saw borrowing costs fall to the lowest levels since October 2010 at an auction of five and 10-year bonds on Monday, after a new government was sworn in over the weekend, ending two months of political deadlock.

But sentiment on the single currency remained fragile ahead of Thursday’s European Central Bank policy meeting, amid speculation over an interest rate cut following recent weak economic data.

Recent comments by ECB officials have indicated that the bank would consider cutting rates if economic data continued to deteriorate.

The dollar pulled back from two-and-a-half month lows against the pound, with GBP/USD up 0.10% to 1.5492, off session highs of 1.5546.

Demand for sterling continued to be underpinned after data last week showed that the U.K. economy returned to growth in the first quarter, avoiding a triple-dip recession.

The dollar was lower against the Swiss franc, with USD/CHF losing 0.59% to trade at 0.9368.

The greenback was broadly weaker against its Australian, New Zealand and Canadian counterparts, with AUD/USD rising 0.61% to 1.0343, NZD/USD rallying 0.85% to 0.8552 and USD/CAD shedding 0.31% to trade at 1.0138.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.39% to 82.25.

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Forex Outlook – Action Packed Week Ahead

EUR – The Magnetic Attraction of 1.30
JPY – Will Short Yen turn into the Long Gold Trade?
GBP – Ends Week at 2 Month High
NZD – Shrugs Off Stronger New Zealand Trade Numbers
CAD – Higher Gold and Oil Prices
AUD– Heavy Chinese and Australian Data Calendar Next Week

Forex Outlook – Action Packed Week Ahead
Strap on your seatbelts, we have an action packed week in the forex market ahead. Key economic reports are expected from the U.S., Eurozone, China, U.K. and Australia. With so much economic data on the calendar, it will be difficult to tell which ones will have the largest impact on currencies.

In the U.S., we have a Federal Reserve monetary policy meeting along with ISM numbers and non-farm payrolls. Considering that the Fed has no reason to act, we don’t expect much from the FOMC statement. Instead, non-farm payrolls will be the number to watch, but given that it's at the very end of the week, country specific factors rather than risk on / risk off sentiment should drive currency flows for most of the week. In other words, the performance of the dollar could be mixed in the coming days depending upon how Chinese, U.K. and Australian data fare and whether the ECB cuts interest rates.

However, we fear that the PMI numbers from these countries will show a slower pace of growth in the month of April, which could compound concerns about the sustainability of the global recovery. If we are right, the stall that we are seeing in some of the major currencies and maybe even equities could turn into a more significant reversal.

The 4 key events next week will be Chinese manufacturing PMI on Tuesday evening, the FOMC rate decision on Wednesday, ECB rate announcement on Thursday and Friday’s non-farm payrolls report. Despite last month’s abysmal non-farm payrolls number and decline in consumer spending, the Federal Reserve is not expected to alter its stance on monetary policy.

Based upon the Beige Book report, there is evidence that the pullback in March did not extend until April and some policymakers share this view. The answer lies in Friday’s non-farm payrolls report. Economists are looking for job growth to rebound from 88K in March to 150K in April. Anything less than 100K will drive the dollar lower, particularly against the yen. Job growth between 100K to 175K will be a relief for the Fed but probably won’t inspire much optimism in the market. We need to see job growth in excess of 200K for the rally in USD/JPY to resume.
EUR – The Magnetic Attraction of 1.30
There’s something to be said about the magnetic attraction of the 1.30 level in the EUR/USD. Despite extremely disappointing economic data this past week and discussions about the possibility of a rate cut by European Central Bank policymakers, the euro refuses to fall.

Each time the currency pair dropped below 1.30, it was quickly magnetized back above this key level. 1.30 may be an important psychological support level for the currency pair but given that the EUR/USD dropped to 1.2955 this past week, 1.2950 could be the more significant level. Friday morning’s U.S. GDP report fell short of expectations, which helped to drive the U.S. dollar lower but the benefit to the EUR/USD pair was only a mere 25 pips or so.

Instead, we think there’s a tremendous amount of stop orders and option barriers below 1.2950 that are keeping EUR/USD propped above this level. Therefore, a very big catalyst is needed for the EUR/USD to see a sustained break below 1.30 and more specifically 1.2950. There’s no shortage of event risks this coming week that could trigger that move including Eurozone confidence numbers, German retail sales, German unemployment, Final Eurozone PMI and of course, the ECB rate decision.

The key to the EUR/USD’s fate lies in whether or not the ECB cuts interest rates. If they do, 1.2950 will break easily and even if they don’t and set the stage for a rate cut in June, the EUR/USD could also move significantly lower. If the central bank sounds wishy-washy and noncommittal about the need for a rate cut, expect the EUR/USD to hold 1.30 and power higher.
JPY – Will Short Yen turn into the Long Gold Trade?
All of the Japanese yen crosses traded lower Friday with USD/JPY, EUR/JPY, CAD/JPY and AUD/JPY falling more than 1%. The Bank of Japan did not announce any new monetary easing measures Thursday night, which wasn’t a surprise but investors were still disappointed because policymakers can’t agree on whether 2% inflation can be achieved in 2 years.

According to their median forecasts, CPI is expected to hit 1.9% in March 2016, which is 3 and not 2 years from now. Going into Thursday night’s event risks, we said that the sooner the BoJ expects to reach their goal, the more positive it would be for USD/JPY. Unfortunately the BoJ now expects this target to be reached at the end of 3 years, 1 year longer than their initial pledge. In other words they just started easing aggressively and they have already resigned themselves to failure.

Driving inflation up to 2% was never going to be easy, especially with CPI dropping further last month but the range of forecasts by BoJ policymakers is wide with some members looking for CPI to be at 0.8% and others at 2.3%, implying that there is a huge amount of division within the central bank. So with BoJ officials skeptical about their own ability to boost inflation to 2%, it is no surprise to see USD/JPY under pressure. For the time being this should be a near term top in USD/JPY.

We have seen zero evidence of Japanese investors raising their foreign bond exposure and until all of the investment plans by Japanese lifers to diversify are put into action (which will happen eventually), there’s no reason for FX traders to jump back into the short yen trade. Hopefully this won’t turn into the Gold trade where everyone bought gold on the expectation that QE would drive up inflation only to be stopped out brutally – but we wouldn’t be surprised if it did.

If Japanese stocks continue to perform well, Japanese investors could keep their money in domestic equities. There is some hope for USD/JPY this coming week however – if U.S. yields rise on optimism from the Fed or stronger non-farm payrolls numbers, it could reverse the slide, but unless we have a blowout NFP number (250K or more), USD/JPY may not be able to break 100.
GBP – Ends Week at 2 Month High
What a week it was for the British pound. The currency pair climbed to its highest level in 2 months thanks to Thursday’s stronger GDP report and Friday’s sharp rise in the services index.

While the data was for the month of February, the services industry expanded at its fastest pace in 6 months. This coming week’s economic reports will shed light on whether the outperformance of the U.K. economy continued. Aside from consumer confidence, manufacturing, construction and services, PMI numbers are scheduled for release. Currently economists are looking for very minor improvements. If the data is good, the rally in the GBP/USD could extend to 1.56. If they surprise to the downside--and the chance is high given the sharp drop in the CBI index-- the rally could fizzle quickly as speculation of the need for additional returns. Remember, the chance of additional Quantitative Easing is not off the table – this week’s economic reports only softens the case and pushes the decision to Mark Carney, when he becomes central bank governor in July.
NZD – Shrugs Off Stronger New Zealand Trade Numbers
It was a mixed day Friday for the commodity currencies with the Australian dollar holding steady, New Zealand dollar ticking lower and the Canadian dollar tacking on gains against the greenback. New Zealand was the only one of the three countries to release economic data at the very end of last week, but the stronger trade balance failed to lift the NZD/USD.

Thanks to a sizeable increase in exports in the month of March, New Zealand’s trade surplus rose to 718M from 441M, the highest level since April 2011. Stronger exports of meat and edible offal helped to drive the increase, and the belief is that the farmers stepped up their early production of meat exports because of the drought.

Dairy exports on the other, the bread and butter of New Zealand were surprisingly weak but nonetheless the stronger trade numbers are consistent with the RBNZ’s recent optimism. While there was no data from Canada or Australia, both currencies recovered from earlier losses this past week. A rebound in commodity prices and stronger than expected Canadian retail sales helped the rally.

This coming week, Australian and Chinese PMI numbers are due for release, which means that the AUD/USD will be in play. Further weakness could drive the currency pair below 1.02.

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EUR/USD trims gains after mixed U.S. economic reports

The euro trimmed gains against the U.S. dollar on Friday, pulling away from session highs, although the release of mixed U.S. economic reports weighed on demand for the greenback.
EUR/USD pulled away from 1.3048, the session high, to hit 1.3015 during U.S. morning trade, still up 0.03%.

The pair was likely to find support at 1.2956, the low of April 24 and resistance at 1.3094, Thursday's high.
Final data showed that the University of Michigan's consumer sentiment index rose to 76.4 in April, from a reading of 72.3 the previous month, beating expectations for an increase to 73.2.
The data came after the Bureau of Economic Analysis said, in a preliminary report, that U.S. gross domestic product rose 2.5% in the first quarter, less than the expected 3.0% increase, after a 0.4% rise in the previous quarter.
Meanwhile, te euro remained under pressure amid speculation over a possible rate cut by the European Central Bank after Goldman Sachs on Thursday said it now expects the ECB to cut rates by 0.25% at next week's policy meeting.

The investment bank also revised down its euro zone growth forecast for 2013 to minus 0.7% from minus 0.5% previously.
Markets were also eyeing a series of new growth measures to be unveiled by the Spanish government, a day after official data showed that the unemployment rate ticked up to 27.2% in the first quarter, from 26.0% in the previous quarter, compared to expectations for a rise to 26.5%.
The euro was lower against the pound with EUR/GBP shedding 0.34%, to hit 0.8401. 

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U.S stocks rise on falling jobless claims; Dow gains 0.17%

U.S. stocks finished Wednesday higher after the U.S. government reported that jobless claims came in lower than expected last week.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.17%, the S&P 500 index was up 0.40%, while the Nasdaq Composite index rose 0.62%.

In the U.S. earlier, the Department of Labor reported that the number of people filing for initial jobless claims fell by 16,000 to 339,000, last week, outpacing market expectations for a drop of 4,000 to 351,000.

Jobless claims for the preceding week were revised up to 355,000 from a previously reported increase of 352,000.

The numbers sent traders snapping up equities, especially after better-than-expected earnings hit the wire.

Earlier Thursday, ExxonMobil, Dow Chemical and UPS released earnings reports that topped market expectations, among others.

Trading as was somewhat cautious, as investors kept an eye out for gross domestic product growth rates due out on Friday.

Leading Dow Jones Industrial Average performers included Verizon Communications, up 2.82%, Cisco Systems, up 1.28%, and IBM, up 1.16%.

The Dow Jones Industrial Average's worst performers included 3M, down 2.76%, ExxonMobil, down 1.48%, and Hewlett-Packard, down 1.21%.

European indices, meanwhile, finished largely higher.

After the close of European trade, the EURO STOXX 50 rose 0.09%, France's CAC 40 fell 0.06%, while Germany's DAX 30 finished up 0.95%. Meanwhile, in the U.K. the FTSE 100 finished up 0.17%.

U.S. investment bank Goldman Sachs said earlier it expected the European Central Bank to trim benchmark interest rates 25 basis points at its monetary policy meeting next Thursday, which pushed stock prices higher.

On Friday, the U.S. will release preliminary data on first quarter growth.

The U.S. is also to release revised data from the Thomson Reuters/University of Michigan on consumer sentiment and inflation expectations.

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GBP/USD at session lows after euro zone data

The pound fell to session lows against the dollar on Tuesday after weak purchasing managers’ index from the euro zone and China underlined concerns over the outlook for global growth.

GBP/USD hit 1.5197 during European morning trade, the pair’s lowest since April 4; the pair subsequently consolidated at 1.5217, shedding 0.47%.

Cable is likely to find support at 1.5177, the low of April 1 and resistance at 1.5296, the session high.

In the euro zone, data showed that Germany’s manufacturing PMI fell to 47.9 from 49.0 in March, well below the 50 level which separates contraction from expansion.

Germany’s services PMI came in at 49.2, down from 50.9 in March, the fastest rate of contraction in six months.

The euro zone’s manufacturing PMI ticked down to 46.6 from 46.8 in March, worse than expectations for an unchanged reading.

The currency bloc’s services PMI edged up to 46.6 from 46.4 in March, in line with expectations.

The weak data added to fears that the recession in the euro zone would extend into the first quarter and fuelled speculation over a possible rate cut by the European Central Bank.

Earlier Tuesday, a report showed that the preliminary reading of China’s HSBC manufacturing purchasing managers’ index was 50.5 for April, down from a final reading of 51.6 in March.

The weak data appeared to point to a slower rate of growth in the manufacturing sector of the world’s second largest economy.

In the U.K., official data showed that public sector borrowing fell to GBP114.2 billion in the financial year which ended in March, from GBP120.9 billion in the previous financial year.

Sterling was higher against the euro, with EUR/GBP slipping 0.11% to 0.8533.

The U.S. was to release official data on new home sales later in the trading day.

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After China PMI disappoints; Nikkei down 0.28%

Most Asian stocks declined during Tuesday’s session after the HSBC flash reading of China’s April purchasing managers index indicated the world’s second-largest economy does not have the full head of steam that some market participants had hoped.

In Asian trading Tuesday, Japan’s Nikkei 225 fell 0.28% as USD/JPY continued to encounter problems in its efforts to cross 100. Japanese stocks were the regional leaders, just has they have been for all of this year.

Hong Kong’s Hang Seng dropped 0.90% while the Shanghai Composite slid 1.39% after The flash HSBC Purchasing Managers' Index for April fell to 50.5 from 51.6 in March. The April reading is ahead of the February reading of 50.4. Readings above 50 indicate expansion.

The new export orders index fell to 48.6 in April from 50.5 in March, highlighting the fact that the global economic recovery remains tepid. China’s PMI report comes barely more than one week after the country said its first-quarter GDP grew by 7.7%, disappointing analysts that expected growth of 8%.

China’s PMI news comes just a day after the U.S. disappointed with its economic news. In U.S. economic news out Monday, the National Association of Realtors said existing home sales dropped 0.6% to a seasonally adjusted annual rate of 4.92 million in March from a downwardly revised 4.95 million in February. Economists expected an increase in March, but the number was still higher by 10.3% on a year-over-year basis.

Perhaps surprisingly Australian and New Zealand equities were among Asia’s best performers as Australia’s S&P/ASX 200 rose 0.90% while New Zealand’s NZSE advanced 0.72%. Both countries are major trading partners with China, but stocks in Australia and New Zealand may be advancing today because the dollar of both countries are trading lower against the U.S. dollar.

South Korea’s Kospi and Singapore’s Straits Times Index both fell by 0.65%. S&P 500 futures dropped 0.31%. The benchmark U.S. index rose modestly on Monday.

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USD/JPY dips as market view yen as attractively priced

The dollar fell against the yen on Monday after the Japanese currency found support after G20 policymakers voiced no opposition to the Bank of Japan's stimulus measures at a recent meeting.

The yen fell earlier amid sentiments Japanese monetary authorities may increase stimulus measures, though the unit eventually found support after U.S. housing data disappointed earlier.

In U.S. trading on Monday, USD/JPY was trading at 99.34, down 0.19%, up from a session low of 98.98 and off a high of 99.89.

The pair was likely to find resistance at 99.89, the earlier high, and support at 98.98, the earlier low.

The yen dropped earlier after G20 officials voiced no opposition to Japan's shift to more aggressive monetary easing policies, which sparked sentiments the Bank of Japan has room to loosen policy even further.

Japan has insisted its monetary policy aims to steer the country away from deflationary decline and not to weaken its currency for trade advantages.

The yen, however, found support levels and regained its strength against the greenback, especially after U.S. housing figures disappointed.

The National Association of Realtors reported earlier that U.S. existing home sales fell 0.6% to 4.92 million units in March compared to February’s revised total of 4.95 million.

February existing home sales initially came in at 4.98 million units.

Analysts were expecting U.S. existing home sales to rise to 5.01 million units in March.

The figures fueled talk that the Federal Reserve won't rush to dismantle its bond-buying program and other stimulus tools already in place, which took steam out of the greenback.

The yen, meanwhile was flat against the pound and up against the euro, with GBP/JPY unchanged at 151.56 and EUR/JPY trading down 0.28% at 129.53.

On Tuesday, the U.S. will unveil official data on new home sales as well as preliminary data on manufacturing activity.

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Asian stocks rise on bargain hunting; Nikkei up 0.61%

 Asian stocks rose in the week’s final trading day as traders did some bargain hunting following another down for U.S. equities Thursday.

In Asian trading Friday, Japan’s Nikkei 225 rose 0.61% as USD/JPY climbed on hopes the Bank of Japan could deliver additional monetary stimulus when it meets next week. The dollar hit a four-year high of 99.93 against the yen last week after the BoJ pledged to double its asset purchase program over the next two years and extend the maturities of the bonds it purchases.

Hong Kong’s Hang Seng climbed 0.81% while the Shanghai Composite jumped 1.06%. Bank stocks and consumer shares lead Chinese equities higher a day after Zhu Baoliang, head of the State Information Center’s economic forecast department, second the world’s second-largest could rebound in the current and third quarter.

Earlier this week, China cast a pall over global financial markets by reporting first-quarter GDP growth of 7.7%, below analysts’ expectations of 8% growth.

Australia’s S&P/ASX 200 rose 0.3% helped by gains in mining shares. Shares of BHP Billiton and rival Rio Tinto, two of the world’s largest mining companies, rebounded in earnest after being punished throughout the week on the back of the slack China GDP report. China is Australia’s largest trading partner.

New Zealand’s NZSE 50 added 0.15% a day after the International Monetary said the New Zealand dollar is overvalued. The IMF made similar remarks about the Australian dollar.

South Korea’s Kospi advanced 0.40% after South Korean Finance Minister Hyun Oh Seok said the weak yen poses a bigger threat to his country’s economy than the specter of military action by North Korea. South Korea has been among the most vocal critics of Japan’s weak yen policies.

Singapore’s Straits Times Index inched lower by 0.12%. S&P 500 futures added 0.25%. The benchmark U.S. index has finished in three of four trading days this week.

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European stocks remain higher despite growth concerns; Dax up 0.51%

European stocks remained higher on Thursday, supported by indications of a possible rate cut by the European Central Bank, although global growth concerns continued to weigh on market sentiment.
During European afternoon trade, the EURO STOXX 50 jumped 0.90%, France’s CAC 40 rallied 0.90%, while Germany’s DAX 30 climbed 0.51%.

ECB Governing Council member Jens Weidmann said Wednesday that the bank could cut interest rates if economic data indicated that it was warranted.
Meanwhile, investors remained cautious after the International Monetary Fund on Tuesday said continued monetary stimulus by the Federal Reserve and the Bank of Japan was expected to continue to support growth in the U.S. and Japan, while the euro zone still posed the greatest threat to a recovery in the global economy.

Financial stocks remained broadly higher, as shares in French lenders Societe Generale and BNP Paribas advanced 0.60% and 2.09%, while Germany's Deutsche Bank jumped 1.16%.
Peripheral lenders added to gains, with Spanish banks Banco Santander and BBVA advancing 0.78% and 0.89%, while Italy's Intesa Sanpaolo and Unicredit rallied 0.80% and 2.62%.
Elsewhere, Carrefour added 0.15% after France’s biggest retailer reported first-quarter revenue of EUR20.8 billion, in line with analyst estimates.
In London, FTSE 100 gained 0.43%, even as data showed that U.K. retail sales fell in March, underlining concerns over the outlook for first quarter growth.

Among earnings, Diageo Plc slid 0.33% after the distiller reported third-quarter sales that missed predictions as volumes dropped amid slowing European demand.
Meanwhile, U.K. lenders were mixed, as shares in HSBC Holdings and Lloyds Banking inched up 0.06% and 0.08%, while Barclays and the Royal Bank of Scotland retreated 0.38% and 0.97%.

Mining stocks remained mostly lower, with BHP Billiton declining 0.87%, while Antofagasta and Eurasian Natural Resources plunged 4.58% and 8.47% respectively.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.28% gain, S&P 500 futures signaled a 0.27% rise, while the Nasdaq 100 futures indicated a 0.28% increase.
Later in the day, the U.S. was to release official data on initial jobless claims and the Philly Fed manufacturing index.

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Most Asian stocks fall on growth concerns; Nikkei down 0.40%

Most Asian stocks took cues from their U.S. counterparts Thursday and traded lower amid lingering concerns about global economic growth.

In Asian trading Thursday, Japan’s Nikkei 225 fell 0.40% on a volatile day for USD/JPY. The pair traded slightly lower after Japan’s Ministry of Finance said the country’s exports rose 1.1% last month, easily topping the 0.4% increase forecast by economists. Japanese exports dropped 2.9% in February. For the fiscal year ending in March, Japan showed a trade deficit of JPY8.17 trillion.

Still, the export number indicates Japan’s weaker yen policy is starting to pay dividends for exports in the world’s third-largest economy. Elsewhere, the Reuters Tankan survey for April showed sentiment improved among Japanese manufacturers this month, the fifth straight month that has happened.

Hong Kong’s Hang Seng inched up 0.02% while the Shanghai Composite added 0.26%. Chinese stocks were among the region’s bright spots after the Ministry of Commerce said in a statement that foreign direct investment into the world’s second-largest economy jumped 5.65% last month to USD12.4 billion.

Foreign direct investment in China in the first quarter rose 1.44% to USD29.9 billion, according to the data.

Australia’s S&P/ASX 200 Index fell 0.6% as BHP Billiton, the world’s largest mining company, slid more than 3%.

New Zealand’s NZSE 50 dropped 0.26% after the Real Estate Institute of New Zealand data showed the median price per hectare for rural land rose 11.3% to NZD22,317 per hectare in March from March 2012. The March reading was a 1.7% increase from February. Farm sales slightly eased.

South Korea’s Kospi was dragged lower by 0.27% amid weakness in technology shares a day after Apple, the largest U.S. tech stock by market value, briefly slipped below the mentally important USD400 per share level during Wednesday’s U.S. session.

Singapore’s Straits Times Index rose 0.18% while S&P 500 futures inched up 0.07%.

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Dollar rallies more than 1% against euro

The dollar rallied against the euro on Wednesday after a senior European Central Bank official said the bank may adjust interest rates if new economic data warrants a rate cut.

During U.S. morning trade, the dollar extended gains against the euro, with EUR/USD tumbling 1.02% to 1.3040.

The euro weakened broadly after ECB Governing Council member Jens Weidmann said the bank could cut interest rates if economic and inflation data indicated that it was warranted.

The comments came in an interview in the Wall Street Journal ahead of a weekend meeting of the International Monetary Fund.

On Tuesday, the IMF trimmed its 2013 forecast for global growth but said continued monetary stimulus by the Federal Reserve and the Bank of Japan was expected to continue to support growth in the U.S. and Japan, while the euro zone still posed the greatest threat to a recovery in the global economy.

The dollar was slightly higher against the yen, with USD/JPY easing up 0.16% to 97.70, down from session highs of 98.44.

Investors were looking ahead to a meeting of finance ministers and central bank heads from the Group of 20 nations on Thursday and Friday, amid speculation over whether Japan will face criticism over the Bank of Japan’s aggressive easing.

The dollar rose to more than one-week highs against the pound, with GBP/USD dropping 0.93% to 1.5219.

Sterling fell against the dollar after official data showed the U.K. unemployment rate unexpectedly rose to 7.9% last month, from 7.8% in February. Analysts had expected the unemployment rate to remain unchanged.

Average U.K. earnings rose by a seasonally adjusted 0.8% year-on-year in the three months to February, below expectations for a 1.2% increase.

The number of people seeking unemployment benefits fell by a seasonally adjusted 7,000 in March, compared to expectations for an increase of 500.

Meanwhile, the minutes of the Bank of England’s April meeting showed that policymakers remained divided over more easing.

The dollar extended strong gains against the Swiss franc, with USD/CHF advancing 0.94% to 0.9312.

The greenback was broadly stronger against its Canadian, Australian and New Zealand counterparts, with USD/CAD rising 0.56% to 1.0268, AUD/USD down 0.75% to 1.0314 and NZD/USD losing 0.48% to trade at 0.8452.

The Canadian dollar hit session lows against the greenback after the Bank of Canada left rates on hold at 1.0%, but cut its outlook for economic growth following its policy-setting meeting.

The BoC trimmed its forecast for growth in 2013 to 1.5% from 2.0% in its January monetary policy report and cut its 2014 forecast to 2.7% from 2.8%.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.99% to a seven-day high of 82.69.

The Federal Reserve was to produce its beige book later in the trading day.

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Dollar rises vs. yen, euro

The dollar rose against the yen on Wednesday as better-than-forecast data eased concerns over the U.S. economic recovery and investor focus returned to the impact of the Bank of Japan aggressive easing program.

During European morning trade, the dollar was higher against the yen, with USD/JPY climbing 0.63% to 98.15.

Data on Tuesday showed that U.S. industrial production and housing starts rose at a faster-than-forecast pace in March, easing concerns that the U.S. economic recovery is faltering.

The yen retreated from multi-year lows against the dollar and the euro earlier in the week after weaker-than-expected Chinese first quarter growth and historic falls in gold prices enhanced the safe haven appeal of the Japanese currency.

Investors were looking ahead to a meeting of finance ministers and central bank heads from the Group of 20 nations on Thursday and Friday, amid speculation over whether Japan will face criticism over the BoJ’s unprecedented easing program.

The dollar edged higher against the euro, with EUR/USD slipping 0.12% to 1.3159.

The dollar gained ground against the pound, with GBP/USD down 0.24% to 1.5323 and was little changed against the Swiss franc, with USD/CHF inching up 0.04% to 0.9228.

The greenback was broadly stronger against its Australian, New Zealand and Canadian counterparts, with AUD/USD dropping 0.38% to 1.0351, NZD/USD losing 0.41% to trade at 0.8459 and USD/CAD rising 0.32% to 1.0243.

Earlier Wednesday, Australia’s Treasurer Wayne Swann criticized European leaders for their focus on “mindless austerity” in an interview with the Wall Street Journal.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.29% to 82.12.

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Gold plunges to 2-year low on technical selling, China GDP weighs

Gold futures extended losses from the previous session to hit a two-year low on Monday, as the U.S. dollar strengthened after official data showed that Chinese first quarter economic growth came in below expectations.

Gold’s losses accelerated sharply after prices broke below key support levels close to the USD1,477 and then the USD1,440-level, triggering a flurry of automatic sell orders amid bearish chart signals.

Prices of the precious metal are down nearly 25% since hitting an all-time high of USD1,920.80 an ounce in September 2011, meeting the standard for a bear market.

Market analysts have warned that gold prices could fall to as low as USD1,400 a troy ounce in the near-term, it’s 200-week moving average.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,445.05 a troy ounce during late Asian trade, down 3.8% on the day.

Comex gold prices fell by as much as 4% earlier in the session to hit a daily low of USD1,426.95 a troy ounce, the weakest level since April 1, 2011.

Gold prices were likely to find support at USD1,412.50 a troy ounce, the low from April 1, 2011 and resistance at USD1,476.25, the high from April 11, 2011.

The Chinese economy expanded by 7.7% year-on-year in the three months to March, down from 7.9% in the fourth quarter and undershooting expectations for 8.0% growth.

Separate reports showed that Chinese industrial production also came in below expectations, while retail sales rose slightly more than fore

The precious metal extended sharp losses from the previous session, when it tumbled more than 5% as sentiment on the precious metal was dampened after minutes from the Federal Reserve’s most recent policy-setting meeting showed the central bank is considering ending its bond-buying program sooner-than-expected.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank could bring quantitative easing, one of the biggest boosts to gold’s bull run, to an end this year.

News that Cyprus was to sell “the excess amount of gold” it owned to raise an estimated EUR400 million for its bailout also weighed on sentiment.

Elsewhere on the Comex, silver for May delivery lost 6.5% to trade at USD24.63 a troy ounce, while copper for May delivery dropped 1.35% to trade at USD3.290 a pound.

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Asian stocks falter after China GDP report; Nikkei down 1.21%

Asian stocks are trading broadly lower Monday after China’s first-quarter GDP report missed analysts’ estimates, stoking concerns that the recovery in the world’s second-largest economy is going slower than many market participants had hoped.

In Asian trading Monday, Japan’s Nikkei 225 is down 1.21%. USD/JPY traded higher earlier in the session, but reversed course and is now lower, furthering the selling pressure on Japanese shares.

Hong Kong’s Hang Seng slipped 1.32% while the Shanghai Composite fell 0.64% after China’s National Bureau of Statistics said the country’s GDP rose 7.7% in the first quarter on a year-over-year basis. Analysts expected growth of 8%.

In a separate report, the National Bureau of Statistics said industrial production rose 8.9% last month following a 9.9% increase in February. Analysts expected a March gain of 10%.

China’s retail sales grew 12.4% in the first quarter but that figure is down 2.4% on a year-over-year basis. The National Bureau of Statistics cited the government’s efforts to curb fiscal spending as one reason the retail sales number disappointed.

Australia’s S&P/ASX 200 slipped 1.1% following the Chinese data points. China is Australia’s largest trading partner. Gold miners, imperiled by bullion’s latest slide, are also weighing on Australian equities. U.S. data points from last week are also weighing on Australian stocks and AUD/USD.

Last Friday, the U.S. Commerce Department said in a report Friday that retail sales fell 0.4% in March, the largest decline in nine months and missing expectations for a 0.1% increase.

New Zealand’s NZSE 50 rose 0.04% to be one of the few bright spots in the region today, though that performance is somewhat surprising given that New Zealand is also heavily dependent on trade with China as an economic driver.

South Korea’s Kospi dropped 0.68% while Singapore’s Straits Times Index declined 0.28%. Singapore released a disappointing GDP number of its own last week.

S&P 500 futures are lower by 0.22%. The benchmark U.S. index gained more than 2% last week.

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Dollar pares gains vs. rivals but remains supported

The U.S. dollar pared gains against the other major currencies on Friday, after news of a final deal on a bailout for Cyprus, although concerns over the strength of the economic recovery in the U.S. weighed on the greenback.

During U.S. morning trade, the dollar was steady against the euro, with EUR/USD easing 0.06% to 1.3091.

At a meeting in Dublin, euro zone finance ministers backed a EUR10 billion bailout for Cyprus and the European Commission said it would try to help the island's economy grow again with better use of EU structural funds.

The ministerial support opens the way for several euro zone countries to seek approval for the three-year bailout in national parliaments in order for the loan agreement to be signed by April 24.

In addition, European Union finance ministers agreed to extend the maturities of emergency loans extended to Ireland and Portugal by seven years.

Earlier Friday, official data showed that industrial production rose 0.4% in February, more than the expected 0.3% increase, after a 0.2% rise the previous month.
The greenback was higher against the pound, with GBP/USD slipping 0.14% to 1.5363.
Elsewhere, the greenback was lower against the yen and the Swiss franc, with USD/JPY retreating 0.76% to trade at 98.89, and with USD/CHF edging down 0.17% to 0.9293.
Bank of Japan Governor Haruhiko Kuroda earlier said the central bank will not set a time limit for easing and will continue until it achieves sustainable inflation.
The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD edging up 0.19% to 1.0123, AUD/USD falling 0.22% to 1.0522 and NZD/USD retreating 0.45% to 0.8592.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.04% to 82.33.
In the U.S., the University of Michigan said its index of consumer sentiment declined far more-than-expected in April, falling to 72.3 from a reading of 78.6 the previous month. Analysts had expected the index to tick down to 78.5 this month.
The report came after official data showed that retail sales in the U.S. fell 0.4% in March, disappointing expectations for a 0.1% rise, after a 1% increase the previous month.
Core retail sales, which exclude automobiles also slipped 0.4% last month, after a 1% increase in February, compared to expectations for a 0.1% rise.
A separate report showed that U.S. producer price inflation, including food and energy, ticked down 0.6% in March, more than the expected 0.2% slip, after a 0.7% gain the previous month.
Core producer price inflation rose 0.2% last month, in line with expectations, following a 0.2% increase in February.
Investors were also eyeing an upcoming speech by Federal Reserve Chairman Ben Bernanke for indications of the future possible direction of monetary policy.

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AUD/USD slides after Aussie employment data

The Australian dollar is trading lower against its U.S. rival in Thursday’s Asian session following news of a surprisingly weak Aussie jobs number.

In Asian trading Thursday, AUD/USD is lower by 0.20% at 1.0524. The pair was likely to find support at 1.0448, the low of March 26 and resistance at 1.0549, the high of January 24.

Official data showed Australia’s unemployment rate rose to 5.6% last month from 5.4%. Analysts expected the number to hold steady at 5.4%. The number of employed Australians fell by 36,100 following a gain of 74,000 in February.

Australia’s unemployment rate for March is a three-year and could be a sign that businesses in the world’s 12th-largest economy are being crimped by the strong Australian dollar. The jobs number comes just a day after the Reserve Bank of Australia indicated it believes the economy can deal with the strong Aussie.

In a media interview, RBA board member John Edwards said he would prefer a lower Aussie, but added that the strong dollar is currently not causing problems that should force the central bank to respond in the near-term.

RBA next meets on May 7, but has left rates unchanged at 3% following its most recent meetings. Even RBA has acknowledged other sectors of the Australian economy need to pick up the slack as mining investment declines. It is widely believed Australia’s mining boom will peak this year.

The jobs report comes a day after the Westpac Banking Corporation said consumer sentiment in Australia fell 5.1% in April after a 2% increase the previous month.

Elsewhere, AUD/JPY fell 0.44% to 104.80 while EUR/AUD gained 0.09% to 1.2409. AUD/NZD slipped 0.30% to 1.2256

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Asian stocks mostly higher after China data; Nikkei up 0.73%

Most Asian stocks are trading higher at this hour following the release of China’s export and import data for March. The region’s equities are again following their U.S. counterparts higher a day after another strong performance for U.S. equities.

In Asian trading Wednesday, Japan’s Nikkei 225 is higher by 0.73%, although USD/JPY is trading slightly lower. Some traders expect it is only a matter of days before the pair hits 100.

On Tuesday, Japanese Prime Minister looked to assuage skittish investors about the potentially adverse effects of the weaker yen. Abe said "We’ll make efforts to prevent (the yen’s sharp slide) from strongly exerting a harmful influence (on the economy)."

Hong Kong’s Hang Seng rose 0.37% while the Shanghai Composite gained 0.06% after China’s Customs Administration said the country’s exports increased 10% last month, missing analysts’ estimates of a 10.5% increase.

The data showed China’s imports surged 14%, well above the consensus estimate of a 5.2% increase, leaving the world’s second-largest economy with a trade deficit of USD884 million compared with a February surplus of USD15.3 billion.

Surprisingly, Australia’s S&P/ASX 200 Index fell 0.2% on the China news. China is the largest destination for Australian exports and the Chinese import number should have, in theory, been good news for Aussie equities. BHP Billiton, the world’s largest mining company, is among the better performers in Australia today.

New Zealand’s NZSE 50 climbed 0.42% despite NZD/USD climbing above 85 cents for just the third time in three decades. New Zealand stocks were obviously not affected too deeply by the China data. China is New Zealand’s largest trading partner as well.

Singapore’s Straits Times Index fell 0.27% while South Korea’s Kospi gained 0.80% despite continued aggression from the north. S&P 500 futures fell 0.07%.

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Dollar jumps following BoJ, ECB news

Dollar is broadly higher against nearly all of its major rivals during Friday’s Asian session following monetary policy meetings by the European Central Bank and the Bank of Japan, among others.

In Asian trading Friday, EUR/USD is lower by 0.02% at 1.2934 after the European Central Bank opted to leave interest rates unchanged at its monetary policy meeting Thursday.

ECB President Mario Draghi tried to lift markets’ spirits by saying the central bank is still considering an array of actions to help the euro zone economy, remarks that traders took to mean ECB could be close to cutting rates or unveiling new stimulus measures.

The ECB’s benchmark interest rate has been 0.75% since July 2012. Draghi did not specify what measures are on the table in terms of helping European economies.

GBP/USD is down 0.07% at 1.5223 after the Bank of England left its benchmark interest rate and quantitative easing program unchanged as well. The U.K.’s interest rate has now resided at 0.5% since March 2009 and its bond-buying program remains at USD568 billion.

Sterling has been under significant pressure this year and is the world’s second-worst performing developed market currency behind the yen.

USD/JPY is up 0.55% at 96.86 after new Bank of Japan Governor Haruhiko Kuroda unveiled what he called a "new phase of monetary easing." Thursday’s moves in USD/JPY and EUR/JPY were the largest for those pairs since 2008.

The Bank of Japan earlier said it will double its asset-purchasing program over the next two years and extend the maturities of the bonds it purchases.

USD/CHF fell 0.02% to 0.9397 while USD/CAD rose 0.02% to 1.0132.

In U.S. economic news, initial claims for jobless benefits rose by 28,000 last week to 385,000, the highest level in four months. That reading is well above the 353,000 claims economists expected. The less volatile four-week moving average increased by 11,250 claims to 354,250. The Labor Department delivers the March non-farm payroll report and U.S. unemployment rate Friday before the open of U.S. markets.

AUD/USD is lower by 0.16% at 1.0418 a day after Australia delivered some solid economic data. USD/NZD is off 0.19% at 0.8408. The U.S. Dollar Index is higher by 0.08% at 82.91.

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EUR/USD lower as Draghi comments awaited

The euro was trading near four-month lows against the dollar on Thursday as concerns over the deteriorating outlook for the euro zone weighed ahead of the European Central Bank’s policy decision later in the session.
EUR/USD hit 1.2784 during European morning trade, the pair’s lowest since Monday; the pair subsequently consolidated at 1.2796, shedding 0.40%.

The pair was likely to find support at 1.2750, the low of March 27 and a four-month trough and resistance at 1.2852, the session high.

The ECB was not expected to announce any changes to monetary policy on Thursday.

Investors remained wary ahead of comments from President Mario Draghi at the bank’s post-policy meeting press conference after recent weak economic data added fears over the outlook for first quarter growth.

Worries over the possible implications of the bailout deal for Cyprus and ongoing political uncertainty in Italy also weighed.

The euro rallied against the broadly weaker yen, with EUR/JPY jumping 2.24% to 122.19 after the Bank of Japan implemented aggressive easing measures, aimed at combating deflation in the world’s third largest economy.

The BoJ, under newly appointed Governor Haruhiko Kuroda, said it plans to double its asset purchase program over the next two years and extend the maturities of the bonds it purchases.

Elsewhere, the euro was slightly higher against the pound, with EUR/GBP edging up 0.12% to 0.8499.

The pound re4mained supported after data showing that the U.K. service sector expanded at the fastest pace in seven months in March fuelled hopes that the economy will narrowly avoid a triple-dip recession.

The Bank of England was expected to keep monetary policy unchanged after its meeting later Thursday.

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ADP Nonfarm Payrolls Increased

The dollar fell to session lows against the euro and the yen on Wednesday following the release of weaker-than-expected U.S. employment and service sector data.

During U.S. morning trade, the dollar was trading close to session lows against the euro, with EUR/USD rising 0.25% to 1.2849.

The dollar weakened broadly after data showed that the U.S. service sector expanded at the slowest pace in five months in March.

The Institute of Supply Management said its non-manufacturing purchasing manager's index fell to 54.4 from a reading of 56.0 in February.

Analysts had expected the index to decline to 55.8 last month.

The report came on the heels of data showing that the U.S. private sector added far fewer jobs than expected last month.

ADP nonfarm payrolls increased by a seasonally adjusted 158,000 in March, well below expectations for a gain of 200,000, following an upwardly revised increase of 237,000 in February.

Sentiment on the single currency remained fragile as investors awaited the outcome of the European Central Bank’s policy meeting on Thursday.

The ECB was not expected to announce any changes to monetary policy, but investors were awaiting comments from President Mario Draghi at the bank’s post-policy meeting press conference.

The dollar was close to five-week lows against the yen, with USD/JPY down 0.59% to 92.86.

The yen’s gains looked likely to remain limited as expectations for aggressive easing measures by the Bank of Japan under new Governor Haruhiko Kuroda remained intact ahead of the conclusion of the bank’s policy meeting on Thursday.

The dollar was lower against the pound, with GBP/USD rising 0.27% to 1.5144.

The pound briefly touched session lows earlier after data showed that the U.K. construction sector remained in contraction territory for the fifth successive month in March.

The Markit U.K. construction purchasing managers' index ticked up to 47.2 from 46.8 in February, still below the 50 mark that separates growth from contraction and undershooting forecasts for a reading of 47.5.

The dollar fell to session lows against the Swiss franc, with USD/CHF falling 0.41% to 0.9452.

The greenback was broadly weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD dropping 0.18% to 1.0129, AUD/USD rising 0.35% to 1.0486 and NZD/USD climbing 0.28% to 0.8440.

In Australia, official data showed that the trade deficit narrowed to AUD178 million in February from a deficit of AUD1.2 billion the previous month, compared to expectations for a deficit of AUD1 billion.

Elsewhere data showed that China's HSBC’s services PMI rose to a six-month high of 54.3 in March, while the official version of the services PMI rose to 55.6 in March from 54.5 in February.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.26% to 82.86.

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Nikkei Down 1.74%

Most Asian stocks are trading lower at this hour as traders await headlines from the conclusion of the Bank of Japan’s monetary policy meeting later today.

In Asian trading Thursday, Japan’s Nikkei 225 is down 1.74% as traders fret that Governor Haruhiko Kuroda, presiding over his first meeting at the helm of the central bank, will not be able to deliver the goods in terms of additional monetary stimulus measures.
USD/JPY is trading slightly lower on speculation that Kuroda is having difficulty building a consensus among BoJ members to move forward with immediate stimulus efforts. With expectations high for Kuroda to deliver news that will weaken the yen, yen bears are arguably pensive today.

Hong Kong’s Hang Seng is lower by 0.14% while the Shanghai Composite is down 0.11% as Chinese shares drift lower following some concerning U.S. data points

In U.S. economic news, the ADP survey of private employers showed the addition of just 158,000 new jobs last month well below the estimate of 197,000. The February number was revised up to 237,000 new jobs. The Labor Department delivers the March non-farm payroll report and U.S. unemployment rate Friday before the open of U.S. markets.

The ADP reported sparked concerns that Friday's official March jobs report may miss earlier expectations for a pickup in job creation, which could convince U.S. monetary authorities to keep policy loose.

Australia’s S&P/ASX 200 Index fell 0.4% despite some decent economic data points out of the world’s 12th-largest economy. Official data released earlier today showed Australian retail sales rose 1.3% in February following a revised 1.2% gain in January. That easily topped the 0.3% gain economists expected. The February reading of Australian retail sales shows the largest increase since November 2009.

In another report, the Australian Bureau of Statistics said building approvals jumped 3.1% after a 2% drop in January.

The latest Australian Industry Group-Commonwealth Bank index showed an increase of 1.1 points to 49.6 last month. Readings below 50 indicate contraction, but the rate of declines in the index are slowing amid 14 straight months of readings below 50.

New Zealand’s NZSE 50 is proving to be one of the region’s bright spots with a gain of 0.27%. South Korea’s Kospi plunged 1.87% as intensifying threats from North Korea chased investors out of South Korean asssets.

Singapore’s Straits Times Index is off 0.20%. S&P 500 futures are down 0.05% following the worst one-day performance for U.S. stocks in a month.

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USD/JPY higher as traders eye BoJ meeting

Dollar is trading higher against the Japanese yen Wednesday as traders are keeping close watch on the two-day Bank of Japan monetary policy that kicks off today.

In Asian trading Wednesday, USD/JPY rose 0.21% to 93.62. The pair was likely to find support at 92.43, the low of March 1 and resistance at 94.10, the high of March 6.
Today, BoJ starts its first meeting with Governor Haruhiko Kuroda at the helm. Given Kuroda’s vocal criticism of the previous BoJ regime and his recent pledge to do whatever it take to get Japan’s rate of inflation up to 2%, yen bears risk disappointment if Kuroda is unable to deliver new monetary stimulus measures.

Importantly, traders will want those measures, if announced, to go into effect immediately. Earlier this year, before Kuroda was named the new BoJ governor, the central bank approved additional bond-buying, but disappointed markets by saying that program would not start until next year.

Yen bulls do have some hope, however, as chatter has increased that Kuroda has been able to convince all of the BoJ members to approve additional, imminent monetary easing. With so many yen bears waiting for that to happen, the currency could be vulnerable to short-covering if Kuroda does not deliver.

Elsewhere, EUR/JPY rose 0.04% to 119.80. The pair sought to test support at 118.77, the low from Feb. 25, and resistance at 120.14, the earlier high and is still flirting with four-month lows.

On Tuesday, official data showed the euro zone’s unemployment rate was 12% in February, meaning 19 million people are out of work. The Markit Eurozone Manufacturing Purchasing Managers Index dropped to 46.8 last month, well below the 47.9 posted in February. Readings below 50 indicate contraction.
GBP/JPY is up 0.04% at 141.18 ahead of the Bank of England meeting tomorrow. AUD/JPY advanced 0.26% to 97.89

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The dollar edged higher against

The dollar was higher against the euro and the yen on Tuesday as investors looked ahead to policy meetings by the European Central Bank and the Bank of Japan later in the week.

During U.S. morning trade, the dollar was higher against the euro, with EUR/USD slipping 0.10% to 1.2835.

In the euro zone, a string of weak data fuelled doubts over the strength of the region’s recovery in the first quarter, while concerns over the potential implications of a bailout for Cyprus also weighed.

Official data showed that the euro zone unemployment rate rose to an all-time high of 12% in February compared with an original estimate of 11.9% for January, which was revised up to 12%.

A separate report showed that the euro zone’s manufacturing purchasing managers’ index ticked up to 46.8 in March, from a final reading of 46.6 the previous month, still substantially below the 50 mark that separates growth from contraction.

Germany’s manufacturing PMI dropped back into contraction territory, falling to 49 in March from a final reading of 50.3 in February, as new orders fell.

The ECB was not expected to announce any changes to monetary policy following Thursday’s meeting, but investors were awaiting comments from President Mario Draghi at the bank’s post-policy meeting press conference.

The dollar pulled back from five-week lows against the yen, with USD/JPY rising 0.29% to 93.51, up from session lows of 92.57.

The yen remained under pressure as expectations for more aggressive easing measures by the BoJ under new Governor Haruhiko Kuroda remained intact ahead of the outcome of the bank’s policy meeting on Thursday.

The dollar hit session highs against the pound, with GBP/USD dropping 0.74% to 1.5119.

Sterling fell after data showed that the U.K. manufacturing PMI rose to 48.3 in March from 47.9 in February, but came in below expectations for a reading of 48.5.

The weak data added to fears over the risk of a triple-dip recession and fuelled expectations that the Bank of England could restart its asset purchase program as soon as this week.

The dollar edged higher against the Swiss franc, with USD/CHF advancing 0.24% to 0.9487.

In Switzerland, a report showed that the SVME manufacturing PMI dropped to 48.3 in March, from 50.8 in February, missing expectations for a reading of 50.2.

The greenback was weaker against its Canadian, Australian and New Zealand counterparts, with USD/CAD slipping 0.10% to 1.0155, AUD/USD rising 0.35% to 1.0457 and NZD/USD climbing 0.69% to 0.8427.

Earlier Tuesday the Reserve Bank of Australia left rates on hold at 3.0% in a widely expected decision and said that previous rate cuts were beginning to have an expansionary effect on the economy.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.15% to 83.03.

In the U.S., official data showed that factory orders rose 3.0% in February, slightly above expectations for an increase of 2.9%.

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Crude dips on market talk of rising inventories

Oil prices fell in U.S. trading on Tuesday amid market talk that weekly inventory data due for release on Wednesday will reveal rising stockpiles.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in May traded down 0.21% at USD96.87 a barrel on Tuesday, off from a session high of USD97.22 and up from an earlier session low of USD95.93.

The U.S. Energy Information Administration will release weekly data on crude inventories on Wednesday, and expectations began to build a day earlier that the U.S. is awash in supply, which pushed prices down in afternoon trading on Tuesday.

Still, better-than-expected U.S. factory data supported the commodity.

U.S. factory orders rose 3.0% in February, above expectations for an increase of 2.9% and well above January's 1.0% contraction, according to the Census Bureau.

Many investors remained cautious, however, after the Institute for Supply Management reported on Monday that its purchasing managers index for March fell to 51.3, from 54.2 in February.

Analysts had expected the index to remain unchanged at 54.2.

The figures sent oil falling amid concerns that the U.S. economy continues to battle headwinds amid its recovery and will demand less fuels and energy going forward.

Elsewhere on the ICE Futures Exchange, Brent oil futures for May delivery were down 0.46% at USD110.56 a barrel, up USD13.69 from its U.S. counterpart.

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European stocks higher ahead of E.Z. data; Dax up 0.48%

European stocks opened higher on Tuesday, as markets awaited the release of manufacutirng and unemployment data from the euro zone later in the day, while concerns over political deadlock in Italy persisted.
During European morning trade, the EURO STOXX 50 added 0.25%, France’s CAC 40 advanced 0.39%, while Germany’s DAX 30 gained 0.48%.
Italian President Giorgio Napolitano was due to meet with working committee advisors later Tuesday, in an attempt to break the political deadlock in the country.

The so-called group of ten "wise men" meeting in Rome was to include a Bank of Italy member, the country's statistics chief and politicians from both sides.
Separately, Cypriot government officials were preparing to meet with representatives of the European Union and the International Monetary Fund to seek easier bailout terms.
Financial stocks were mixed. In France, BNP Paribas and Societe Generale advanced 0.12% and 0.39%, while in Germany, Deutsche Bank retreated 0.72%.

Among peripheral lenders, Italian banks Intesa Sanpaolo and Unicredit tumbled 1.05% and 2.40% respectively, while Spain's Banco Santander and BBVA slid 0.19% and 0.89%.

Elsewhere, Syngenta, which produces crop protection products and seeds, plummeted 2.43% after Liberum Capital Ltd. downgraded the shares to hold.

In London, FTSE 100 climbed 0.54%.

Vodafone led gains, surging 3.80%, after accusing the Indian government of "contradictory and inconsistent" actions in an ongoing row over valuable phone spectrum licences.
Adding to gains, ICAP ralled 3.24% after Nasdaq OMX Group said it will buy eSpeed, the electronic trading system for U.S. Treasuries, from BGC Partners for about USD750 million in cash.
Meanwhile, financial stocks were broadly lower, as shares in HSBC Holdings dipped 0.03% and Barclays edged lower 0.16%, while Lloyds Banking slid 0.33% and the Royal Bank of Scotland tumbled 1.92%.

Mining stocks were also mostly on the downside. Rio Tinto slid 0.62%, while rivals Evraz and Eurasian Natural Resources plunged 2.61% and 2.44% respectively.
In the U.S., equity markets pointed to a higher open. The Dow Jones Industrial Average futures pointed to a 0.19% gain, S&P 500 futures signaled a 0.14% rise, while the Nasdaq 100 futures indicated a 0.22% increase.

Also Tuesday, Markit research group said Spain's manufacturing purchasing managers' index fell to 44.2 in March from a reading of 46.8 the previous month, while Italy's manufacturing PMI ticked down to 44.50 last month from 45.80 in February.

Later in the day, the U.S. was to release a government report on factory orders.

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USD/JPY lower ahead of BoJ meeting

The Japanese yen is again trading higher against the U.S. dollar a day before Bank of Japan Governor Governor Haruhiko Kuroda presides over his first monetary policy meeting.

In Asian trading Tuesday, USD/JPY is down 0.23% at 93.03. The pair was likely to find resistance at 94.38, the earlier high, and support at 92.92, the low from March 5.
The yen rose against the greenback Monday after BoJ said that Tankan Manufacturing index rose to a seasonally adjusted -8 in the first quarter from -12 in the fourth quarter. Analysts expected a first-quarter reading of -7.

In another report, the central bank said that Japan’s Tankan large non-manufacturing index rose to a seasonally adjusted 6 in March from 4 in February. Analysts expected a March reading of 8.

The yen’s rise of Kuroda’s first meeting as leader of BoJ may come as a surprise to some because traders have widely expected that Kuroda’s first monetary policy would bring about additional stimulus measures that could be implemented in the near-term.

Kuroda, a vocal critic of BoJ’s previous leadership, has recently said he will do everything in his power to help Japan reach Prime Minister Shinzo Abe’s desired rate of inflation of 2%. The Japanese currency is down more than 4% in the past 90 days, making it one of the worst-performing developed market currencies over that time.
Elsewhere, EUR/JPY is down 0.07% at 119.74 as the yen continues to hover near four-month highs against the euro.
AUD/JPY is higher by 0.04% at 97.23 ahead of the start of the Reserve Bank of Australia meeting later today. NZD/JPY is down 0.03% at 78.03

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Asian stocks mostly higher following China PMI; Nikkei down 1.17%

Most Asian stocks are trading higher to start the week following the release of China’s March PMI data, which rose from February, but fell short of analysts’ estimates.

In Asian trading Monday, Japan’s Nikkei 225 fell 1.17% after Bank of Japan said that Tankan Manufacturing index rose to a seasonally adjusted -8 in the first quarter from -12 in the fourth quarter. Analysts expected a first-quarter reading of -7.

In another report, Bank of Japan said that Japan’s Tankan large non-manufacturing index rose to a seasonally adjusted 6 in March from 4 in February. Analysts expected a March reading of 8.

Hong Kong’s Hang Seng fell 0.74% while the Shanghai Composite slipped 0.17% after after China reported March PMI of 50.9, slightly below analysts’ estimates calling for 51.2. Readings above 50 indicate expansion.
Still, the March reading is up 50.1 in February. China’s PMI reading has never declined from February to March, but the average increase prior to today had been 3.1 points, according to a research note released by Bank of America earlier today.

Australia’s S&P/ASX 200 fell 0.57% while New Zealand’s NZSE 50 added 0.24%. China is the largest trading partner for both Australia and New Zealand.

The dollars of both countries are trading lower as traders eschew riskier currencies in favor of safe-havens such as the U.S. dollar and yen on news the Bank of Cyprus will hammer depositors with accounts of more than EUR100,000 to the tune of 60%.
Under the terms of the new plan, Bank of Cyprus depositors will have 37.5% of their deposits above EUR100,000 turned into voting shares in the bank, which would also entitle the depositors to future dividends. Another 22.5% of the deposits will be withheld to ensure the bank is properly capitalized.

South Korea’s Kospi advanced 0.57% after the Korea National Statistical Office said that South Korean CPI fell to -0.2% in March from 0.3% in February. Analysts had expected South Korean CPI to rise to 0.3% last month.

Singapore’s Straits Times Index rose 0.05% while S&P 500 futures are off 0.12%. The benchmark U.S. index touched a new record high last week.

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