Daily FX Update, 24 April 2015 OVERNIGHT MARKET UPDATE:

·         US initial jobless claims rose marginally to 295k from 294k last week, but remain around levels that are consistent with strength in employment growth and further declines in the unemployment rate.

·         In US, the new home sales declined 11.4% m/m in March taking the annual rate to 481k from 543k in February.

·         The US preliminary Markit manufacturing PMI softened to 54.2 in April, falling short of market expectations (55.7). The Kansas City Fed Manufacturing survey also declined to -7 in April from -4.   

·         The euro area composite PMI data eased to 53.5 from 54.0 in March, with the services and manufacturing components softening across both Germany and France.  

·         UK’s headline retail sales declined 0.5% m/m while core sales were up 0.2% m/m.

·         In the currency market, global manufacturing softness weighed on the USD. The USD weakened through the London session, with the initial weakness extended on the back of generally disappointing US dataflow. Despite weaker-than-expected PMI data, the euro was supported by positive headlines in regards to Greece’s negotiations with its European creditors.          

·         The 10 year Treasury yield fell 2 bps to 1.96% on weaker US and European data, with falls across the curve.                

·         US equities rose despite mixed earnings and mixed global manufacturing data. The Nasdaq Composite touched the highest level in 15 years, whereas the Standard & Poor’s 500 Index climbed 0.2%.        

·         Crude oil markets rallied again, with Brent prices hitting a four month high. Brent prices outperformed WTI crude, with Brent trading at a USD7.30/bbl premium to WTI.             

Gold prices rose slightly leaving gold within ranges of the past month. The global macro-economic environment and the physical market (China and India) unsupportive of prices expected to cause the gold price to resume downtrend in near term.