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UK Industrial Production and Trade data miss expectations; Focus turns to Trump/Xi meeting and US jobs report

Notes/Observations

Geopolitical jitters keeps risk appetite sidelined; US launched missile strike on Syrian airbase deemed responsible for recent chemical attack on civilians

Trump/Xi meet on trade and other issues in Florida

China FX Reserves registers its 1st back-to-back monthly increases since in Apr 2016

UK house price growth stagnates in March as Halifax prices registers its slowest annual pace since May 2013

Focus turns to US non-farm payrolls

Syria and various reactions:

US launched cruise missile attacks against airfield targets in Syria. 59 Tomahawk launched from 2 ships in the Eastern Mediterranean, targeting airfield near Homs from which Syria launched recent chemical attack on civilians

US State Sec Tillerson: US has high degree of confidence sarin gas was used in chemical weapons attack; strike shows US prepared to take decisive action to respond to heinous attacks. Russia was either complicit or incompetent as they failed to carry out 2013 agreement to secure Syrian chemical weapons; Did not seek approval from Moscow

Pentagon: US informed Russian forces ahead of cruise missile strikes on Syrian Shayrat airfield; did not target areas where Russian forces were believed to be present

Syria State TV: US aggression targets Syrian military targets with a number of missiles. Attack caused significant damage to Shayrat airbase with multiple casualties

Overnight:

Asia:

BOJ Quarterly Public Opinion of Household Sentiment saw inflation at 2.0% in both 1-year and 5-year outlook

Japan Feb Overtime Pay regiusters its first rise since May 2016 of +0.6%

Europe:

ECB's Constancio (Portugal): there is wide agreement in Governing Council on ECB policy; differences on council are about nuances, not about direction of the overall policy

Americas:

Senate Republicans pass "nuclear option" rule change that will allow for approval of Gorsuch Supreme Court nomination on a majority vote basis

Economic Data

(NL) Netherlands Feb Manufacturing Production M/M: +2.1% v -2.3% prior; Y/Y: 5.0% v 1.8% prior

(CH) Swiss Mar Unemployment Rate: 3.4% v 3.4%e; Unemployment Rate (Seasonally adj): % v 3.3%e

(DE) Germany Feb Industrial Production M/M: +2.2% v -0.2%e; Y/Y: 2.5% v 0.5%e

(DE) Germany Feb Current Account: €20.4B v €19.1Be; Trade Balance: €19.9B v €17.7Be; Exports M/M: +0.8% v -0.5%e; Imports M/M: -1.6% v +0.2%e

(NO) Norway Feb Industrial Production M/M: -0.5% v 3.4% prior; Y/Y: 1.2% v 1.3% prior

Manufacturing Production M/M: 0.0% v 0.0%e; Y/Y: -1.4% v -0.9% prior

(FR) France Feb Trade Balance: -€6.6B v -€4.9Be

(FR) France Feb Industrial Production M/M: -1.6% v +0.5%e; Y/Y: -0.7% v +1.4%e

(FR) France Feb Manufacturing Production M/M: -0.6% v +0.9%e; Y/Y: -0.5% v +0.9%e

(CH) Swiss Mar Foreign Currency Reserves (CHF): 683.2B v 674.0Be

(UK) Mar Halifax House Prices M/M: 0.0% v 0.2%e; 3M/Y: 3.8% v 4.0%e (slowest annual pace since May 2013)

(CN) China Mar Foreign Reserves: $3.009T v $3.011Te (2nd month of increase)

(UK) Feb Industrial Production M/M: -0.7% v +0.2%e; Y/Y: 2.8% v 3.7%e

(UK) Feb Manufacturing Production M/M: -0.1% v +0.3%e; Y/Y: 3.3% v 3.9%e

(UK) Feb Visible Trade Balance: -£12.5B v -£10.9Be; Total Trade Balance: -£3.7B v -£2.2Be prior; Trade Balance Non-EU: -£3.8B v -£2.5Be

Fixed Income Issuance:

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

Index snapshot (as of 10:00 GMT)

Indices [Stoxx50 -0.5% at 3,474, FTSE -0.1% at 7,294, DAX -0.6% at 12,161, CAC-40 -0.4% at 5,102, IBEX-35 -0.7% at 10,442, FTSE MIB -0.3% at 20,238, SMI -0.5% at 8,598, S&P 500 Futures -0.1%]

Market Focal Points/Key Themes: European equity indices are trading lower amid geopolitical tensions following a US missile strike on a Syrian airfield from which a deadly chemical weapons attack was launched; Banking stocks generally lower across the board; Spanish IBEX index notably underperforming weighed by shares of Gamesa, down double digits in the session; FTSE 100 slightly outperforming as oil stocks trade higher in line with Brent and WTI contracts; The index currently weighed by commodity and mining stocks as copper prices trade lower intraday.

No upcoming scheduled US earnings pre-market.

Equities (as of 09:50 GMT)

Consumer Discretionary: [Bang & Olufsen BO.DK +1.6% (Q3 results), Hornby HRN.UK +4.9% (trading update)]

Industrials: [Obrascon Huarte Lain OHL.ES +0.3% (awarded €462M contract)]

Utilities: [Public Power Corp PU8.DE +1.2% (FY16 results)]

Speakers

Greece and creditors said to have reach a preliminary agreement on bailout talks in which the institutions would return to Athens

Various EU officials and Finance Ministers commented ahead of Eurogroup meeting

Eurogroup Chief Dijsselbloem noted that it had achieve results on Greece but would not have any political agreement at today's meeting

EU's Dombrovskis stated athat Greece and its international lenders had made good progress in talks on reforms necessary. Greek review to be finalized within a few weeks - Germany Fin Min Schaeuble added that he was not sure if an agreement would come out of Eurogroup today on Greece; still differences between creditors

BOE Gov Carney: Both UK and EU needed to agree to recognize each others' bank rules after Brexit, to avoid a damaging hit to financial services across Europe. BoE and banks needed to be ready for a hard Brexit with no deal reached. Set a July 14th deadline for all cross-border financial firms operating in Britain to tell the BoE how they would cope.

Sweden Central Bank (Riksbank) Dep Gov Ohlsson: Without expansionary policy growth and employment would have been lower

Japan PM Abe's adviser Hamada noted that Japan should push back against any US suggestion that it was suppressing the JPY currency (yen)s value for trade advantage

Russia Foreign Ministry: US missile strike on Syria only deepens existing problems; reiterated call for emergency meeting of UN Security Council. US airstrikes were planned well in advance

Thailand Central Bank stated that it saw downside risks to both growth and inflation outlook. Policy should remain accommodative

China Banking Regulatory Commission (CBRC) said to issue guidelines on preventing financial risks

China FX regulator SAFE: Current account surplus to remain within a reasonable range. FX reserves to stabilize further. Domestic economy to continue stable and relatively fast growth

RussiaForeign Min Lavrov: No Russians killed in Syria from US missile attack

Russia Energy Min Novak stated that it was too early to talk about extending OPEC/Non-Opec production cuts; need to keep working on oil inventory level

Currencies

Geopolitical jitters kept risk appetite sidelined and boosted safe haven assets after US launched missile strike on Syrian airbase deemed responsible for recent chemical attack on civilians.

USD/JPY tested the lower end of the 110 level on the initial reports of the US missile attack but stabilized back in the mid-110 area afterwards.

The CHF currency (Swiss Franc) was little changed from its opening level in Asia

The GBP/USD softened after Feb Industrial Production and Trade data came in worse then expectations. The pair was off approx. 0.3% to test 1.2430

Fixed Income

Bund futures trade at 162.58 up 18 ticks higher on risk aversion flows following the US strikes on Syrian targets. Futures have come off earlier highs to close the opening gap with continued momentum lower targeting 162.02 followed by 161.52 then 161.02. A move back higher targets 162.84 day high followed by 162.98 then Feb contract high at 163.12. .

Gilt futures trade at 128.11 up 12 ticks trading higher with general risk aversion trend as well as weaker Industrial and Manufacturing data out of the UK. Support remains at 127.75 then 127.34 followed by 127.05. A move above 128.33 high sees resistance stand at 128.50 then 128.96 followed by 129.24. Short Sterling futures trade flat to up 1bp with Jun17Jun18 remaining steady at 14/14.5bp

Friday's liquidity report showed Thursday's excess liquidity rose sharply to €1.591T a rise of €126B from €1.465T prior. Use of the marginal lending facility fell to €90M from €256M prior.

Corporate issuance saw $2.88B come to market via 5 issuers headlined by Autozone $600M 10 year offering and NY life global funding $800M 2 part offering bringing the weeks issuance to above $21B, below the $25B consensus. For the week ending April 5th Lipper US Fund flows reported IG funds net inflows of $2.71B bringing YTD net inflows to $41.8B, High Yield funds net reported inflows of $2.38B bringing YTD outflows to $3.56B.

Looking Ahead

(EU) EU/Euro-Area Finance Ministers begins 2-day meeting in Valletta, Malta

(HK) Hong Kong Mar Foreign Reserves: No est v $390.5B prior

(UR) Ukraine Mar CPI M/M: No est v 1.0% prior; Y/Y: No est v 14.2% prior

06:00 (UK) DMO to sell combined £B in 1-month, 3-month and 6-month bills (£0.5B, £0.5B and £1.0B respectively)

06:30 (IS) Iceland to sell Bonds - 06:45 (US) Daily Libor Fixing

07:00 (CL) Chile Mar CPI M/M: 0.5%e v 0.2% prior; Y/Y: 2.7%e v 2.7% prior

07:30 (CL) Chile Mar Trade Balance: $0.2Be v $0.2B prior; Total Exports: 5.2Be v $4.7B prior; Total Imports: $5.1Be v 4.5B prior

07:30 (CL) Chile Mar International Reserves: No est v $39.7B prior

07:30 (IN) India Weekly Forex Reserves

08:00 (UK) Mar NIESR GDP Estimate: 0.6%e v 0.6% prior

08:00 (BR) Brazil Mar IBGE Inflation IPCA M/M: 0.3%e v 0.3% prior; Y/Y: 4.6%e v 4.8% prior

08:00 (PL) Poland Mar Official Reserves: No est v $110.8B prior

08:15 (UK) Baltic Dry Bulk Index

08:30 (US) Mar Change in Nonfarm Payrolls: +180Ke v +235K prior, Change in Private Payrolls: +170Ke v +227K prior, Change in Manufacturing Payrolls: +16Ke v +9K prior

08:30 (US) Mar Unemployment Rate: 4.7%e v 4.7% prior, Underemployment Rate: No est v 9.2% prior, Change in Household Employment (civilian labor force): No est v +160.1K prior, Civilian Labor Force Participation Rate: No est v 63.0 prior

08:30 (US) Feb Average Hourly Earnings M/M: 0.2%e v 0.2% prior; Y/Y: 2.7%e v 2.8% prior; Average Weekly Hours: 34.4e v 34.4 prior

08:30 (CA) Canada Mar Net Change in Employment: +5.7Ke v +15.3K prior; Unemployment Rate: 6.7%e v 6.6% prior

09:00 (RU) Russia Mar Official Reserve Assets: No est v $397.3B prior

09:00 (MX) Mexico Mar CPI M/M: 0.6%e v 0.6% prior; Y/Y: 5.3%e v 4.9% prior; Core CPI M/M: 0.5%e v 0.8% prior

10:00 (US) Feb Wholesale Inventories (Final) M/M: 0.4% v +0.4% prelim; Wholesale Trade Sales M/M: No est -0.1% prior

10:00 (CA) Canada Mar Ivey Purchasing Managers Index (Seasonally Adj): 56.0e v 55.0 prior; PMI unadj: No est v 55.1 prior

10:00 (CA) Bank of Canada (BOC) Gov Poloz

11:00 (EU) Potential sovereign ratings after European close (France and Sweden Sovereign Debt to be rated by S&P; Sweden Sovereign Debt to be rated by Moody's; Czech Sovereign Debt to be rated by Fitch and Spain Sovereign Debt to be rated by Canadian rating agency DBRS

12:15 (US) Fed's Dudley (dove, FOMC voter) in NY

13:00 (US) Weekly Baker Hughes Rig Count data

14:00 (CO) Colombia Central Bank Mar Minutes

15:00 (US) Feb Consumer Credit: $15.0Be v $8.8B prior

Spot Gold surged on fresh safe-haven buying and hit new five-month high at $1269 on Friday.

Fresh rally emerged from near-term congestion between $1239 and $1260 and eventually broke above key barriers at $1258/63 (200SMA/former top of 27 Feb).

With daily studies now in full bullish setup and renewed bullish sentiment, gold price is set for further rise.

Today's close above $1258/63 pivots will generate strong bullish signal for extension towards next target at $1278 (Fibo 61.8% of larger $1376/$1122 July/Dec 2016 descend).

The yellow metal is also on track the fourth straight bullish weekly close that supports scenario.

Former strong barriers at $1263/58 now act as good supports that are expected to ideally contain corrective dips.

Session low at $1250 (reinforced by rising daily Tenkan-sen line) marks lower pivot, loss of which would weaken near-term structure.

Res: 1269, 1274, 1278, 1281
Sup: 1263, 1261, 1258, 1250

This week provided more signs that we are likely at the peak in the global business cycle and hence that the acceleration phase is over. ISM manufacturing fell for the first time since August and US Markit PMI, ISM non-manufacturing, US car sales and US personal spending all fell short of expectations. In China, PMI manufacturing from Caixin also declined slightly and other data suggests that the Chinese cycle is heading lower from here - see China leading indicators - more signs of a peak in Q1, 4 April 2017.

Moving from acceleration to deceleration in the global business cycle has important implications for financial markets as we wrote about in Research: Global reflation set to lose steam, 3 April 2017.

First, the equity bull market has historically paused during this phase and we see higher volatility. Focus on risk factors moves back to the fore and on that front the meeting between US president Donald Trump and Chinese president Xi Jinping will remind us of the risk of a trade war and/or escalation on the issue of North Korea (see more below). We are still bullish on stocks in the long term but for now we expect a shift to sideways trading for some time.

Second, a peak in the business cycle will give more support to government bonds. A peak in headline inflation and falling inflation expectations in the eurozone should give a stronger voice to the doves within the ECB and we believe the bond bear market is over for now.

Third, less steam in the reflation theme will tend to work in favour of the USD and support our view of a stronger USD in the short term. The Fed has a stronger focus on employment relative to inflation compared to the ECB and the US labour market is expected to stay robust even if the cycle starts to decelerate a bit. On the other hand the ECB will continue to be challenged by a core inflation rate below 1% and keep a dovish stance as the cycle peaks and inflation heads lower. We look for a move to 1.06 in EUR/USD +3M. In the longer term, we still expect valuation and current account balances to be supportive for EUR/USD and we retain a forecast of EUR/USD moving towards 1.14 on a 12M horizon. For an update of EUR/USD drivers 4 April 2017.

Difficult Trump-Xi meeting could be reminder of risk factors

The US missile strike on Syria is a reminder that geopolitical risks are present. Russia's president Putin ‘regards the strikes as aggression against a sovereign nation...in violation of international law, and also under an invented pretext.' It is too early to judge any implications of this but it clearly adds to the list of geopolitical tensions that includes North Korea and the South China Sea. Regarding the latter, the Philippines president yesterday ordered military occupation of islands that China claim. It could trigger a military response from China if the Philippines follow through on this.

The meeting this week with Trump and Xi has got off to a good start – but nevertheless will be a reminder that the disagreements between the US and China are real and that the potential implications are not negligible. Trade is a key area of disagreement, but we should not expect any action in this area from the US until H2.

A quick way to get an overview of the main tensions is to look at Trump's Twitter profile for the past couple of weeks. On 30 March Trump tweeted ‘The meeting next week with China will be a very difficult one in that we can no longer have massive trade deficits...and job losses. American companies must be prepared to look for alternatives'. On 17 March Trump tweeted ‘North Korea is behaving very badly. They have been "playing" the United States for years. China has done little to help'.

On 31 March Trump ordered a comprehensive country-by-country study over the next 90 days to investigate ‘trade abuses' by other countries that contribute to US trade deficits. ‘The theft of American prosperity will end. Thousands of factories have been stolen from our country, but these voiceless Americans now have a voice in the White House'. Secretary of Commerce Wilbur Ross will deliver a report, working closely with National Trade Council Director Peter Navarro and US Trade Representative Robert Lighthizer. All three of them are hardliners on China. In an interview with Bloomberg, Navarro said that Ross will deliver a report to the president and ‘in 90 days we start moving'.

Given what Ross and Navarro have written earlier, there can be no doubt that the report will single out China as the main contributor to the trade deficit by using abusive trade practices. Navarro's documentary ‘Death by China' is one long bashing of Chinese trade practices. And Ross and Navarro co-authored a white paper in September as part of the Trump presidential campaign that spent several pages explaining how China is an important reason why US growth has struggled for the past 20 years.

How strongly Trump will address the trade issue at the meeting with Xi is uncertain. But he will likely warn China that unless there is a change in trade practices, the US will take measures to ‘level the playing field'. However, it is hard to see China giving Trump enough for him to be satisfied. And this raises the risk of a trade war breaking out later this year.

When it comes to North Korea the US is increasingly concerned that the regime is getting closer to developing an Intercontinental Ballistic Missile (ICBM) that to be used with a nuclear warhead. Trump had previously said that it was not going to happen but as North Korea continues to carry out tests and get closer to development of an ICBM the situation becomes increasingly urgent to address. As the tweet above suggests, the US is very critical of China that they have not done enough to stop North Korean president Kim Jung-Un from continuing with the tests.

The Aussie remains in red on Friday and extends weakness towards support at 0.7513 (100SMA), following yesterday’s close below 200SMA pivot at 0.7549.

We need to see weekly close below 200SMA to confirm break and avoid scenario from one ago when the pair made false break lower.

Firm bearish setup of daily studies supports further weakness towards key short-term support at 0.7489 (09 Mar low) violation of which could spark stronger bearish acceleration on triggering stops that are parked below.

Meantime, slow stochastic is entering oversold territory and may delay attack at 0.7489 pivot.

Broken 200SMA is expected to ideally cap and guard next upper pivot at 0.7596 (daily Tenkan-sen).

Only stronger bullish acceleration above 0.7618 (daily Kijun-sen) would sideline immediate downside risk and expose upper breakpoint at 0.7658 (daily cloud top).

Res: 0.7549, 0.7596, 0.7618, 0.7658
Sup: 0.7514, 0.7489, 0.7472, 0.7436

'The lower jobless claims filings show the economy continues to show improvement which is important news with the long expansion expected to eventually tire somewhere down the line given its longevity.' - Mark Zandi, Moody's Analytics

The number of Americans filing for unemployment benefits decreased more than expected last week, hitting the lowest level over the past five weeks, official figures revealed on Thursday. The US Department of Labour reported initial jobless claims fell 25,000 to a total of 234,000 in the week ended April 1, down from the preceding week's upwardly revised reading of 259,000. This was the biggest weekly decline since April 2015. Meanwhile, market analysts expected unemployment claims to plunge only 251,000 during the reported week. The number of job-seeking persons decreased from 2,052,000 to 2,028,000, thus, affecting the moving average, which hit its lowest level since June 2000. At the same time, the seasonally adjusted insured unemployment rate of 1.5% remained unchanged from last week. In general, the fact that jobless claims have been fluctuating around 260,000 for more than two years, indicating that the US has a healthy labour market. In addition, the largest spike in unemployment claims was recorded in New York, Texas, Massachusetts, Pennsylvania and California, while the largest drop in unemployment happened in Ohio, Kansas, Missouri, Illinois and Kentucky.

Gold Breaking resistance at $1263.

Gold is getting stronger. The momentum seems back to bullish despite some consolidation. Resistance is located at 1263 (27/02/2017 high). Hourly support can be found at 1224.10 (16/03/2017 low).

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

Silver Toward strong resistance at 18.49.

Silver has increased above 18.00 which is now a support. Strong resistance is given at a distance at 18.49 (27/02/2017 high). Key support is given at 16.82 (15/03/2017 low).

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

Crude oil Continued bullish move.

Crude oil keeps on increasing. The commodity had been located in a bearish trend since the commodity had been unable to mount a serious challenge to resistance at 55.24 (03/01/2017 high) but now the pair is heading higher. Resistance is given at 51.88 (05/041/2017 high). Hourly support is given at 47.09 (22/03/2017 low).

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

EUR/CHF Consolidating around 1.0700.

EUR/CHF's is trading around 1.0700. The medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low). Expected to see further decline.

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

EUR/CHF Consolidating around 1.0700.

EUR/CHF's is trading around 1.0700. The medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low). Expected to see further decline.

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

EUR/GBP Consolidating after sharp decline

EUR/GBP is getting lower. Hourly resistance is given at 0.8591 (05/04/2017 high). Strong resistance is given at 0.8787 (13/03/2017 high). Hourly support can be found at 0.8484 (31/03/2017 low). Expected to show continued weakness.

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

USD/CHF Pushing higher.

USD/CHF is strengthening, even though slightly. Hourly support is given at 0.9814 (27/03/2017 low). Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to show another leg higher.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/CAD Trading around 1.3400.

USD/CAD has broken resistance area around 1.3400 which invalidates the short term bearish technical structure. Hourly support is given at 1.3265 (21/03/2016 low) is at stake. Key support is given at 1.2969 (31/01/2017 low).

In the longer term, there is a golden cross with the 50 dma crossing the 200 dma indicating further upside pressures. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low).

AUD/USD Towards strong support area.

AUD/USD is getting lower towards strong support area around 0.7500.. The pair has failed to test the key resistance at 0.7778 (08/11/2016 high).

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.

EUR/USD Edging lower.

EUR/USD is going lower. The pair is heading lower since the pair failed to hold above former resistance given at 1.0874 (08/12/2017 high). Hourly support can be found at 1.0630 (intraday low). Stronger support can be found at 1.0494 (22/02/2017 low). Expected to see further shortterm weakness.

In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.

GBP/USD Sideways price action.

GBP/USD's bullish pressures have faded abruptly. Hourly resistance is located at 1.2615 (27/03/2017 high) while hourly support can be found at 1.2324 (03/17/2017 low). Expected to show continued strengthening towards stronger resistance at 1.2775 (06/12/2016 high) if support area around 1.24 stands.

The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY Testing support at 110.

USD/JPY's momentum is slowing down. Hourly resistance is given at 112.20 (31/03/2017 high). Stronger resistance can be located at 113.57 (16/03/2017 high) while support is given at 110.11 (27/03/2017 low).

We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

'The increase in orders was important - otherwise concerns about production would definitely have been warranted.' - lexander Krueger, Bankhaus Lampe

German industrial orders rose in February after plunging in the preceding month amid stronger domestic demand. The Economy Ministry reported on Thursday that booking advanced 3.4% during the reported month, following January's drop of 6.8% but falling behind analysts' expectations for a 3.5% increase. The data followed a private survey that showed that manufacturing activity growth hit its highest level in almost six months in March. Both data releases suggested that the manufacturing sector contributed significantly to GDP growth in the Q1 of 2017. Nevertheless, orders from the Euro zone dropped 8.1%, failing to contribute to growth. Sophia Krietenbrink from the DIHK suggested that global political risks continued to put significant pressure on international demand for German-manufactured goods. The Economy Minister added that in the two-month comparison for January/February compared to November/December, orders dropped 2.4% amid both weak domestic and international demand. However, it expressed hopes that industrial activity would improve in the upcoming months. On Friday morning, Destatis reported that German industrial production climbed 2.2% in February, unchanged from a downwardly revised reading in January. Meanwhile, analysts anticipated a drop of 0.1%.