Daily FX Update, 15 April 2015 OVERNIGHT MARKET UPDATE: ·

OVERNIGHT MARKET UPDATE:

·         In US, the NFIB small business survey softened in March to 95.2 from 98.0 in February and 100.2 in December - its recent cyclical high. The details of the survey were also disappointing with hiring plans easing to 10 from 12 in February and 15 in December. The share of firms planning to increase compensation also eased moderately. Meanwhile, the headline PPI data for March rose 0.2% m/m.

·         Euro area’s industrial production data was much stronger than expected, rising 1.1% m/m to take the annual pace of growth to 1.6% (mkt: 0.8%). The strength was broad based with energy, capital goods and durable production all recording solid increases.

·         The ECB’s Bank Lending Survey (BLS) banks reported that net demand for loans by businesses remained positive in Q1 2015, but moderated to +6% from +18%. Nonetheless, in trend terms demand for loans by businesses has strengthened and is consistent with a further pick up in capital expenditure going forward.

·         UK headline CPI data remained flat over the year to March. However, core CPI weakened to 1.0% y/y from 1.2% y/y in February, implying that the underlying pulse of inflation has weakened. 

·         In the currency market, USD was sold off with the US data missed the market’s expectations. However, the sell-off failed to breach any important levels and USD demand emerged.   

·         US Treasuries rallied sharply and the curve flattened following the disappointing US dataflow, with 10-year yields declining 3 bps to 1.90%.       

·         US equities indices were up with both S&P500 and DJIA up 0.2% and 0.3%, respectively.    

·         Crude oil markets rallied with Brent and WTI oil prices increasing 0.9% and 2.7% respectively. API data showed that US crude oil inventories rose less than expected and US gasoline stocks fell by more than pre-polling estimates.       

Gold prices hit a two week low intra-session overnight, before prices rebounded on disappointing US data. Gold prices closed at USD1,194/oz after hitting a low of USD1,184/oz.