Market Roundup
• U.S. optimistic about quick NAFTA deal, Canada more downbeat.
• Fed's Bostic: time for interest rates to rise to neutral rate.
• U.S. Q4 GDP Final, 2.9%, 2.7% forecast, 2.5% previous.
• U.S. Q4 GDP Sales Final, 3.4%, 3.3% forecast, 3.3% previous.
• U.S. Q4 GDP Consumer Spending Final, 4.0%, 3.8% previous.
• U.S. Q4 Deflator Final, 2.3%, 2.3% forecast, 2.3% previous.
• U.S. Q4 Core PCE Prices Final, 1.9%, 1.9% forecast, 1.9% previous.
• U.S. Feb Adv Goods Trade Balance, -75.35 bln, -75.26 bln previous.
• U.S. Feb Wholesale Inventories Adv, 1.1%, 0.8% previous.
• U.S. Feb Retail Inventories Adv, 0.2%, 0.1% previous.
• U.S. Feb Pending Home Sales Index, 107.5, 104.6 previous, 104.3 revised.
• U.S. Feb Pending Sales Change MM, 3.1%, 2.1% forecast, -4.7% previous.
• U.S. w/e MBA Mortgage Applications, 4.8%, -1.1% previous.
• U.S. w/e Mortage Market Index, 401.3, 383.0 previous.
• U.S. w/e MBA Purchase Index, 257.6, 249.9 previous.
• U.S. w/e Mortgage Refinance Index, 1,188.5, 1,107.7 previous.
• U.S. w/e MBA 30-Yr Mortgage Rate, 4.69%, 4.68% previous.
• U.S. Q4 Corporate Profits Prelim, 1.7%, 5.7% previous.
• Swiss central banker Maechler warns against premature rate hike.
• Consumer cheer, baby boom underpin German economic growth .
• New Italy forecasts to leave 2018 GDP growth at 1.5 pct - govt sources.
• OPEC seeks "very long-term" cooperation with other oil exporters.
Looking Ahead - Economic Data (GMT)
• 28 Mar 21:45 New Zealand Feb Building Consents, 0.2% previous
• 28 Mar 23:50 Japan w/e Foreign Bond Investment, 853.8 bln previous
• 28 Mar 23:50 Japan w/e Foreign Invest JP Stock, -1,153.2 bln previous
• 28 Mar 23:50 Japan Feb Retail Sales YY, 1.7% forecast, 1.6% previous
• 29 Mar 00:30 Australia Feb Private Sector Credit, 0.3% previous
• 29 Mar 00:30 Australia Housing Credit, 0.5% previous
Looking Ahead - Events, Other Releases (GMT)
• Mar 28 21:30 Deutsche Bundesbank’s Joachim Wuermeling speaks at Forum Money Marketeers - New York
• Mar 28 N/A Ontario Finance Minister Charles Sousa delivers 2018 budget
• Mar 29 17:00 Fed's Philadelphia President Patrick Harker speaks on the economic outlook - New York
Currency Summaries
EUR/USD is likely to find support at 1.2255 levels and currently trading at 1.2306 levels. The pair has made session high at 1.2385 and hit lows at 1.2300 levels. The euro slipped against the U.S. dollar on Wednesday as concerns about a trade war between the United States and China eased, while data showing U.S. economic growth slowed less than previously estimated supported the dollar. The dollar recovered from the five-week low as concerns of a global trade war were eased by optimistic news that the U.S. and China were set to begin trade negotiations, after earlier exchanging threats. However, the White House said Trump had discussed trade practices with China in calls on Tuesday with French President Emmanuel Macron and German Chancellor Angela Merkel, which could lead to an escalation of trade tensions. Global markets were shaken this month when U.S. President Donald Trump moved to impose tariffs on Chinese goods and Beijing threatened similar measures. But fears of a full-blown trade war have eased on hopes negotiations can bring a compromise. The euro slipped 0.76 percent against the dollar, but was on track for a fifth straight quarterly gain, the longest such streak since 2008. The dollar index , which measures the greenback against a basket of six other major currencies, was up 0.79 percent at 90.08. The index has rallied more than 1 percent since hitting a five-week low of 88.942 on Tuesday.
GBP/USD is supported in the range of 1.4000 levels and currently trading at 1.4076 levels. It reached session high at 1.4143 and dropped to session low at 1.4068 levels. Sterling declined against dollar on Wednesday as sterling was weighed down by downbeat domestic economic data and stronger greenback across the board. Sterling had risen earlier in the day against the dollar and euro on a report that Britain will propose a new solution for the Irish border dispute holding up Brexit talks. But disappointing UK retail sales, according to a survey by the Confederation of British Industry, and a broad rally in the dollar appeared to sap some of the recent optimism about the British currency. The pound suffered its worst daily loss in three weeks versus the dollar on Tuesday after expectations of selling pressure from a large corporate healthcare deal prompted investors to take profits. The British currency rallied last week after Britain secured a Brexit transition deal with the European Union and the BoE confirmed its hawkish tilt. Britain and the EU agreed a Brexit transition deal last week that will buy both sides 21 more months to decide on their future arrangements after the UK leaves the trading bloc, but what to do about the Irish border remains unresolved. Both Britain and the European Union say they do not want to go back to border checks between the Republic of Ireland and Northern Ireland.
USD/CAD is supported at 1.2857 levels and is trading at 1.2924 levels. It has made session high at 1.2933 and lows at 1.2863 levels. The Canadian dollar was pressured by lower oil prices and the U.S. currency was boosted by stronger economic growth data. U.S. gross domestic product expanded at a 2.9 percent annual rate in the final three months of 2017, instead of the previously reported 2.5 percent, the Commerce Department said in its third GDP estimate for the period on Wednesday. The figures helped lift the greenback 0.8 percent against a basket of currencies to the detriment of the loonie. Investors will get a look at monthly Canadian GDP on Thursday, with economic growth expected to have picked up by just 0.1 percent in January. Canada is coming off an exceptionally strong 2017, and analysts are looking to see how much growth can be sustained following three interest rate increases and tighter mortgage regulations that are expected to dampen the housing market. Canada is coming off an exceptionally strong 2017, and analysts are looking to see how much growth can be sustained following three interest rate increases and tighter mortgage regulations that are expected to dampen the housing market . The Canadian dollar was last trading down 0.3 percent at C$1.2925 to the greenback, or 77.37 U.S. cents.
USD/JPY is supported around 105.95 levels and currently trading at 106.83 levels. It peaked to hit session high at 106.95 and made session lows at 106.01 levels. The U.S. dollar rose against the Japanese yen on Wednesday as data showed U.S. economic growth slowed less than previously estimated and easing fears of a trade war boosted greenback across the board. U.S. economic growth slowed less than previously estimated in the fourth quarter as the biggest gain in consumer spending in three years partially offset the drag from a jump in imports. Gross domestic product expanded at a 2.9 percent annual rate in the final three months of 2017, instead of the previously reported 2.5 percent, the Commerce Department said in its third estimate for the quarter on Wednesday. That was a slight moderation from the third quarter's brisk 3.2 percent pace. The upward revision to the fourth-quarter growth estimate also reflected less inventory reduction than previously reported. Economists polled had expected that fourth-quarter GDP growth would be revised up to a 2.7 percent rate. The dollar rose 1.41 percent against the Japanese yen and 1.07 percent against the Swiss franc, viewed as safe-haven currencies in times of market turbulence.
Equities Recap
Defensive stocks won the day in European markets on Wednesday, driving regional benchmarks higher despite heavy losses in the technology sector amid concern over a regulatory crackdown.
The UK's benchmark FTSE 100 closed up by 0.4 percent, FTSEurofirst 300 ended the day up by 0.29 percent, Germany's Dax ended down 0.5, and France’s CAC finished the day flat.
Wall Street closed lower after a rocky session on Wednesday as gains in consumer staples and healthcare were offset by a sharp drop in Amazon shares and a continuing slide in technology stocks.
Dow Jones closed down by 0.04 percent, S&P 500 ended down 0.31 percent, Nasdaq finished the day down by 0.87 percent.
Treasuries Recap
The margin between short- and long-dated U.S. Treasury yields shrank on Wednesday as quarter-end buying for portfolio rebalancing and safe-haven demand due to growing stock market losses pushed the benchmark 10-year yield to seven-week lows.
The yield on 10-year Treasury notes was down 1.5 basis points at 2.773 percent. It hit a seven-week low of 2.743 percent earlier.Two-year Treasury yields were up 0.4 basis point at 2.282 percent.
Commodities Recap
Oil prices fell about 1 percent on Wednesday after data showed U.S. crude inventories unexpectedly rose 1.6 million barrels last week, weighing on market sentiment.
Brent June crude futures settled 70 cents lower at $68.76 per barrel, while the front month May contract, which expires on Thursday, fell 58 cents, or 0.8 percent, to settle at $69.53 a barrel.
West Texas Intermediate (WTI) crude futures for May delivery fell 87 cents to $64.38 a barrel, a 1.3-percent loss.
Gold fell more than one percent on Wednesday as a dollar bounce on U.S. growth data pulled prices further from the previous day's near six-week peak, although softer equities markets kept bullion underpinned.
Spot gold lost 1.4 percent at $1,325.66 per ounce by 1:34 p.m. EST (17:34 GMT), while U.S. April gold futures settled down $17.80, or 1.3 percent, at $1,324.20 an ounce.
